Singapore Inc. We have become rich in one generationa miracle perhapsbut too quickly and hence not deep-rooted enough. Will we decline in the next generation? Prime Minister Goh Chok Tong 1 Introduction On January 1, 2003, Singapore's prime minister, Goh Chok Tong, sat down to breakfast to review his notes for the New Year's speech he would give later that afternoon. After 40 years of remarkable growth, Singapore had gone from a per capita income of US$427 in 1960 to one of US$20,748 in 2002. But thanks to the global economic downturn of the previous two years, Singapore had experienced one of the worst recessions and levels of unemployment in its history. In contrast to its 10.3% growth in 2000, Singapore's economy shrank by 2.2% in 2001.2 After contracting by more than 10% on an annualized basis in the third quarter, Singapore's growth expectations of 2% to 2.5% for 2002 did not look much brighter.3 Goh and his party, the People's Action Party (PAP), confronted the task of returning the economy to a sustainable level of growth. The Economic Review Committee (ERC) had convened in December 2001 to evaluate government policies to make the country more competitive. Chaired by the