speeches the experience of other leading cities suggests that demographics is not destiny. yes, vibrant cities do attract people – and their additions to the labour force add to growth. but the main source of their growth and dynamism is not headcount but productivity. this is not an in - depth study but it appears that about two - thirds of overall gdp growth in the cities shown is due to productivity improvements. in comparison, productivity has accounted for about half of singapore ’ s gdp growth. there is clearly scope for us to do better and thereby sustain our dynamism. how can we do this? 12 / 17 bis central bankers'speeches first, singapore has scope to reap the human capital dividends that are arising from the continuous investments we have made in education and training in past decades. as recently as 2000, 45 % of the resident workforce had below secondary school education, and only 12 % had university education. in just one - and - a - half decades, those ratios have converged, reflecting the cumulation of efforts made over preceding decades : the proportion with less than secondary education has dipped below 30 % ; while the proportion of the university - educated has more than doubled to nearly 30 %. the effects of this transformation in human capital will continue to be felt in the productive capacity of the workforce. with higher levels of education, the ability of the workforce to take on more complex tasks and to leverage on technology is substantially stronger. there is more to come. the share of the university - educated may not continue to as rise sharply but there is still plenty of scope to increase the share of those with secondary, post - secondary and diploma & professional qualifications. • they will be better placed to transform the nature of many jobs, raising standards and quality, thus enabling productivity and wages in these occupations to rise. second, there is scope to improve the quality of the foreign workforce. we should increasingly be concerned about the skills of the foreign workers that we take in, rather than just the numbers. in fact, more skilled foreign workers will mean that we will need less of them. the trend of improving quality in our foreign workforce has already begun. the proportion of work permit holders has declined by about 10 percentage points over last 10 years, while the proportion of s pass and employment pass holders has 13 / 17 bis central bankers'speeches increased by around 10 percentage points. this trend must continue as we restructure our economy towards higher value - added activities, seek deeper skills, and undertake

and g3 economies. notably, regional trade is on the rise again, on the back of an increase in machinery and equipment exports. the most keenly watched macroeconomic development this year – the normalisation of us monetary policy – has so far been largely benign. the global economy should be able to absorb the ongoing gradual increase in us interest rates, as the rise in rates is itself a response to strengthening economic activity. but vigilance is still called for : economies and markets have been accustomed to low interest rates for a very long time. they could be thrown off balance if rates rise faster than expected. and debt levels in emerging market economies are much higher than they were before the crisis. this is a source of potential vulnerability as interest rates rise. downside risks around baseline growth forecasts have declined – there is more consensus now about growth outcomes. but tail risks arising from economic policy and geopolitical uncertainties persist. one, trade protectionism. an escalation of trade tensions could disrupt global supply chains and curtail international trade, with an outsized impact on many small open economies in asia, including singapore. two, disorderly brexit negotiations could weigh on consumption and investment in the uk, with spillover effects on the eurozone ’ s exports and growth. trade and banking channels could transmit these shocks to asia. three, rising populist and nationalist sentiments could compel politicians to take measures that unnerve investors and depress economic growth. singapore economy against this backdrop, the singapore economy is forecast to grow by 1 - 3 % this year, with a strong likelihood that it would be higher than the 2 % registered last year. growth has been somewhat uneven across sectors but this is to be expected in the initial stages of an external - led pickup. growth is expected to gradually broaden to the rest of the economy over the course of the year. it is useful to look at the sectoral distribution of growth from the perspective of the three broad clusters in the economy. the trade - related cluster has been a major driver behind the rebound in the economy since q4 last year. this cluster comprises the manufacturing, transport & storage, and wholesale services sectors. these activities comprise some 43 % of the economy and, on average, contributed slightly over two - thirds of sequential gdp growth in q4 2016 and q1 2017. electronics manufacturing firms expect business conditions to remain favourable in the next six months, albeit slightly slower than in h1 2017. mas expects higher growth