is our social security and pension fund scheme. we refocused the cpf on its core objective of providing for the basic needs of the majority of singaporeans, in terms of retirement needs, healthcare expenses and home ownership. we are tightening the use of cpf for buying properties, so as to leave more for retirement needs. we are reducing the coverage for high - income singaporeans, who should be able to plan and provide for their own retirement. we are lowering contribution rates for older workers, who are most vulnerable to losing their jobs. these measures will make our labour market more flexible, and contribute to our economy ’ s overall resilience and competitiveness. second, we want to encourage entrepreneurship in order to develop more local and foreign start - ups and emerging enterprises to complement our strong base of mncs and established local companies. in this rapidly changing, unpredictable environment, the best way to spot and exploit new opportunities is not by centralised direction, but through the drive and entrepreneurship of our people. according to the 2001 global entrepreneurship monitor report, singapore ranked 27th out of 29 countries in terms of entrepreneurial activity. we need to do better. we need to imbue our young with entrepreneurial instincts and attitudes, through their school education and life experiences. at the same time, the government should cut red tape, create more economic space for private enterprise, nurture high - potential local enterprises and develop a culture tolerant of risk - taking, experimentation and honest failure. a self - renewing, self - sustaining entrepreneurial culture will not emerge overnight, but we are making some headway. ten singapore companies made it to this year ’ s list of forbes ’ global 200 companies with revenues under us $ 1 billion. this ranks among the largest number of companies for any country. a third area of focus is the development of our human capital, both local and foreign. singaporeans rank highly in technical skills, and our students often top international mathematics and science competitions. but we need to improve our soft skills, such as people skills, management skills, communications skills, as well as cultural and artistic skills. we will also continue to welcome foreign talent to work, live and play here, to add to our talent pool. fourth, we need to identify, nurture and promote new areas of growth in both manufacturing and services, the two complementary engines of our economy. the continuing emergence of lower - cost locations spurs us to constantly review and refresh our manufacturing value proposition, be it in refining

. arguably, immediately following the dollar s float in 1973, u. s. authorities did not intervene and left it to others to adjust their currencies to ours. we did not sense a need to hold what we perceived to be weaker currencies in reserve because presumably we could always purchase them in the market, when, and if, the need arose. we held significant reserves in only that medium we judged a “ harder ” currency that is gold. it has become a general principle that monetary authorities reserve only those currencies they believe are as strong or stronger than their own. thus, central banks reserve balances except in special circumstance hold no weak currencies of which i am aware, other than standard transaction balances that are not viewed as stores of values. we in the united states built up modest reserve balances of dm and yen only when we perceived that the foreign exchange value of the dollar was no longer something to which we could be indifferent, as when, in the late 1970s, our international trade went into chronic deficit, inflation accelerated, and international confidence in the dollar ebbed. the choice of building reserves in a demonstrably harder currency is almost by definition not without costs in real resources. the budget cost of paying higher interest rates for the domestic borrowings employed to purchase lower yielding u. s. dollar assets, for example, is a transfer of real resources to the previous holders of the dollars. the real cost of capital because of risk is higher in a weaker currency country. countries with weaker currencies apparently hold hard currency reserves because they perceive that the insurance value of those reserves at least equal they re cost in real resources. reserves, like every other economic asset, have value but involve cost. thus, the choice to build reserves, and in what quantities, is always a difficult cost - benefit tradeoff. in general, the willingness to hold foreign exchange reserves ought to depend largely on the perceived benefits of intervention in the foreign exchange markets. an evaluation along these lines would appear to require a successful model of exchange rate determination, and a clear understanding of the influence of sterilised intervention. both of the above have proved to be a challenge for the economics profession. the two main policy tools available to monetary authorities to counter undesirable exchange rate movements are sterilised intervention operations in foreign exchange markets and monetary policy operations in domestic money markets. empirical research into the effectiveness of sterilised intervention in industrial country currencies has found that such