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SINGAPORE, April 21 (AFP) - Just when you thought Singapore had come up with every economic weapon possible to fend off rising regional competition, the island's authorities have added the English language to the list.

The majority of Singapore's 3.2 million people are proficient in English, which is one of four official languages and the language of administration in the multi-racial Southeast Asian society.

But the widespread use of Singlish -- a hybrid combining English, Chinese, Malay and Indian -- has sparked concerns among Singaporean leaders that the Southeast Asian state could lose its lustre in the eyes of foreign investors.

The concern was serious enough to jolt Prime Minister Goh Chok Tong into launching a national drive in 2000 to encourage Singaporeans to speak proper English.

This year, Singaporeans are being told the need to speak English properly has never been greater now that the economy is being seriously challenged by neighbouring countries, particularly Malaysia.

Speaking English the right way will take on added importance as the island moves to develop other business sectors in a bid to reduce its dependence on manufacturing, which accounts for close to a quarter of economic output.

"As Singapore seeks to expand the service sector in areas with great potential, such as healthcare, education and tourism, speaking good English will help us achieve this goal," Education Minister Teo Chee Hean said.

"In the hospitality and service industries, where image is all important, speaking good English is nothing short of a necessity," he said at the launch of the third annual Speak Good English Movement (SGEM) last week.

Poorly endowed in natural resources, the former British colony is heavily reliant on foreign trade and investment as well as tourism and retail for its livelihood.

The widespread use of English in commerce has always featured among the island's biggest trump cards in drumming up foreign investment at home. The other official languages are Mandarin, Malay and Tamil.

Singapore, hit by its most severe recession since independence and experiencing increased competition from the region, is expected to adopt far-reaching measures in next month's national budget to revamp its economy.

In addition to tax reforms and other measures in the near future, the government has made it clear that language will be important in the long term.

A recent survey of expatriate businessmen in Asia by the Political and Economic Risk Consultancy think-tank showed businessmen preferred Singapore to Hong Kong because of the former's better proficiency in English.

"This is an advantage we should strive hard to maintain," Teo said.

"Given its widespread use, the ability to speak good English is clearly a distinct advantage when doing business and communicating with the world," he said.

If spoken properly, the English language can become a "key competitive edge" for Singapore as the country attempts to stave off the regional challenge from neighbouring economies, Teo said.

"It enables us to escape our small geographical confines and reach out to the rest of the world," he said.

Lydia Sum and Carol Cheng, two famous Hong Kong actresses with a wide appeal in Singapore, which is nearly 80 percent ethnic Chinese, have been roped in to participate in this year's campaign.

The two stars will share their experiences of learning to speak English on television in coming weeks.

Singaporeans will also be flooded with messages about ways they can improve their English, and the British Council will be producing a series of lessons available over the telephone. 

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