Goh Keng Swee
Singapore
“Sir, since that was not a supplementary question, may I be allowed to comment briefly on that. When we form a Committee of the House to inquire into an activity of the Government, the assumption must be that there has been something improper. In this instance, where is the impropriety?”
“The career of Brig-Gen Lee is well-known to the public. It has been published in the newspapers. Why then does he come out with all this drivel, other than to impute improper motives? Mr Jeyaretnam: Sir, I object to the term "drivel" as spelt out by the First Deputy Prime Minister. He should know better as a Member of this House.”
“Sir, this is getting most tiresome. So I will just say this - that Brig-Gen Lee Hsien Loong has proved himself in so many ways, both inside the Army and outside the Army, to be a person of outstanding quality. When the Member for Anson says the public are worried, he is again talking nonsense.”
“Sir, I rise to clarify. Actually, the limits are not set by me. I do not have a heavy hand. I regard the MAS as the implementing agency of Government, and in this respect I have to listen to the Minister for Finance and the Minister for Trade and Industry.”
“How you set them, how restrictive or how liberal, would determine two things: (1) the degree of imported inflation from abroad via goods and services from abroad, and (2), the degree of capital inflow from abroad which will affect our money supply in Singapore.”
“Sir, if the land could be more profitably used, say, for commercial or residential purposes and if the Minister for National Development requires such land, then, of course, the land will be acquired and the generous terms will apply.”
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“In such a situation we should develop an indigenous technology centred initially around the exploitation of natural resources. But this would take time, and would constrain the economy to slow growth rates for possibly several decades while universities and research institutions need to build up staff and expertise. But the pay-off would come in the end and most of it would accrue to citizens of the country. Our situation is the opposite to what I have described. An open door policy is one which at least ensures rapid growth right from the start. When foreign corporations bring their expertise, what we experience, as a developing nation, is a brain-drain in reverse. Naturally we pay for this. We pay in the form of profits and know-how fees remitted abroad and high salaries to foreign management and technical personnel. This is the position we find ourselves in today and it is likely to persist into the mid-seventies and, in lesser extent, even after that. It would be wrong for us to resent the inflow of management personnel, engineers and technicians from abroad. On the contrary, we could regard them as blazing the trail for the new industries which we do not have the knowledge and technology to set up ourselves. We should also regard them as presenting us not only with opportunities for future graduates of our Universities and technical schools but also as performing invaluable services in giving firm indications as to the lines of science and industrial technology which our Universities and training institutions should develop. Without such clear indications, Singapore might make the mistake of other developing nations in producing large numbers of university graduates who cannot find useful employment.”
“Here the problem will be, for some considerable time to come, to recruit Chinese-speaking academic staff of calibre into the University. While Nanyang graduates who have returned from post-graduate studies abroad will grow in strength and numbers, there is need to recruit senior staff in various disciplines. The field of recruitment is much narrower than is the case with the University of Singapore. Further, many of the best Chinese-speaking scientists and scholars available today -outside of the People's Republic of China are engaged in industrial research or academic teaching in the United States of America. To attract them to Nanyang University would be both a complex and expensive exercise, but some method must be found of doing this if Nanyang University were to develop in stature and repute as a centre of scholarship and research. I have dwelt at some length on University education. The subject arose out of current and projected shortages of engineers and management personnel which proper university training programmes could in course of time help to solve. But universities have a more crucial role in the development process, if one takes a long-term view of it. Let me set the subject in its true perspective. We have made long and strenuous efforts to attract foreign investment into Singapore, but not because we need the money. The high level of our overseas assets shows that we have more money than we can usefully spend in Singapore. We welcome foreign investors for the two things they bring with them - technology and markets. If Singapore were a large country, say, with a population of 100 million and endowed with a variety of natural resources, the open door investment policy we pursue may not be the best long-term development strategy.”
“The growth of student population as well as the increase in expenditures of the two Universities financed from Government revenues has failed to keep pace with the expansion of the economy. Enrolment at the two Universities and the Polytechnic and Ngee Ann College combined grew during the decade from 9,355 to 16,214, a 73 per cent increase as compared with a 146 per cent increase in the Gross Domestic Product. Matters had reached such a pass at the University of Singapore that it was found necessary for a Cabinet Minister to be appointed its Vice-Chancellor. And yet, it may be that the appointment of my colleague, the Minister for Science and Technology, could be just the step required to restore a relationship of confidence between the University and the Government so that the University can develop into an institution more in tune with the needs of the society which nurtures it. There is welcome evidence that the student body and a growing part of the academic staff are becoming aware of this. Certainly without his appointment to the post of Vice-Chancellor, it is unlikely that my colleagues and I would entertain the proposal to move the University at enormous expense from its present constricted campus at Bukit Timah to one of the most scenic sites in Singapore in the range of hills known as Kent Ridge. Since his appointment as Vice-Chancellor, it has been increasingly apparent to the Government that the University would need more funds not only to expand existing faculties and establish new ones, but also to increase the pay of academic staff to levels which will ensure that they will attract and retain the keenest minds produced in the Republic. Improvements in similar measure are also necessary at the other University, Nanyang University.”
“In the case of Nanyang University, the deterioration of administration prior to 1964 had allowed the control of the University virtually to pass into the hands of student activists who were manipulated by the Communist United Front. Nanyang University virtually became a training ground for the higher echelon cadres of the Communist United Front. Government intervention as a security measure then became inevitable. Since the restoration of the University's administration to more normal standards, improvements have been made and standards have been raised. The case of the University of Singapore was different. Here, until recently and perhaps not even then, there appeared to be a total absence of meaningful dialogue between the University and the Government. The University, particularly in certain departments in the Faculty of Arts, in which expatriate staff were dominant, viewed the Government not as a possible source of support and encouragement, but as a potential danger and a threat to its autonomy. Trivial incidents, which sometimes arose as a result of poor communications between the two sides, were inflated out of all proportion to their real importance. Part of the trouble seems to stem from the attitudes of some expatriate staff who have brought with them not merely a competence in their field of specialisation but also contemporary styles and postures which may be meaningful in the context of strident anti-establishment and liberal postures. In part, these reflect trends towards permissiveness and promiscuity in the societies from which these expatriates came and to which they belong. But these are totally irrelevant to the situation Singaporeans are facing.”
“In the foreseeable future, we are likely to set up those industrial activities which require assiduous application of engineering skills and workmanship in well-developed and well-known industrial processes in which we have a natural advantage by being able to produce or import engineers, technicians, craftsmen and skilled workers capable of performing the most exacting standards of work but at a much lower cost than the advanced countries could. Even so, the limitation here is that restrictions may be imposed on the import of quite a number of these products by industrialised nations which want to preserve the home market for their own industries. Further, not all countries would favour a policy whereby the techniques which they have evolved as a result of sustained and costly research and development work are passed on to others. But within such limitations, there could be a wide field to choose from. The practical application, even at these modest levels of technology, requires a substantial upgrading of skills at all levels - from research scientists, engineers, technicians, skilled craftsmen -to standards beyond anything we have achieved now. It is in this sense that we should try to improve our reservoir of scientific and technological knowledge and experience. This leads me naturally to the subject of the development of our Universities which are institutions to provide the requisite people to perform these tasks. It is one of the misfortunes of Singapore that the development of our two Universities has encountered difficulties in the past which have stunted their growth.”
