"Friends tell me many young Singaporeans believe Singapore's best years are behind us... They are pessimists and wrong," the country's founding father said in remarks to his parliamentary constituency.

He likened Singapore to an aircraft flying at 30,000 feet (9090 metres) that still has the potential to soar higher.

"We have another 6000 feet to rise to 36,000 feet, the height that top US and European airlines are flying," said Lee, who stepped down as prime minister in 1990 but took the influential post of senior minister in the cabinet.

While Singapore has reached First World status in just a generation in the economic field, "we have not reached First World standards in the finer things in life -- music, culture and the arts, the graces of a civilised society," he said.

"The generation now in their 30s and 50s can take Singapore there in the next 15 to 20 years. The best is yet to be."

Lee said Singapore must continue to reduce the cost of doing business in order to remain competitive.

"Wages, rents, fees, taxes have become too high, compared not only to China and India but also our immediate neighbours," he said.

China and India are offering many of the goods that Singapore traditionally exported at a fraction of the cost.

The recovery from the impact of the SARS outbreak in the first half of 2003 did not signal the end of Singapore's problems, Lee said.

"It only gives us breathing space to make other basic changes that will reduce our high cost base and increase productivity."
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