will act because they know that the objectives of the terrorists are totally beyond the pale. these are not innocent political dissidents exercising their democratic rights. they are ruthless fanatics, quite willing to destroy innocent lives in order to create civil strife and animosity between communities and countries, shake confidence in southeast asian economies and their legitimate governments, and weaken the basis of the states. they cannot succeed, but they can cause great harm in trying. provided the governments respond vigorously to the extremist threat, they can contain the problem and gradually restore confidence to the region. access to markets third, southeast asian economies need to boost external demand by strengthening their access to the major developed markets. in the short term, there is little we can do about the cyclical downturn. but for the longer term, favourable and assured access to key trading partners will allow southeast asian countries to maximise benefits from free trade and globalisation, and make themselves more attractive to investors. one basic approach is to promote multilateral trade, and contribute to a successful outcome of the doha development agenda of the world trade organisation ( wto ). but we need to complement the multilateral approach with bilateral free trade agreements ( ftas ) with our key trading partners. this is why singapore is actively pursuing an fta strategy. we have concluded ftas with new zealand, japan, and the european free trade area ( efta ), and hope to conclude agreements with the us and australia very soon. singapore ’ s aim is not just to boost our own trade links with our fta partners, but also to catalyse broader economic engagement between asean and its trading partners. this is indeed happening. after new zealand concluded its fta with singapore, australia and new zealand proposed starting a closer economic partnership agreement with asean. last year, asean and china agreed to set up an asean - china fta within 10 years. weeks later, prime minister koizumi of japan proposed a japan - asean comprehensive economic partnership, to be modelled on the japan - singapore bilateral agreement. similarly, we hope that the us - singapore fta will become a model for a usasean fta in the longer term. these link - ups show that asean is not turning inwards and away from the global economy, and will give asean a valuable edge as an investment destination. singapore ’ s economic restructuring : philosophy & initiatives given this bracing environment, singapore is at a turning point in our economic development. the whole landscape has changed. we

convenience. although cash is widely used and accepted in our society today, e - payment alternatives such as mobile payments and electronic wallets are gaining popularity. the “ tap - and - go ” feature of contactless cards is much in sync with the hurried lifestyles of today, hence the growing popularity of these cards. convenience is an important consideration in developments within the cashless space of payments. in 2008, for the first time, giro overtook cheques by volume of transactions in singapore. in fact, giro itself – which is based on batch processing – will be eventually overtaken by straight - through, real - time payments systems. the third “ c ” is cost - effectiveness. handling cash is costly. according to a 2010 study by retail banking research, the cost of distributing, managing, handling, processing and recycling cash in europe is estimated at €84 billion. this is equal to 0. 6 per cent of europe ’ s gdp. how to reduce the cost of cash without compromising confidence and convenience? a number of countries are exploring alternative note substrates and coinage materials to increase their durability, quality, security, and cost effectiveness. besides managing manufacturing costs, countries are looking at the end - to - end costs of currency distribution and collection. some have outsourced their currency functions, while others have automated their currency facilities to improve efficiency in currency processing. in singapore, we began automating currency processing and warehousing operations in 2000. today, singapore has one of the few fully automated currency handling facilities in the world. conclusion all of us gathered here share a common objective in establishing a secure, convenient, and cost - effective payment system. it is important for central banks and key industry players to engage one another and share best practices and lessons learnt. the currency conference serves this purpose. we have a large turnout from some 75 countries. we have many excellent speakers, and a diverse cast of delegates. i hope all of us can benefit from the sharing of experiences and the networking opportunities provided by the conference. i wish you all a successful and fruitful conference ; and to our guests from abroad, an enjoyable stay in singapore. bis central bankers ’ speeches