“The second concerns University development in Singapore in general as well as the output of scientists, engineers and technicians in particular. In recent months, there has been increasing reference in public as well as private discussions to the need for Singapore to develop "science-based and technology-oriented industries". A well-known British financial commentator recently said that whenever he hears the phrase "advanced industrial technology" he reaches for his gun. Too often this catch phrase is used as an attempt to mulct the public purse of sizable subsidies to finance industrial research which has no hope of resulting in commercially feasible -products. I have a great deal of sympathy for this position, but for different reasons. The use of the term to our industries, existing as well as potential, is often misleading. As an -example, the electronics industry in America works at the frontiers of science and technology. The electronic components we make in Singapore probably require less skill than that required by barbers or cooks, consisting mostly of repetitive manual operations. Let us not presume that at the comparatively low level of scientific and technological know-how that we find ourselves today, it is our role to train scientists and engineers who will engage in research at the frontiers of -knowledge. Ours should be the more mundane, if practical, approach.”
“The problem is similar in regard to management personnel and technical staff, though here local supply, if stepped up immediately, may be able to fill the gap earlier than is possible with engineers. It is therefore necessary, as a matter of high priority, that we should relax our immigration and work permit restrictions on the inflow of personnel belonging to the categories I have described. At present, they are given entry and work permits provided they are sponsored by an employer. That is to say, they have to find work here before they are allowed the necessary permits. It would be a clear advantage to liberalise the conditions under which such people can come into Singapore, acquire permanent residence and eventual citizenship. It would be useful, for instance, if they could be allowed here for any length of time they wish so that they can do the job-hunting and, in this way, fit into the best slots available to them. This is a matter of great urgency, as it is well known that a great amount of crimping already takes place. Indeed, the Technical Education Department of the Ministry of Education, which has to train large numbers of artisans and craftsmen, are finding it difficult to retain their engineers and technicians who have to do the training at the Department's Industrial Training Centres, Vocational Institutes and secondary technical schools. - University Development This discussion of the ways in which we should try to fill the gap between demand and supply of engineers leads me to two related subjects. The first relates to the levels of scientific knowledge and technological know-how which our future industries are likely to demand.”
“As regards management personnel, the output of accountants and business management graduates will fall seriously short of requirements, the shortage, in Dr Winsemius' estimate, coming to some 200 a year over the next three years. As regards the demand for technicians, who have to support the efforts of engineers, the position is even worse. Taking into account the large requirements of technicians in the defence forces, we are likely to be short of technicians by 1,500 to 2,000 each year over the next two years. These estimates are based on the assumption that industrial growth, now running at between 15 per cent and 20 per cent a year, will be sustained over the next five years. There is no reason why this cannot be done. By 1974, the industrial work force should have increased to around 247,000 men. Further, as much of the increases will accrue from the establishment of large industrial units rather than a proliferation of small ones, the demand for engineers, and management and technical personnel will be of a different order of magnitude from what we have been accustomed to. This, then, will be the principal difficulty which we have to overcome - not so much to attract investment into the manufacturing industries but to supply investors with skilled personnel of all grades, without which modern industry cannot operate. Since it takes four years for an engineering student to graduate and several more years before he acquires sufficient experience to be able to work effectively in an organisation, clearly we cannot depend on local supply to meet the demand in these fields.”
“Unless we see a world depression developing on some scale - and the consensus among the experts is that this is an improbable eventuality - we shall see in the next few years, the fruition of many industrial projects, some of them of a size exceeding anything that we have hitherto attained. The activities connected with offshore oil exploration in the waters of the Archipelago are likely to give rise to a number of interesting manufacturing and service industries based in Singapore. The problem we are likely to encounter between now and 1975, barring a recession of course, is to provide the large numbers and wide varieties of skills which the new industries will need. In this connection, we have had the advantage of a recent study by Dr Albert Winsemius who led the first United Nations mission in 1960 to Singapore to advise on policies on industrial development. Dr Winsemius is an old friend of Singapore; in 1967 he was awarded the Distinguished Service Medal. Dr Winsemius pays regular visits to the Republic, at our request, to check on our economic health and to discern problems ahead and suggest remedies. He completed his last visit about a month ago. His prognosis is that the shortages of skills, which we knew existed, will become increasingly serious and more acute than we had believed. For instance, his calculations indicate that despite the intention of the University of Singapore to increase the annual output of engineers from 80 at present to 210 by 1974, the Republic will remain short of engineers over the next five years by between 450 and 500 each year.”
“If events follow the course as predicted by the American official economists, then neither the world of advanced nations in Europe nor the less affluent underdeveloped countries need fear a marked decline in their trading positions. GATT (the General Agreement on Tariffs and Trade) predicts that world trade may increase this year by between 4 per cent and 8 per cent. The O.E.C.D., optimistic as ever, forecasts a 10 per cent growth. My own preference is for the GATT forecast; if the outcome is near the higher point of the GATT forecast range, there probably would be no unduly harsh impact on our economy. However, if events take a course different from the U.S. official forecasts, it is likely to be for the worse rather than for the better. Then the negative factors created by reduced British military expenditure will be compounded. These are matters beyond our control. All we can do is to take note of possible dangers looming on the horizon and make due preparation for them. I cannot but underline my warning against the dangers of complacency. On balance, the next three years may not be as good as the last two. Fortunately, we have accumulated sufficient fat in the good years. The Longer-term Perspective I now turn to the longer-term perspective, looking to the mid '70s and beyond. Unless the stability of the area is seriously upset, it is likely that we can sustain and even increase the momentum of industrial growth which we recently achieved. The Promotion Centres established by the Economic Development Board in Europe and America and Japan have gained good experience in the last few years.”
“Because of the strength and power of the American economy, it was only in the last few months that the tight money policy of the Federal Reserve Board has produced visible results. There have been significant reductions in the volume of industrial production, in the volume of new construction, in expenditure on consumer durables and a small increase in unemployment. Yet price inflation remains alarmingly strong, at annual rates of 54 per cent to 64 per cent in recent months. In spite of the slowing down and even decline in several of the important economic indicators, investment plans of the large American corporations and in the public sector have not so far been reduced to the extent needed to dampen inflationary pressure. The demand for investable funds in the face of the tight money policy of the Federal Reserve Board has resulted in the rise of interest rates to historical heights. Economic trends in the next twelve months in the United States are difficult to predict. The administration economists visualise a levelling-off of growth measured in real terms, and increase in the rate of unemployment from a low level of some 3.3 per cent in some months last year to an average level of 4.3 per cent this year, perhaps reaching 5.0 per cent at the highest level. They do not see any recession of significant proportions. They expect price inflation to moderate from the annual rate of 54 per cent last year to around 4 per cent or 44 per cent this year. They expect the economy to pick up momentum in the second half of this year. This scenario, as set out by the administration, is probably the best development one can hope for.”
“There is likely to be a slowing down of world trade in 1970. The extent of this is yet uncertain. Much of this uncertainty derives from the outlook of the U.S. economy for this year. The American economy is so large and powerful that fluctuations in its level of activity exercise a strong influence on the economies of the rest of the world outside the Communist bloc. For just over two years, the American administration, in the last year of President Johnson and the first year of President Nixon, has been battling with the problems of domestic inflation and unsettled balance of payments position. The l960s have seen a sustained and powerful growth of the U.S. economy, the G.N.P. increasing from U.S. $503 billion in 1960 to U.S. $932 billion in 1969. In the last four years of the decade, as the American economy approached and reached the level of full employment, inflationary pressures began to build up. These pressures became grave, when military expenditure in Vietnam was substantially increased as from 1967. With domestic price inflation there has also occurred the inevitable concomitant - a squeeze on the balance of payments. Whereas, throughout the 1950s and the first half of the 1960s, the American balance of payments on trading account invariably showed an annual surplus of anything between U.S. $3 billion and $5 billion a year, the last year or two has seen this reduced to very small amounts, quite inadequate to support the large overseas payments on account of American capital invest- ments abroad, expenditure by American tourists and government expenditure overseas, including aid finance. Since December 1968, the Federal Reserve Board has begun a policy of severe credit restraint.”
