"It's an election year. Of course they are going to have this just to get votes," Chee Soon Juan, secretary-general of the opposition Singapore Democratic Party, told AFP.

"How is it going to help the lower income group? It's not going to be enough just to say we have these shares for you," Chee said.

Prime Minister Goh Chok Tong, speaking on television Sunday night as part of an extended celebration of the republic's 36th independence day on August 9, called for the issuance of "New Singapore" shares to all citizens.

Goh, who will lead the ruling People's Action Party (PAP) in general elections which must be held in the next 12 months, said the shares will yield yearly dividends and can be exchanged for cash.

"When we have healthy budget surpluses, we will give out such shares to Singaporeans," he said. "The lower income group will be given more. These shares will give you an annual dividend for a fixed period."

An extra bonus dividend will be given when the economy is doing well, he said without giving further details.

Regional economist Song Seng Wun from the GK Goh brokerage house said Goh's speech was clearly focused on the next general elections which must be held by August 2002.

"You got an election coming. Certainly we must remember the economic environment now is extremely weak," he said.

"With an election looming, it's a sound political move to win brownie points," he said.

Some economists are now warning of a full year contraction in economic activity after growing 9.9 percent in 2000.

In his speech to the nation, Goh said the government cannot forcibly close the income gap between rich and poor Singaporeans by setting wages.

"This is a global phenomenon. If we go against market forces, pull down wages at the top and push up wages at the bottom, our talented people will leave us and our cost of labour will be too high," he said.

"Our economy will become uncompetitive and eventually collapse," he said.

Instead, Goh said the government will seek to address the income inequality through the national share scheme and other asset-enhancing programs.

"They are trying to do as much as they can to help the poor short of giving cash outright," said Song from GK Goh.

Officials from the prime minister's office were not available to give further details on the proposed share scheme and economists said the shares were likely to be similar to government bonds.

"It's not very clear at all but they could be some form of government securities that people can hold in their name," said Arjuna Mahendran, a regional economist at SG Securities.

PAP has won every election since the former British colony gained independence in 1965 and is virtually certain to stay in power with the opposition having difficulty fielding candidates to contest all the seats.