SINGAPORE: Singapore Prime Minister Lee Hsien Loong believes that the world and the region are in a stronger position compared to that preceding the Asian financial crisis in 1997.
He was speaking to politicians, analysts and thinkers at the three-day Singapore Summit which opened on Friday evening.
Mr Lee said the broad fundamentals are stronger than in 1997. Banks are better capitalised, external balances are generally stronger and countries have significantly higher reserves.
Also, exchange rates are more flexible and firewalls are in place like the US$240 billion Chiang Mai Initiative Multilateralization and central bank bilateral currency swaps.
However, Mr Lee explained that there are deeper issues facing many Asian economies and how these are addressed would determine how well the countries fared in the long term.
The first is demographics. While Asia is home to some of the most rapidly ageing societies, others such as India, Indonesia and Vietnam also have youthful societies.
He warned that unemployed youth could pose social and political problems if the issue is not addressed.
The second challenge is generational changes.
Mr Lee explained that changes in values, experiences, attitudes and aspirations from one generation to the next are happening faster than ever.
Technology is widening gaps between the "digital natives" and the "digital immigrants" and this is especially so in Asia, which has some of the most IT-literate populations and wired countries in the world.
Mr Lee said while this is a positive force, it is still necessary to strike the right balance between the old and the new.
The third challenge is economic and social transformation and Mr Lee said Asian economies have every potential to continue growing faster than advanced countries, and to catch up with them or at least narrow the gap.
Growth depends on active and effective governments to create the preconditions for markets to function properly.
The fourth challenge is peace and security which have been the basis for Asia's progress since the war.
Mr Lee believes that, in the longer term, the single biggest determinant of regional security will be China's peaceful development and integration into the regional order.
Mr Lee stressed that these four issues will shape prospects of Asian economies, and that there is no guarantee that all countries will manage them successfully.
However, he remains confident in the future of Asia.
Turning to Singapore, Mr Lee said the republic also faces the same four issues that the region must tackle. In the area of demographics, the key challenge is anticipating and preparing for a rapidly ageing population, and doing the utmost to encourage Singaporeans to have more babies.
In tackling generational changes, Singapore is educating and engaging the youth to build a better Singapore.
To deal with economic transformation, Singapore is pushing for economic upgrading and inclusive growth, and strengthening safety nets.
And to achieve peace and stability, Singapore will work with ASEAN and external partners to promote shared peace and prosperity.
Mr Lee said Singapore is preparing itself for a bright future in this new world.
- CNA/fa