“Singapore, contrary to the belief of many Backbenchers, is a lightly taxed country. Tax revenues amount to about 13 per cent of G.N.P. In other countries they are much higher, as much as 30 per cent or more of G.N.P. in some instances. So long as we maintain a robust rate of economic expansion and maintain government expenditure to essentials, we need not emulate the example of these highly taxed countries. The Near Future With this glad news to the taxpayer out of the way, I turn to look at our immediate economic prospects. It is important that we should not be lulled into a sense of false security by the mild boom now going on. There are dark clouds on the horizon, and it is as well that we prepare for more difficult times. The first adverse factor affecting our economy over the next two years will be the completion of the British military withdrawal by 31st December, 1971. In the next three years, the economy of Singapore will feel the impact of a decline of British military expenditure, from $415 million in 1969 to zero in 1972. There is likely to be a reduction of some $100 million to $150 million for this year and a final phasing out of the remaining $250 million to $300 million in 1971. While no longer the catastrophe we once feared they would be, declines of expenditure of this magnitude cannot but have an unpleasant impact on our economy. In 1969, the reduction was estimated at some $40 million and was hardly felt. As regards world trade which, as we have repeatedly seen, influences our economy significantly, it is unlikely to provide the substantial impetus to growth which it did in the years 1968 and 1969. In these two years, world trade expanded at unprecedented rates, 11 per cent and 14 per cent respectively.”
“) Limited and, second, the takings at the gate of the Stadium, which one hopes will exceed the cost of maintenance. The Government has embarked on a number of enterprises in the business field, including a shipping line, a shipbuilding yard, a ship-repair yard, a small arms plant and a development bank. These require loan finance and a sum of $65.1 million has been set aside for this purpose. The Jurong Town Corporation has been charged with the duty of developing Blakang Mati, soon to be renamed, and has commenced work. Further tourist attractions will be developed on islands in Jurong Lake. Money for these projects required in the coming financial year is estimated at $8.9 million. Taxation Policy This concludes my observations on the Ordinary and Development Estimates. Before I go on to discuss possible future courses our economy may take, I should say a few words on taxation policy. The Government's policy in recent years has been to depend on fast economic expansion and improved tax administration to provide increased revenue rather than raise rates of taxation to higher levels or introduce new taxes. Last year, some minor tax increases as well as new taxes were announced to meet the rising needs of our defence build-up. 1969 revenue increased by $131.5 million over 1968. The yield of new revenue measures was $30.4 million while economic expansion contributed most of the balance of $101.0 million. Treasury estimates of tax yields, as set out in the Estimates and explained in the Treasury paper, indicate that increasing yields, resulting from economic growth, will be adequate to meet expenditure increases. I therefore do not propose to raise new taxes, apart from the recent increase in tobacco duties to bring them in line with Malaysia.”
“It is public knowledge that the Government proposes to move the University of Singapore from its present campus to Kent Ridge. A sum of $500,000 is set aside to meet the cost of planning the new university campus. The World Bank has expressed an interest in providing finance for the cost of university development. For the first time in many years, the Judicature appears in the Development Estimates. This is to provide Subordinate Courts with decent accommodation. They are now scattered at various places along South Bridge Road, Sepoy Lines, Empress Place, New Bridge Road and Outram Road. The Chief Justice tells me that some of the buildings are not only old and dilapidated but a danger to their occupants. A new Court building will be erected at Havelock Road to house 55 odd-rooms, chambers for judges and magistrates, waiting-rooms, witnesses' rooms and other paraphernalia required for the administration of justice. The cost of the building is expected to amount to $6.4 million. I now come to the loan portion of the development programme. The Housing and Development Board will be provided with a loan of $100 million to finance its accelerated building programme. Hitherto, the annual loan provision stood at $50 million. Jurong Town Corporation has some $50 million set aside and this money will pay for reclamation of swamp land at the old West Coast Road, the extension of Jurong Wharf, construction of workers' flats and social amenities. The National Stadium, the foundation-stone of which I was privileged to lay a fortnight ago, will be offered a loan of $7.8 million. It is intended to form a Corporation to run the Stadium. The income to repay this loan, as well as future loans, will come from two sources. First, the profits of Singapore Pools (Pte.”
“The Ministry of Education will be provided with $22.1 million for development projects of which there is a long list. Most of these projects are for the advancement of technical education. The Technical Education Department of the Ministry has introduced workshops in academic schools so that all secondary school students will have some experience of workshop practices. In addition, the conversion of academic schools into academic-cum-technical schools and conversion of the old vocational schools into industrial centres are proceeding as scheduled. Four vocational institutes are under construction or extension and a new one at MacPherson will soon commence construction. Expenditure on academic education consists mostly of continuing projects. However, a new building will be provided for Raffles Institution at Grange Road. Earth-works have begun on a 14.2 acre site and the building is expected to be completed by the middle of next year. The total cost is $2.4 million. There will be 28 class-rooms, two lecture-halls, seven workshops, eight science laboratories, a library, an assembly hall, a gymnasium, and ancillary rooms for extra-curricular activities. In addition, there will be a large sports field. Under the Ministry of Labour's development projects, a Hotel and Catering Training School will cost $2.2 million. It is hoped to provide training for some 1,000 trainees a year when completed. The Ministry of Science and Technology proposes to build a Popular Science Centre. This will give citizens a better understanding of what modern science is about; it will also be useful to secondary school science students and others. In addition, the National Museum will be improved and extended at a cost of $300,000.”
“6 million on Public Health services. $1.6 million will be spent in buying 55 new refuse-collecting vehicles. New cleansing and night-soil depots will be established at a cost of $678,000. There will also be development of hospital services costing nearly a million dollars. The Ministry of Communications has important development projects under way. The passenger terminal at Paya Lebar will be redeveloped at a cost of $5 million, of which $3 million will be spent in 1970-71. It is expected to be completed by the end of next year. The existing jet and terminal parking aprons will be extended to relieve congestion, at a cost of $1.3 million. Improvements to taxi-ways, apron areas and airfield drainage will require another $1 million. The Government proposes to extend the runway now 11,000 feet long to 13,200 feet long. It will also construct a new cargo terminal and a new hangar large enough to accommodate the Boeing 747. Only token provisions, however, have been entered in the coming financial year. The star item in the Ministry's development programme is undoubtedly the earth satellite station for which some $10 million will be required. It is also necessary to buy additional teleprinter machines and telex machines, demand for which has exceeded supply by a wide margin. The national auto telex exchange will be improved and new micro-wave radio bearers for the main trunk system will be introduced. The total bill for all these is expected to be $15.2 million. The meteorological services will be provided with up-to-date equipment, including wind-finding radar and a replacement for the storm-warning radar. The Ministry of the Interior and Defence will need $51.4 million, mostly for works and buildings and land acquisition, to house the new defence units.”
