Singapore Prime Minister Goh Chok Tong has tried to boost the flagging morale of the city-state's citizens, who have been hit by a stuttering economy and rising anxiety about terrorism threats. He vowed yesterday that terrorists would not prevail, although the apparent emergence of suicide bombers in the region signalled 'a significant increase' in the dangers they posed. Mr Goh said that despite rising unemployment and a clouded near-term outlook, Singapore's economy would recover. The remarks came ahead of the prime minister's own political anniversary - he took charge of the Singapore government 12 years ago today, although he did not mention this in his address. 'Younger Singaporeans . . . grew up assuming that the stability and growth of the 1980s and early 1990s were the natural order of things,' he said. 'Therefore, when faced with the current adversity, some of them lose heart easily, believing that Singapore's situation has never been worse. Their flagging spirit is palpable.' Last year, Singapore was clobbered by its worst recession in a generation, which threw thousands out of work. This year, authorities have arrested dozens of alleged militants, claiming they had links to al-Qaeda and were intent on fomenting religious strife in the region. The combination of the economic downturn, a patchy recovery and the threat of terrorism has soured the national mood, clearly irritating Mr Goh. 'It is not true that things have never been worse,' he insisted, before mapping out the Cold War confrontations that wracked Southeast Asia, historical problems with neighbouring states and convulsions in Indochina. He said that in contrast, conditions today were much improved, with solid relations between Beijing and Washington, economic growth in China and a robust regional grouping in the 10-member Asean. 'The great power proxy wars of the 20th century that destabilised and devastated so much of the Third World, including Southeast Asia, are unlikely to recur in the foreseeable future,' he said, adding that ties among Washington, Moscow, Beijing and Europe were 'essentially stable'. 'I am not trying to brush aside the anxieties felt by many Singaporeans. But we have to place them in perspective. 'Yes, our economic growth has slowed. Unemployment has gone up to 4.8 per cent. But we still have thousands of jobs begging for workers. 'Most importantly, the Singapore of today is better prepared for the challenges. We have more resources and skills. The international and regional situations are also more favourable than 40 years ago.' Echoing comments made by his predecessor, Lee Kuan Yew, on Monday, Mr Goh said the terrorist threat would founder in the face of a concerted official response. 'I do not believe that the terrorists can win. They are in the minority. They do not speak for Islam. They have no programmes that can make life better. They only kill and strike terror. No civilised government and people support them,' he said. But there are severe problems on the horizon, including the uncovering of evidence by authorities in Indonesia and Malaysia this week of suicide bombers and, in the event of a US-Iraq war, a feared backlash against Americans. 'Besides its impact on the economies, [the war in Iraq] will arouse strong anti-American feelings among the region's Muslim populations,' Mr Goh warned.