Our 35^th anniversary in the year 2000 has shown expected high growth of 8.8 per cent for the first half, making possible 7-8� per cent for the whole year. This big rebound is mainly because of the high exports of electronic and computer products to the United States. The second reason is that our neighbours are recovering. Despite its present problems, Indonesia has made 3-4 per cent growth in the first six months of this year, Malaysia 6-7 per cent growth, and Thailand 5.2 per cent.

A word of caution is necessary. Foreign investments into the region, especially to Indonesia, have slowed down appreciably. If investment inflows do not increase, this recovery will not be sustained. Without new investments, growth must depend on exports and domestic consumption, which are not enough to generate jobs and increase the GDP for the longer term.

In the mid-term, 3-5 years, I believe the economies of our immediate neighbours, Thailand and Malaysia, will bounce back. Sooner rather than later, order must be restored in Indonesia, capital will flow in and workers get jobs. Then confidence will return and things will improve.

Singapore is the only country in Southeast Asia with no slowdown in investments throughout the crisis (see annexes 1 & 2). This is a tribute foreign investors have paid to the way the present ministers have managed the economy during the crisis. Foreigners have noted how the people of Singapore have responded, putting the national interests first by taking CPF cuts that helped this rebound.

Investors have confidence in Singapore because the government and people have been prepared to undertake the changes that are necessary because of political and economic changes. We have liberalised key sectors � banking, telecommunications, and a graduated first opening up of the media. The Internet will go broadband and information flows will be massive. We may have another five years before broadband will bring to any PC screen all the information you want, sent from anywhere in the world.

These changes in communications and computer technology exemplified in the Internet are transforming the world economy. The Americans have gained a tremendous lead as first movers. The Europeans are trying to catch up, but they are several years behind. The Japanese are a few more years behind the Americans in the use of the Internet and e-commerce. But the Japanese are ingenious and are catching up not through the PC but by hand-phones. With I-Mode � digital hand-phones that give access to the Internet � they can download information and send email messages with a DoCoMo I-mode handphone, small enough to put into your pocket. This will profoundly change how people work, live and amuse themselves.

We must prepare ourselves for this new world. It is easier for young people, those in the schools and universities, even those at work who are below 35. They are quick to pick up. Those over 40 who have not been to secondary school will have difficulties learning and becoming adept at IT and the Internet. This is so not only in Singapore. I have met Americans in their 40s and 50s who are just beginning to learn how to use the Internet and getting familiar with e-commerce. I even know of several American CEOs of big corporations who get their secretaries to download programmes for them onto their laptops so that they can go to meetings, where all they need use are the "up" and "down" keys to present their charts and arguments on the screen. That is not good enough for those who are not CEOs. Our whole working population must be familiar with the computer and the Internet.

The big problem is retraining our middle-aged workers, both men and women who are being or will be retrenched from jobs in the assembly line. The new jobs that new investments provide require workers who are computer-literate or skilled in operating machines. It takes too long and costs too much to train a computer illiterate or unskilled worker. To overcome this, the NTUC and the government, using the SDF, will get as many workers as possible retrained even while they are holding jobs. This will increase their employability in this new economy.

For the young, it is a different challenge. Those who are creative and enterprising must be encouraged to strike out with their like-minded colleagues to create new software that people or businesses will find useful. Some will succeed. More will fail. We cannot be afraid of failure. Instead, we must learn from failure and try again. That is what successful entrepreneurship requires.

Whether we like it or not, the technology and the new economy are going to spread worldwide. We have to ride this wave of new technology and not be overwhelmed or marginalised by it.

We will do well this year, and maybe next year. But to do well in five years' time, we must adopt the new economy by incorporating IT into all our economic activities, and encourage start-ups by the enterprising and creative young. And when the region picks up, our growth will increase as the whole region rises.

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