“Among agricultural projects, work has started on developing hydroponics farming, while the farm licensing and collection of agricultural statistics accounts for $150,000. Fisheries will be provided with more than $½ million; most of it is for training of fishermen. It is to be hoped that this massive injection of funds into the agricultural sector will result in an improvement on the anaemic performance of 2.9 per cent growth rate in the last decade, the lowest growth rate of any sector. Expenditure on roads and bridges is expected to amount to $13.3 million. Drainage and flood alleviation will cost another $4.2 million. This includes the cost of completing the first phase of the Bukit Timah flood alleviation project for a sum of $2.3 million. The total cost of this phase, which will drain flood waters from the Bukit Timah Canal to the Ulu Pandan River through a canal which runs into a tunnel cut under a hill, amounts to $6.84 million, spent over four years. Canals and subsidiary drains in various parts of the Island will be lined with concrete and, with minor drainage schemes, will cost some $1.9 million. Sewerage development continues apace, and a sum of $12.1 million is provided under Head 97 for this. Major sewerage projects are under construction at the Kallang Basin, Serangoon, Jurong, Thomson Road, Urban Renewal North, Urban Renewal South, Bartley Road and Upper Changi Estate. In addition to these nine major schemes which cost $7.2 million, there will be three major sewage treatment and disposal works for extension or construction at a cost of $3.2 million. There will also be miscellaneous projects costing $1.7 million. Most of these schemes will see completion in the financial year 1971-72. The Ministry of Health will be spending $2.”
“The budget provision for this Ministry is $95.65 million. The major schemes administered by this Ministry include the Bedok reclamation scheme, the Kallang Basin reclamation scheme, construction of roads and bridges, drainage and flood alleviation schemes, as well as sewerage works. The Bedok reclamation scheme has been proceeding well, some 1,000 acres having been recovered from the sea at a cost of $43 million so far, and another $11 million will be required in 1970-71. The second phase of this large land reclamation scheme will cover 125 acres of land between the Singapore Swimming Club to the end of Tanjong Rhu. A further 165 acres along Nicoll Highway will also be reclaimed at a total cost of $24.9 million, of which $8.3 million is expected to be spent in 1970-71. The Kallang Basin reclamation scheme is 80 per cent complete, 399 acres of land having been reclaimed at a cost of $22.9 million. A further $2.6 million is required next year to reclaim the remaining 93 acres. Urban renewal is expected to cost $15.6 million in 1970-71. The first phase, rebuilding in Crawford, Sepoy Lines and Havelock constituencies on 270 acres of land has been completed with the construction of 2,500 flats and 800 shops. Another 950 flats and 97 shops are nearing completion. The Urban Renewal Department will need $1.9 million by way of salaries and wages while another $¼ million will go as Government's contribution to the United Nations State and City Planning project. Primary Production is forging ahead with ambitious development schemes costing $2.5 million. Animal husbandry projects alone will cost $1.0 million. This includes a revote of $300,000 for completion of the Jurong abattoir, and $500,000 for the pig and poultry training and research institute.”
“A total of 121 new posts will be provided to the Public Health Division of the Ministry, 68 to be deployed in environmental health, 33 in school health services and the rest elsewhere. More money is also to be spent on public cleansing, maintenance of drains in the catchment areas, supervision of hawkers and such like services. A total of 110 new refuse vehicles have been or will soon be supplied to the Ministry and they will require an increase of $240,000 on maintenance expenditure. A substantial increase in anti-mosquito activities will cost $¾ million. The years ahead will see further expansion in environmental health control. There is likely to be very substantial capital and re-current expenditure on garbage disposal. New policies are being developed in the Ministry not only to improve on existing services but also introduce new ones, particularly to combat the growing menace of air and water pollution. The experience of other countries and other cities indicates that we are well advised to take measures in advance of the deterioration to such proportions that remedies become very costly. A committee is investigating and identifying those areas of medical specialisation in which Singapore could achieve pre-eminence by providing available medical expertise with the latest in equipment and facilities. Development Estimates, 1970-71 The Development Estimates provide for a sum of $438.5 million. This is roughly divided in two equal portions - one of $215.6 million for expenditure on government development projects, while a sum of $222.9 million is set aside for loans to statutory authorities and government-owned companies. The major part of direct government expenditure is spent by the Ministry of Law and National Development.”
“Expenditures by the Ministries of Culture and Social Affairs have been kept within bounds. They show a reduction in expenditure of $425,000 and $1.17 million respectively. The saving in Social Welfare is principally due to a decrease of $1.45 million needed by way of public assistance and the tuberculosis treatment allowance. No doubt this is the result of better housing, more employment and a better health environment. There is little change in the Ministry of Labour. The closure of the Second Industrial Arbitration Court, made possible by improved labour-management relations, provides adequate savings to meet annual increases and some small staff increases. The Ministry of Law and National Development gets a modest increase of $3.0 million, or 6.7 per cent on the 1969 vote of $44.6 million. Primary Production continues to expand its staff and services. The abattoir in Jurong needs more staff and so does the Car Parks Division. The Fisheries Section of Primary Production has been given $909,000 as back payment of rent to the Jurong Town Corporation for the Jurong Fisheries Port and Central Auction Market. But the main increases required by the Ministry of National Development are in respect of public works. An additional $400,000 has been provided to keep government offices, buildings and grounds in good condition, as well as to maintain properties taken over from the British Armed Forces. There is a small saving from the present policy of dismantling public standpipes and providing domestic water supply direct to homes. The Ministry of Health gets a substantial increase of $6.4 million. More than a third of this represents annual increment of salaries and other additional payments to staff. However, there will be an increase in the volume of services provided.”
“Such is the magnitude of the shift in priorities from academic to technical education. Annual increments and consolidation of salaries to teachers in the Government service amount to $5.7 million. Grants to aided schools increase by $5.0 million as a result of salaries consolidation and annual increments. The four institutions of higher learning, Ngee Ann College, Nanyang University, the Singapore Polytechnic, and the University of Singapore, will receive an increase in grants by an amount of $3.9 million. The Ministry of Communications, which looks after policy on essential services to the economy by way of air and sea communications as well as postal and telecommunication services, receives a modest increase of $825,000 or 1.9 per cent. Civil Aviation gets a large part of this, by way of new staff and facilities. A sum of $150,000 is to pay for public utility charges which will be incurred as a result of the new cargo complex at the Airport, the instrument landing systems and the taxi-way and approach lights. New baggage handling equipment, including four tractors and eleven trolleys, will cost $65,500. There are also staff increases in the Meteorological Services, the Postal Services, the Telecommunications Department and the Marine Department. Demand for all these services increases with economic growth and it is the policy of the Ministry to maintain high standards of efficiency. I have already referred to the increased allocation to the Ministry of the Interior and Defence and no further elaboration is required. Apart from the expansion of the armed forces, it is also necessary to strengthen the Immigration service. At the same time, the Ministry had found it possible to delete a total of 508 posts mainly of Police grades, thereby saving some $1.1 mill ion.”
“14 new posts in the Banking and Control Units of the Commissioner of Banking and seven new posts to look after Government's rented properties. Customs and Excise are to be provided with 74 new posts to keep pace with increased work at the Singapore Airport, at the Port Authority and Free Trade Zone and elsewhere. Inland Revenue is to be given a substantial increase consequent on the creation of 105 new posts. 52 new posts go to the Anti-Evasion Unit recently established with the assistance of the American Inland Revenue authorities. A total of 47 new posts are created for the Property Tax Division. Both Inland Revenue and the Property Tax Department have long suffered from staffing deficiencies and an effort must now be made at improvement. The Ministry of Foreign Affairs is given an additional $2.3 million, its vote increasing from $8.9 million in 1969 to $11.2 million in 1970-71, a 25.6 per cent increase. Salary consolidation and normal salary increments account for $½ million. The requirements of 44 new posts to man overseas establishments as well as headquarters cost $¼ million. New and increased allowances add up to another $528,000. Additional travelling expenses, diplomatic bag service, etc., take a further $380,000. An additional sum of $129,450 has to be provided to the Mission in Manila while other existing Missions will cost $444,000 more. The Ministry of Education has been given a 9.3 per cent increase, or $14.9 million. The education vote increases from $159.1 million to $174.0 million the next financial year. A total of 380 new posts are provided of which 367 are in the Technical Education Department. In addition to 367 new staff, the Technical Education Department will have a further 843 posts transferred to it from the General Education Department.”
