Investors confident in SE Asia: Lee
Investors confident in SE Asia: Lee
SINGAPORE (AP): Foreign investors are becoming overconfident
in Southeast Asia as the region's two-year economic crisis shows
tentative signs of abating, Singapore's Deputy Prime Minister Lee
Hsien Loong said in an interview published Monday.
"Investors are getting confident and returning to the region
again," Lee said in an interview with The Straits Times
newspaper.
"In fact, they are getting overconfident and piling back in,
just like they did before the crisis," said Lee, who is also
chairman of the Monetary Authority of Singapore, the country's de
facto central bank.
He was discussing overall regional stability as a factor in
Singapore's unexpectedly strong economic turnaround.
Lee said he was surprised at how quickly Singapore's domestic
economy has improved, but warned that tough cost-cutting
measures, designed to make the city-state more economically
competitive, must not be abandoned.
"If you decide that now you don't have to take that medicine,
that you've gotten over your cold and can stop your antibiotics,
then you may suffer a relapse," he was quoted saying.
Last September, the government-linked National Wages Council
recommended wages be cut by 5 percent to 8 percent in Singapore
to combat the regional economic crisis.
Coupled with a cut in corporate contributions to the state-run
pension system, total compensation to workers has fallen by 12
percent so far in 1999.
Earlier this year the government raised its economic forecast
for 1999, saying it expects the economy to grow by up to 2
percent at best and to show no growth at worst. That was up from
its earlier forecast of between a contraction of 1 percent and
growth of 1 percent.
Lee said the improved outlook came on the heels of a better-
then-expected economic situation abroad.
"America is continuing to do well. The region is showing signs
of stabilizing quite broadly, except for Indonesia," he said.
The deputy prime minister, who participates in many roadshows
trying to sell Singapore to foreign investors, acknowledged the
dilemma between the messages at home and abroad.
"You want to tell the foreigners, 'Come to Singapore; things
are not that bad.' At the same time, you want to tell
Singaporeans: 'Things are picking up, but continue to tighten
your belts, don't assume that the problems are over,"' he said.
"In a way, you reconcile the two because you tell investors,
'Look, Singaporeans are continuing to tighten our belts. That is
why we are making things not so bad for ourselves,"' he added.
"If we work together we can get 4 to 6 (percent growth)" in
the future, Lee said. "If we quarrel, we might get 2 to zero, so
which do you prefer?"