as well? these tricky questions are important for us to resolve. similarly, i don't think we yet fully understand the role of year 2000 preparations in either the late 1990s investment boom or the acceleration in productivity. billions of dollars were invested to fix the y2k bug, and we don't know how much of that spending was for the replacement of obsolete systems ( and hence should be considered as depreciation in measuring the stock of available capital ) or for the expansion and upgrading of systems ( which, parenthetically, is the assumption we use in all our growth accounting exercises ). but although these y2k remediation efforts were costly and at times painful, virtually all the business leaders i know would assert that the efforts produced significant efficiency gains in the use and management of their information systems. thus, the net effect of y2k on our economy is still very much an unanswered question, and i'd like to see the research community systematically assess it. current and prospective productivity growth the cyclical slowing in 2001 and gradual expansion in 2002 have raised a critical issue. that question is : will productivity growth in the years ahead more closely resemble the substantial gains over the 1960 - 73 period or the weaker performance of the 1973 - 95 slowdown? i tend to believe that future growth will most likely follow the 1960 - 73 pattern, and the most recent record of productivity growth reinforces that view. productivity is a cyclical variable that typically falls in recessions. however, during the most recent downturn, productivity never declined and instead continued to grow at a fairly strong pace. moreover, after the tragic events of september 11, many economists feared that the u. s. economy would weaken substantially and that productivity growth would suffer a severe setback as well. in the event, output per hour in the nonfarm business sector has grown in excess of 5 percent over the last four quarters. how should we interpret this truly extraordinary performance? cyclical forces probably played some role. after september 11, many businesses sharply reduced their payrolls in anticipation of a slump in demand. but demand continued to grow briskly, and these companies learned to squeeze more output out of a smaller workforce. these efficiency gains likely were facilitated by the capital investments of recent years. adjusting to new technologies takes time, and it is plausible that such an adjustment process has continued to boost productivity growth in recent years. although cyclical forces and lags in the assimilation of new technologies have been important

economic development of china's western provinces, helping chinese enterprises to exploit international opportunities, and the training of personnel and exchange of talent. officials from both countries are pursuing these ideas. to help chinese companies go international, singapore has mooted the idea of setting up a base in singapore to help chinese companies market their products to the region and beyond. we are actively facilitating singapore business ventures interested in china, providing market information, office space and consultancy services, and maintaining business networks. we have also launched an asian business fellowship programme, to develop a talent pool with operational experience, and network and market knowledge in china. politics & security second, southeast asian governments must tackle the security problems resolutely and decisively. terrorism is not unique to southeast asia. it is a global problem, originating in the middle east, and spreading to every continent. southeast asia cannot be immunised against the terrorism virus. the large muslim populations in the region are a natural host which extremist islamic groups will exploit for concealment and political cover. fortunately, the vast majority of southeast asian muslims are peaceful and moderate in their beliefs. the problem therefore lies in dealing with the extremist elements in a way which does not alienate the majority of peaceful muslims. this calls for deft political handling. southeast asian governments are already taking action. in malaysia, with a muslim majority, the government has acted with despatch, arresting members of extremist groups and rooting out their organisations. the malaysian government also controls the outflow of malaysian students studying in madrasahs in pakistan, where they may pick up extremist ideas. in singapore, with a sizeable muslim minority, the government has arrested extremists belonging to the jemaah islamiyah group, and severely disrupted their operations. we have gone beyond security actions and taken pains to explain the problem to the population, so that muslim singaporeans do not feel that they are all under a cloud of suspicion, and the non - muslims do not treat their muslim fellow citizens any differently than before. muslim community leaders have come together to publicly condemn the extremists as doing great harm to the muslim community. their clear and unequivocal collective stand has been enormously helpful in maintaining confidence and avoiding a rupture in racial and religious harmony. in indonesia, where 90 % of the population is muslim, the government has been extremely circumspect in acknowledging and dealing with the problem. the extremist groups