“I will now comment on major expenditure changes in respect of each Ministry. The Prime Minister's Ministry is provided with additional sums to pay for new posts in the Corrupt Practices Investigation Bureau, an expense which none of us will grudge. However, there is a reduction of $158,120 for the Bases Economic Conversion Department as a result of more accurate assessment of the needs of that department. The Prime Minister's Ministry accordingly will show a small reduction in total expenditure. The Ministry of Science and Technology requires new posts under its plan of reorganisation, to provide for effective economic and statistical evaluation as well as to determine the needs of industry with greater precision.. The Ministry of Finance is provided with a substantially enlarged vote, $173.7 million as against $137.9 million in 1969. Of the increase of $35.8 million, $10 million results from increasing the transfer to the Development Fund from $30 million to $40 million. An additional $2.0 million goes to a new electronic computer for the Ministry, and $1.8 million is set aside for the Population Census next June. A sum of $12.3 million represents grants to the Economic Development Board and its subsidiary agencies. This expenditure was formerly paid out of the Development Estimates, a practice which I consider erroneous. There is also a new item under Contributions and Charitable Allowances, a sum of $3.1 million being our contribution to the ASEAN Fund. The Housing Board subsidy is to be increased by $3.6 million next year. There will be staff increases in the Ministry - 21 new posts in the new Industry Department, 12 new posts for the new Overseas Investment Section.”
“1 million in respect of statutory expenditure. This is due principally to additional provisions for interest payments and sinking fund contributions. An increase of $1.5 million results from pension increases due to the salaries consolidation exercise carried out last year. 4.36 p.m.”
“) It is only necessary for me to set out in broad outline the policy adopted by the Government in framing the budget for the forthcoming financial year and to draw attention to some of the more significant expenditure items both in the Ordinary and the Development Estimates. The policy this year follows the same lines as those laid down at the last Budget. The needs of defence are taken as given datum. What remains of anticipated revenue yields is distributed to the other sectors of the Government services. As was the case last year, care had to be taken in limiting expenditure on the social services to the most essential functions. Consequently, the increase of expenditure on the social services is the smallest of the four main functional divisions. There is a 9.3 per cent increase from $292.0 million in 1969 to $319.2 million. The economic services that are essential to the maintenance of the momentum of growth were provided with adequate funds. Taken as a group, the money voted for this division increased by no less than 25.1 per cent from $87.1 million for 1969 to $109.0 million in the next financial year. Actually, the real increase is far less than this, as certain expenditures that used to be financed out of the Development Estimates are, in the coming financial year, charged to the Ordinary Estimates. Defence and internal security take the largest portion of the budgetary cake, no less than 31.7 per cent. The money to be supplied to Defence has long been pre-determined by the revised Defence Plan which I described in detail in last year's Budget. The defence plans had to be revised when the British Government advanced the date of the closure of their bases to 31st December, 1971. There is a substantial increase of $52.”
“Our difficulties were compounded by irresponsible actions of trade unions manipulated for political ends. We sought a solution in a Common Market in Malaysia that proved a dead end. Throughout the decade there was a persistent search for practical solutions, a patient building of institutions and infra-structure, a generous allocation of funds, an accumulated collection of talented staff. In the end, it paid off. It is imperative that we should never, either through extravagance or carelessness, fritter away all that we had so laboriously built up. We must build on the foundation of the accumulated experience of the decade and ensure that progress and prosperity will continue to higher levels of consolidation. Before I turn to suggest some policies that could help to achieve this, I wish to turn to the more mundane and immediate task of the budget. Estimates of Revenue and Expenditure, 1970-71 I first turn to the Estimates of Revenue and Expenditure for the financial year 1970-71. Following the practice introduced last year, I have presented to Parliament two Treasury papers*, one on the Ordinary Estimates and the other on the Development Estimates. These explain the reasons for increased expenditure, and forecast revenue yields in the forthcoming financial year. The Treasury papers also deal with revenue and expenditure performances in 1969. It is not necessary for me to enter into great detail of itemised allocations of money to heads, subheads and items of expenditure, nor need I go through the yield forecast of different classes and items of revenue. (* Papers Parl. Misc. 1 and 2 of 1970.”
“The first is the establishment of our own currency and the transfer of assets from the old Malayan Currency Board to our own Currency Board when the old notes were exchanged for new. The assets of the Currency Board at the end of 1969 amounted to $645.37 million. The second element arose out of a large increase in commercial bank deposits. As a result of economic expansion, favourable trade balance and, possibly, some inflow of 'hot money', bank deposits more than doubled since 1965, increasing from $1,222.0 million to $2,745.3 million in 1969. The Government sold Treasury bills to commercial banks and the holding of such bills at the end of 1969 was $500.13 million compared with $23.07 million at the end of 1965. As the proceeds of Treasury bills were invested abroad, this had the effect of neutralising a good part of the increase in bank deposits and in this way, helped to avert possible inflationary pressure. The remainder, some $696 million, represented the accumulation of annual Government surpluses since 1965 as well as those of the statutory authorities to the extent that they were invested in Government securities. In ordinary circumstances, it is not necessary to hold such large assets overseas, which is really tantamount to investing our money abroad instead of investing it in the Republic itself. However, for reasons which I shall go into later, these assets may come in useful when possible economic trends in the next three years may require us to run down these assets from their present rather high levels. This seems to be the right note on which to end this narrative of the decade. We started it with a grave and persisting problem of unemployment fueled each year by successive floods of post-war babies coming of age.”
“453]: 'It is a sobering thought that with the prodigious efforts we put in and the vast amounts of money and resources which the Government had been channelling towards increasing the growth of the manufacturing industries, all that had been achieved is a net increase of some 5,000 jobs each year in these industries. Clearly this rate of increase is inadequate to meet our future needs.' Happily, performance since then has improved and I give the following employment figures in the manufacturing industries from 1966 to 1969: 1966 - 51,272 1967 - 56,762 1968 - 72,603 1969 - 87,128 In the last two years employment in the manufacturing industries has been increasing at an annual rate of around 15,000. This is more in keeping with what we need. In fact, taking into account that the stepped-up employment in industry coincided with the intake of national servicemen into the Armed Forces, the result had been a tight labour market, more especially in the professional and skilled grades, where shortages in certain lines were acute. Finally, I want to deal with the very rapid increases in our official overseas assets which grew from $631 million in 1965 to $2,445 million at the end of 1969. An increase of this proportion, about four times in four years, is not a common occurrence in the monetary history of nations. This growth in our overseas assets was not due to financial wizardry. It was firstly the result of institutional changes in note issue arrangements after independence; secondly, the consequence of the financial policies we followed as an independent Republic; and thirdly, the reflection of the rapid economic growth I have just described. There are three components to the increase of our overseas assets.”
“The ships accounted for in these figures did not include, as far as could be ascertained, ships registered under the flag-of-convenience terms provided for in the revised Merchant Shipping Ordinance passed in Parliament towards the end of last year. Future calculations of Gross Capital Formation would have to draw a distinction between Singapore-registered ships whose beneficial owners are residents in the Republic and those registered for flag-of-convenience purposes. This distinction is by no means easy to make in all cases. As regards aircraft purchases, the Malaysia-Singapore Airline's aircraft renewal and expansion programmes commenced in 1968, when deliveries of the new Boeings took place. New aircraft delivered in 1968 and placed in the Singapore Registry were valued at $59.4 million. In 1969, $37.7 million worth of new aircraft were delivered. Half of the new M.S.A. fleet carry Malaysian registration and these are not included in the above figures. The other noteworthy feature of the investment process in these four years was the large but regular increases in expenditure on buildings and works. As against this, expenditure on machinery and equipment remained level during 1966 and 1967 and took two large steps in 1968 and 1969. This reflects the recent increase in the pace of industrialisation with which most of us are familiar. This increase is also reflected in employment figures, to which I now turn. In the Budget Address of 5th December, 1967, after quoting figures of employment as reported in the annual census of manufactures, I made the following observations [Vol. 26, No. 8, col.”
