Why a forward-looking Budget is needed

AT AN international conference in Budapest organised by the Central Bank of Hungary last week, central bankers were debating intensely on the effective role of central banks. Singapore was repeatedly identified as an exemplary model where the central bank and the government have consistently done well in crisis management.

The discussion of the Singapore model was dominated by how Singapore effectively managed crises, leading to a swift rebound from every economic recession or slowdown. However, I thought the debate largely missed the point - the severity of the crisis in the first place was mitigated due largely to strong and stable macroeconomic fundamentals and efficient resource allocation for firms and individuals within the micro-economic environment.

Singapore's fundamental strategy in effective crisis management time and again is in fact rooted and rendered easier on the premise of preventive and pre-emptive moves rather than cures. The recent prudent regulations on property purchases, sales and bank-related borrowings, coupled with pre-emptive market cooling measures, are just a case in point.