It means we have to be proactive, not just react to events after they have taken place. This is what the work-plan is about - planning our work over the next five years, in the context of likely scenarios. I believe, barring a war in Asia which all countries must work hard to prevent, we can be optimistic about our future. Singapore is situated at the heart of a dynamic Asia. Our economy has undergone major restructuring over the past few years. It has regained its competitiveness. We are expanding our economic space and have shown that we can manage change as a people. There is no reason why Singapore should not continue to do well. The MAS Strategic Planning Exercise has yielded three inter-linked and mutually reinforcing priorities for the next five years. These are not new goals. They are priorities. Let me elaborate on them and the key strategies to support them. Strengthening our position as a leading financial centre in Asia Our first priority is to strengthen Singapore’s position as a leading financial centre in Asia. We will work closely with the financial industry to enlarge our investor base, build greater liquidity and depth in our financial markets, and expand our reach beyond traditional markets. To succeed, the industry needs to attract talented and dynamic professionals from a broad range of disciplines and experiences. I am pleased that the industry has established the Financial Industry Competency Standards Committee to develop internationally-aligned competency benchmarks for the whole financial sector.

Some $ billion or more could flow into regional markets to tap diversification benefits. This presents an opportunity for the asset management companies and capital markets industries here to develop investment funds and structured products, including Islamic financial products, to manage a portion of this wealth. Maintaining excellence in a riskier environment Our second priority is maintaining excellence in our core central banking functions in a riskier environment. In recent years, the external environment has become more volatile and complex. At the same time, our economy has been undergoing significant structural adjustments. We must ensure that the formulation and conduct of monetary policy continue to be robust and flexible. We will further strengthen our monetary policy formulation process by enhancing our forecasting, surveillance and research capabilities. We intend to reinforce our macro-econometric model by introducing new features that will enable us to better assess the impact of risks on key sectors and relationships in the economy. In the area of surveillance, we have started an intensive industry consultation process as part of our exchange rate policy review. We will continue to fine-tune this process. To enhance our understanding of the economy, we are constructing a flow-of-funds framework to get a better understanding of financial flows across different sectors of the economy. Changes and increased volatility in financial markets also pose challenges for the implementation of monetary policy. Singapore dollar capital markets have grown enormously over the last five years. Foreign participation has gone up.