“5 The increase during the period in private sector investment from $234 million to $596 million, an increase of 156 per cent, compares with $239 million to $323 million in the public sector, or a mere 35 per cent growth in the public sector over three years. This is as it should be. It reflects the response of private enterprise to the growing social maturity, to the National Trades Union Congress' success in promoting labour responsibility and to the Government's policy on wage stability and industrial incentives. All these created a favourable general investment climate. There was an interesting development in 1968 and 1969 which calls for attention. The statistics on capital formation give separate figures in respect of expenditure on machinery and equipment. transport equipment, that is, ships, aircraft and vehicles mainly, and on buildings and works. The figures for the period under review are given in Table 5. TABLE 5 COMPONENTS OF GROSS CAPITAL FORMATION, 1966-69 Machinery Transport Buildings Total and Equipment and Equipment Works ($ Million) ($ Million) ($ Million) ($ Million) 1966 204.2 20.7 248.4 473.3 1967 208.7 23.4 286.2 518.3 1968 283.6 106.4 345.9 735.9 1969 400.7 116.6 401.2 918.5 A striking feature about the table is the sharp increase in 1968 in expenditure on transport equipment. The explanation lies in the substantial purchases of ships and aircraft in these two years. Purchases of ships in 1968 amounted to $30.2 million and in 1969 to $56.5 million. This development fits into the general picture of sharp increases in entrepot trade during these two years against the background of burgeoning world trade. In 1969, purchases of ships included the four ships bought by the Republic's newly-established national shipping line, the Neptune Orient Lines.”
“2 per cent in 1968 and 22.9 per cent in 1969. The contribution of the manufacturing industries to the Gross Domestic Product reached $827 million in 1969 compared to a mere $170 million a decade ago. The effect of this expansion on employment will be discussed later. Expansion of trade and industry was more than enough to offset the modest reduction in British military expenditure. In 1967 this amounted to $489.9 million and it was reduced to $415.4 million by 1969. We should remember that as from now British military spending will be reduced at a much faster rate. Between 1967 and 1969, quite apart from expansion of manufacturing and trade, even the tourist trade increased sufficiently fast to offset the reduced British military spending, so that increased earnings on trade and industry virtually formed net additions to the domestic product. Earlier I have referred to total investment which increased throughout the decade not only in absolute terms but also as a proportion of the Gross Domestic Product. The increase in total investment was especially marked in the post-Malaysia era. The figures are given in Table 3. TABLE 3 Gross Domestic Capital Formation, 1966-69 Total Investment Percentage of ($ Million) G.D.P. 1966 473.3 14.1% 1967 518.3 14.3% 1968 735.9 17.3% 1969 918.5 19.0% There are certain interesting features about the growth of investment during this period quite apart from its size. The first is that the fastest increase occurred in the private sector. The figures between public sector and private sector investment are given in Table 4. TABLE 4 PUBLIC AND PRIVAE SECTOR INVESTMENT, 1966-69 Public Private Total Sector Sector ($Million) ($Million) ($Million) 1966 239.6 233.7 473.3 1967 224.9 293.4 518.3 1968 300.9 435.0 735.9 1969 322.4 596.1 918.”
“5% The 1969 figure is based on preliminary estimates and it is likely that the final estimates would show a larger figure. Expansion in 1966 derived its impetus principally from a resumption of trade with Indonesia as well as a general increase in world trade. In absolute terms, the earnings of the entrepot trade increased from $305.6 million to $377.0 million in 1966. The manufacturing industry provided a useful gain of some $72 million in value added, from $414.3 million to $486.8 million. The good start the Republic made in 1966 was not sustained the following year, which registered an increase of only 7.5 per cent. The principal reason for this was a temporary decline in world prosperity. World trade which before that year had been growing annually at between 8.4 per cent and 11.9 per cent in the previous four years, showed a growth of only 5.4 per cent in 1967. Our entrepot earnings in 1967 showed a very small increase, just over one per cent on the previous year. At the same time there was a marked decline in British military expenditure from $549.5 million to $489.9 million. The experience of 1967 is pertinent because the two elements making for the slowing down of our growth - reduced military expenditure at the British bases and levelling off of world trade - are prospects which face us in the next three years. The last two years of the decade were exceptionally good for Singapore. The principal thrust was an unparalleled expansion of our entrepot trade, earnings of which more than doubled. Buoyant world trade conditions during 1968-69 helped sustain our own growth of trade. World trade in these two years increased by 11 per cent and 14 per cent. At the same time, earnings in the manufacturing industry showed substantial increases - 19.”
“Then, of course, the end of confrontation brought about a resumption of Indonesian trade. This gave the first year on our own the main impetus to economic growth. Outside conditions were favourable. But this by itself did not ensure our prosperity if we were unprepared to make the effort required to take advantage of our opportunities. Fortunately, the institutions which were established as early as 1961 had developed in experience and expertise. I am, of course, referring to the Economic Development Board which was the Government's main agency for promoting industrial growth. Industrial estates at Jurong and elsewhere had provided a wide range of industrial sites to meet every conceivable demand of industry. The Development Bank was amply supplied with funds and the E.D.B.'s overseas promotion officers improved in skill and efficacy in their efforts to attract large corporations to the Republic. Last, but by no means least, the Employment Act passed in August 1968, with the support of the National Trades Union Congress, gave an impressive demonstration of the will of the people to overcome all obstacles to make temporary sacrifices the better to secure the future for themselves. Perhaps more than anything else, the Employment Act projected an image of Singapore among large potential foreign investors, of a disciplined and rational people upon whom they could depend for the success of their enterprises. With these favourable external and internal influences, except for the year 1967, the economy moved ahead briskly. The Gross Domestic Product increased substantially, details of which are set out in Table 2. TABLE 2 Gross Domestic Product at Factor Cost 1966-69 ($ Million) Increase 1966 3,365 10.6% 1967 3,617 7.5% 1968 4,257 17.7% 1969 4,833 13.”
“" This account of the final period of the decade will describe how our economy grew in the last four years and will attempt to give some reasons for such growth. In the post-Malaysia period, Singapore's Gross Domestic Product increased at a compound annual rate of 12.3 per cent as compared with 6.5 per cent during Malaysia and 8.1 per cent pre-Malaysia. Trade, industry and tourism provided the main thrust to our economic growth during this period. The result of robust economic expansion on the Government's finances was gratifying. Annual revenue increased from $508 million to $934 million last year with but minor adjustments in taxation rates. The reasons for expansion during this period stemmed from external as well as domestic sources. As regards the first, what undoubtedly helped most was the strong position of the economies of the United States, Europe and Japan. Notwithstanding recurring monetary crises during the last three years of the decade, the 1960s saw what was virtually a long sustained boom among the rich nations. One after another, they reached conditions of full employment and had to depend for further expansion either on imported labour, as happened in the case of Germany and, to a lesser extent, Britain, or they had to move some of their manufacturing operations abroad, as happened particularly with the United States and, to a lesser extent, Japan. We were also assisted by conditions in Hong Kong where, as a result of growth at an extremely fast rate, tight employment conditions became apparent in the last two or three years. Hong Kong, whose wage levels used to be substantially below those of Singapore, ceased to be a provider of labour to foreign investors at cheaper rates than Singapore.”
