I would first like to welcome all of you to this dinner which has been organized by the community organizations in Sembawang to celebrate our 37^th National Day.

Three serious challenges face Singapore today.

On the economic front, there is more competition, a less buoyant international economic environment, a need to restructure our economy to make it more competitive.

During this period of restructuring, it is not surprising that many Singaporeans feel worried about whether they will keep their jobs.

Singaporeans, who have lost their jobs, face difficulties in getting enough money to meet their daily needs.

Unemployment is higher than in previous years.

Singaporeans are naturally concerned and worried.

As for security, we are facing new threats after the events of September 11 last year.

The new security threat of terrorism now threatens the whole civilized world.

We have to take this terrorist threat seriously.

Singaporeans would have been shocked by the arrests made by the ISD in January this year.

The arrests indicate that these security problems do not occur only in far away countries but can happen in our region and even in our country.

Our social cohesion has also been tested as a result of events such as the ISD arrests in January.

It is a sign of the strong social cohesion that we have built up over the years that we have not allowed such issues to divide us.

Singapore�s diversity is one of our strengths.

We have a multi-racial, multi-religious, multi-cultural society.

We have to learn to live with one another and to manage our differences.

Handled well, our diversity will make Singapore society more vibrant and stronger.

The Government is taking active steps to deal with the above three challenges.

We have set up an Economic Review Committee to restructure our economy to make Singapore more competitive so as to create more jobs and maintain our growth rate.

On the security front, the Ministry of Defence and the Ministry of Home Affairs, together with our other Government agencies, are working to build up new capabilities to help us to manage the new security threat of terrorism.

To strengthen our social cohesion, we have set up Inter-Racial Confidence Circles to foster better understanding among the different racial and religious groups in our society by promoting activities such as dialogues and visits to different places of worships.

The above challenges are large and long term.

They will not be solved in one day.

There is no one single measure that the Government can adopt that will resolve these problems overnight.

To overcome the problems, we have to work together, under the leadership of the Government, to identify the issues and formulate realistic solutions.

One thing I want to make clear tonight.

We will overcome these challenges which face Singapore today.

There is no doubt about this.

We have overcome even more difficult challenges in the past.

Take the issue of water supply for Singapore.

For many years, the assumption was that Singapore will always have to rely on other countries for our water supply.

We could have accepted this situation.

We could have continued to depend on other countries to supply us with the water we need.

But we did not do so.

We looked into alternative solutions, new technologies.

Reverse Osmosis - using membrane technology to get clean water by desalination of sea water and reclamation of used water.

Now we have NEWater.

We can be self-sufficient in water supply if we want to.

We need not depend on other countries for our water supply.

By hard work and willingness to use innovative technology, we have resolved this major issue of water supply which has been a problem for Singapore since our independence.

In the same way, we will resolve the other challenges which face us.

Working together, we will ensure that Singapore continues to be a thriving metropolis, increasingly more vibrant and creative with many jobs and a high standard of living for our people.

Let us work together to make Singapore and Sembawang an even better home for ourselves and our children.

I wish everyone a happy National Day.

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