In a speech televised Sunday evening, Mr Goh laid out a 10-year plan he called "New Singapore." The blueprint aims to deal head-on with the challenges posed to Singapore's economy from China's rise as an emerging manufacturing powerhouse. It calls for an increase in productivity to the level of Switzerland.

"I have seen China's transformation at close quarters," Mr Goh said. "It is scary."

"Our biggest challenge is therefore to secure a niche for ourselves as China swamps the world with her high quality but cheaper products," Mr Goh added.

Mr Goh, an economist by training, said Singapore's new economic strategy would enable it to develop "new bases of growth."

He said the country, currently dependent on electronics exports, could no longer rely on past policies which, until now, had succeeded in transforming the resource-poor island into Southeast Asia's richest economy.

"Singapore's growth up to now has primarily been investment-driven," Mr Goh said. "This has taken our prosperity to an extraordinary level. But looking into the future, there are limits as to how much more we can rely on such a strategy," he said.

Mr Goh said his new economic vision would focus more on spreading Singapore's wings into regional and global markets, as well as a continued restructuring of the economy.

Mr Goh announced his blueprint amid growing signs that Singapore's economy has stalled, hurt by the severe downturn in the global electronics sector and the slowdown in the United States.

Singapore's key non-oil domestic exports slumped by a record 24 percent in July from a year earlier, marking the fourth straight month of decline. That has prompted warnings by some economists who say the Singapore economy could contract over the full year. The economy grew 9.9 percent in 2000.

Mr Goh rejected any intervention in wages to prop up the income of less-skilled workers.

But, in an innovative bid to ward off further economic sluggishness, Mr Goh said Singapore would give the country's 3.2 million citizens "shares" of government revenue that will pay a guaranteed dividend and are partly redeemable for cash.

The so-called New Singapore shares will be redeemable immediately for cash, though not all at once. Details of the program will be announced after the third-quarter economic performance, he said. "How much to whom, and when, will depend on the state of the economy this year," he said.

The shares will pay a guaranteed dividend for a fixed number of years, plus bonus payments as the economy recovers. Lower-income brackets will be given more.

"It sounds like government bonds," handed out for free, said Song Seng Wun, an economist with G.K. Goh Research Pte. "Instead of stuffing people's pocket with cash, it's in line with the government plan to deepen the bond market."

Arjuna Mahendran, a regional economist from SG Securities, said that China's huge pool of cheap labor makes it increasingly difficult for countries like Singapore, with high wages, to compete.

"We basically have to gear ourselves to become more productive," he said.

China's impending entry into the World Trade Organization will accelerate its rise on the economic ladder and draw foreign investment away from the region, including Singapore, Mr Mahendran said.

(AFP, Bloomberg)