“The Labour Department work force figures also showed an increase of about the same amount, 188,701 for 1965 as against 178,787 for 1963. It is apparent that the manufacturing industry was providing the main new job opportunities. But these never reached the proportions which would reduce unemployment significantly. The onerous terms of the financial agreement under which we entered Malaysia resulted in a decline in our overseas assets for the only time in the decade. Our overseas assets which stood at $748.4 million at the end of 1963 were reduced to $631.0 million at the end of 1965. Economic Development, 1966-69 I now turn to the last period under review, the years as an independent sovereign state. On the morning of August 9th, 1965, I was in my office in Fullerton Building brooding over the enormous problems facing the country and the Government. The problems of the future loomed in awesome and intimidating proportions. Here we were, an island trading outpost, with its economic hinterland in other countries, a vulnerable arrangement as confrontation had shown. Our token defence forces were manned mostly by citizens of another country. Even the water we drank had to be mostly imported. We had no natural resources other than a diligent and enterprising people. At 10.00 a.m, news of the separation was announced over the Radio. It was greeted by the firing of crackers in Chinatown. I thought this a light-hearted response to a grave situation. Two years later, in my Budget Statement of December 1967, I was able to say, "After two years of independent existence, the Republic of Singapore continues not only to survive but also to flourish, to the surprise of many observers.”
“On the other hand, there was a very large increase in the value of British military expenditure, as one would expect. British military expenditure increased by 27.7 per cent in 1964 and again by 25.9 per cent in 1965. In absolute terms, this meant an increase from $323 million in 1963 to $519 million in 1965. This was, sufficient to make good entrepot trade losses, taking the two years together. But the year 1964 was a particularly bad year; the decline in entrepot earnings was much greater than the increase in British military expenditure. Accordingly, the Gross Domestic Product for that year showed the least increase of the decade, a mere 0.5 per cent. But for increased British military expenditure, there would have been a substantial decline. The Gross Domestic Product for the two years we were in Malaysia were: 1964 ... $2,700 million 1965 ... $3,043 million Despite Indonesian confrontation, total investments continued to expand and at a brisk rate too. Gross capital formation increased at an annual rate of 20.6 per cent, running at $421 million and $476 million in 1964 and 1965 respectively. The manufacturing industry forged ahead in spite of poor trading conditions and deteriorating relations between the Singapore and Malaysian Governments. Manufacturing, construction and utilities showed a combined average of 16.2 per cent annual growth rate during Malaysia as compared with 14.7 per cent in pre-Malaysia. Employment in the manufacturing industry increased moderately, some 14.2 per cent a year. The increase of employment was about 10,000 over the two years, the 1965 census of manufactures giving a total of 46,020 employees for 1965 as against 35,256 two years earlier.”
“While the political arrangements in the new Federation were agreed to without difficulty, negotiations on financial arrangement and over the structure of the Common Market proved unexpectedly long and difficult, in the end, a compromise solution was found, literally at the eleventh hour in London. Our membership of the Malaysian Federation proved to be shortlived. The reasons for the sudden separation of Singapore from Malaysia are now past history, as are the events which led to it. So far as Singapore's economic development is concerned, hopes for a Malaysian Common Market had led to some anticipatory investment in 1963. However, the proclamation of the new Federation was greeted by unexpectedly strong reaction from the Soekarno regime of Indonesia. Confrontation was declared, and with it the curtailment of our entrepot trade with Indonesia. The national economic aggregates show the results of the factors I mentioned - Indonesian confrontation, the abortive Common Market with Malaysia, the financial arrangement between the States and Federal Government. Of the three periods of the last decade, the years we spent in Malaysia showed the lowest growth rates of Gross Domestic Product, a mere 6.5 per cent annual growth. This was due to the substantial decline of our entrepot trade by some 16.8 per cent as trade relations with Indonesia were severed. As a result, earnings on the entrepot trade declined from $441 million in 1963 to $306 million in 1965. Further, agriculture and fishing, never noted for rapid growth, showed a decline of 2.5 per cent. This was the result of night curfews imposed in Singapore waters for security reasons, which adversely affected the livelihood of fishermen.”
“The following figures of employment in the manufacturing industries as recorded in the annual census of manufactures show that the manufacturing sector was virtually stagnant between 1959 and 1962 and registered only a small increase in 1963. The employment figures are as follows: 1960 - 26,697 1961 - 26,837 1962 - 27,924 1963 - 35,256 Employment in pioneer industries, the first of which went into production in 1961, increased from 241 workers to 2,654 at the end of 1963. It was not easy to get started. The domestic market was small, as it still is today. Wages were then high compared to other Asian countries such as Hong Kong, Taiwan and South Korea. On top of all this, a near-endemic situation of management-labour conflict arose out of the show-down between the democratic and pro-Communist forces. Despite these handicaps, the Government proceeded with its development plans with a confidence few believed justified. In September 1961 earth-moving operations commenced when the first bulldozer moved into Jurong. By the end of 1962, 1,100 acres of prepared land had been levelled by cutting down hills and filling swamps. By the end of 1963, 1,800 acres had been prepared. Twenty-four million cubic yards had been moved in the process. Jurong, as of December 1963, had only two factories in production to show for this mountain of labour. They were the National Iron and Steel Mills and Pelican Textiles. Between then, they employed 90 workers. Economic Development, 1963-65 Singapore's entry into the Federation of Malaysia in September, 1963 was preceded by many months of negotiations.”
“The finance to pay for this had to be obtained by civil service pay cuts and tax increases, measures which did not increase the Government's popularity rating. During this period, the Gross Domestic Product increased from $1,968 million to $2,684 million. This represented a compound growth rate of 8.1 per cent a year. As a result of the Housing Board building programme, the construction industry prospered in the second half of the period, generating the following net output: 1959 -- $40.0 million 1960 -- $41.9 million 1961 -- $56.0 million 1962 -- $70.0 million 1963 -- $94.7 million The construction industry during this period increased at 24.0 per cent a year. The impetus came mainly from Government expenditure in the housing field. Increase of public sector investment during this period was at a compound rate of 27.5 per cent. The present rate, between 1965-69, has been 10.5 per cent growth rate in the public sector, a more moderate pace. The political in-fighting between the Communist United Front (C.U.F.) and the P.A.P. resulted in a large number of strikes called by the C.U.F. as part of its attempt to coerce the Government. The number of man-days lost in strikes was as follows: 1960 -- 152,005 1961 -- 410,891 1962 -- 164,936 1963 -- 388,219 The defeat of the Communist United Front in the Referendum of August 1962, followed by subsequent security action against them, restored a measure of industrial peace. In 1964, strikes accounted for loss of only 35,908 man-days. In 1969, the figure was 8,512. During a period when unemployment was heavy, trade union irresponsibility on such a massive scale was hardly conducive to industrial investment.”
“They joined issue on the Government's policy to negotiate a merger with Malaya to form Malaysia. All this is familiar history. But events of such traumatic impact inevitably leave their mark on the economy, as I shall shortly demonstrate. Meanwhile, despite the political preoccupation of the Government, the Economic Development Board was established in August 1961. It was charged with the duty of promoting the growth of industries in Singapore. At the same time, the former Singapore Improvement Trust was absorbed in a more effective agency named the Housing and Development Board. While the creation of new industries, by its nature requiring a substantial lead time, could not show quick results, Government action in improving the social services produced swift and tangible benefits in the pre-Malaysia period. Immediate action was taken to extend and improve the education system. School enrolment both at primary and secondary stages increased rapidly. Primary school enrolment increased from 266,625 to 336,163 between 1959 and 1963; secondary school enrolment increased from 48,723 to 84,425. The Housing and Development Board suffered some initial troubles under the former mayor of Singapore. After his replacement, the Board soon got into stride and showed dramatic progress. The number of flats and shops built each year was as follows: 1959 -- 1,611 1960 -- 1,682 1961 -- 7,320 1962 -- 12,230 1963 -- 10,085 Because industries took a long time in getting started and because there was little expansion in entrepot trade earnings during this period - the growth rate was a mere 4.5 per cent per year - the substantial housing programme launched by the Housing Board undoubtedly helped to sustain economic expansion during this period.”
“I will now trace in outline the development of the economy during the decade. Singapore's economic development can be conveniently grouped in three periods - pre-Malaysia, during Malaysia, and post-Malaysia. Since the most relevant economic statistics are given in terms of calendar years, the three phases of Singapore's economic development may be considered in the calendar year periods as follows: (i) 1959-63 (ii) 1964-65 (iii) 1966-69 It should be remembered, however, that economic trends sometimes transcend two or more periods. This results from anticipation of future development, as for instance, in the years 1962 to 1963, when several industrial projects were started in Singapore in anticipation of a Common Market in Malaysia. Further, the lead time needed to see a project off the ground - the interval between the moment a decision is taken and the completion of the project - often occupies a period of several years for large scale projects. Economic Development, 1959-63 The pre-Malaysia period was dominated by political events. Several of the more discerning observers knew in 1959 when the general election was won by the People's Action Party that behind the anti-colonial solidarity, was a deep ideological division between a Democratic Socialist faction and a pro-Communist faction. It was a matter of time before the two groups were forced to bring their differences into the open as they contended for political supremacy. The policy of the Government, which consisted of democratic socialists, was determined at that time more by the immediate political necessities than by long-term needs of economic development. The pro-Communists broke off from the P.A.P. and their United Front forces fought the P.A.P. in the Anson by-election in July of 1961.”
“0 Social Statistics Population million 1.58 2.02 at mid-year Annual Births thousand 62.5 44.7 Infantile Motality Rate Per 36.0 21.0 thousand Rate of Annual Population % 4.1% 1.5% Increase School Enrolment thousand 305 511 Expenditure on Education $million 63 175 (including capital expenditure) Daily Newspaper Copies 119,970 311,500 circulation No. of Housing Board flats No. in 23,019 106,418 and shops existence year-end Armed Robbery and cases 3,125 2,010 Housebreaking In the nature of things, statistical information, which deals with social and economic phenomena susceptible to enumeration, does not and cannot describe the qualitative and non-numerical improvements that have taken place in our society. There is greater social cohesion, more social discipline and self-reliance, pride in performance and achievement in the face of adversity. These are the intangible yet supremely important factors for progress of any society. By our common endeavours and achievements, we are slowly acquiring an identity of purpose and in this way building up a sense of belonging and nationhood. The rootless, migrant and parvenu values, where each is out for himself, attitudes so prevalent at the beginning of the last decade, are giving way to more positive group values of a self-reliant people, determined to build an enduring future for themselves in this part of the world. In the final analysis, it is on the firm framework of these values rather than on steel and concrete structures that economic progress is to be achieved and sustained. Max Weber was the first, but he will not be the last, to detect in particular societies the close interaction between ethical systems and the modernising processes which enables economic transformation.”
“Housing Board flats and shops increased from - 23,019 to 106,418. Happily, increase in crime and violence, a contemporary phenomenon in many cities in both the developed and under-developed world, did not afflict us. Armed robbery and housebreaking cases numbered 3,125 in 1959 compared with a reduced figure of 2,010 in 1969. For the convenience of Members, as well as for the record, I am circulating statistical tables* which set out in compact form the facts, a narrative of which would be long, tedious and possibly incomprehensible. Five of these (* See Appendix, cols. 515-54) Appendix to Annual Budget Statement (col. 472) (Cols 0515-0554) tables relate to matters I raise in this statement. The others cover the field in much greater detail and provide the background of data on which I base my main observations. The first table summarises the points of comparision I have been making. TABLE 1 BASIC ECONOMIC AND SOCIAL STATISTICS, 1959 AND 1969 Unit 1959 1969 National Economic Aggregates Gross Domestic Product $million $ 1,968 $ 4,833 Gross Domestic Capital $million 150 919 Formation Trade and Transportation Total imports and exports $million 7,349 10,984 Cargo handled million 14.2 3737 freight tons No. of ships cleared No. 9,584 16,531 Pasenger arrivals, sea and thousand 163 546 air Industrial Sector Manufacturing, value added $million 170 827 Construction $million 40 208 Utilities $million 46 120 Employment in No. 25,199 87,128 Manufacturing Industry Employment in Pioneer No. Nil 35,000 Industries Labour ministry returns of No. 166,747 239,452 Workmen, Clerks and Shop Assistants Comercial Bank Deposits $million 816 2,745 Central Provident Fund $million 120 632 Official Overseas Assets $million 336 2,445 Consumer Price Index mid-1960 - 110.9 =100.”
“Of these latter, no less than 35,000 were employed in pioneer industries in 1969. There were, of course, no pioneer industries in 1959. Entrepot trade also seems to have flourished during the decade though, as we shall see later, there were many ups and downs. There was an increase in total cargo handled at the Port of Singapore from 14.2 million freight tons in 1959 to 37.7 million freight tons in 1969. The number of ships increased from 9,584 to 16,531. Passenger arrivals at the beginning of the decade totalled a mere 163,000 and increased to 546,000. Economic growth of these proportions must naturally be reflected in the financial structure of the Republic. There was a substantial expansion during the decade in the commercial bank deposits, from $816 million to no less than $2,745 million. The Central Provident Fund balances standing to the credit of members increased from $120 million to $632 million. Government revenue benefited from expansion, increasing in a decade from a paltry $275 million to $934 million. Despite expansion of output, volume of trade and total investment, as well as money supply, there was a marked absence of inflationary pressure. The consumer price index as at mid-1969 stood at 110.9 with mid-1960 providing the base-mark of 100.0. In a world where inflation plagues many countries, both rich and poor, an average annual increase of one per cent in consumer prices over a decade is not a common experience. Economic growth has had beneficial effects on social conditions. One of the results of improved standards of living has been a substantial decline in the rate of population growth. Infantile mortality rates also declined. School enrolment and expenditure on education increased substantially. Newspaper circulation nearly trebled.”
“In other words, it was largely the result of greater human effort. Associated with growth of the G.D.P. has been a much faster rate of capital investment in the Republic. The accounting aggregate representing capital investment - Gross Domestic Capital Formation in the terminology recommended by statisticians of the United Nations increased from $150 million in 1959 to $919 million in 1969. Total investment increased at more than twice the rate of increase of the domestic product, a compound annual rate of 19.8 per cent during the decade. In 1959, total investment amounted to 7.6 per cent of the G.D.P. and this increased to 19.0 per cent ten years later. Ploughing back an increasing part of our domestic output is essential to sustain our growth momentum and we should continue to increase this percentage. We are still a long way behind Japan which invests more than 30 per cent of its income. Since much of investment was in industrial machinery and equipment, industrial output naturally expanded. Industrial output is sometimes defined as the output of the manufacturing, construction and utilities sectors. Their combined output increased, as one would expect, at a faster rate than the G.D.P. The compound rate of growth for 1959-1969 was 16.2 per cent as against 9.4 per cent, the overall economic growth rate. Manufacturing industries grew at 17.1 per cent a year, construction at 17.9 per cent and public utilities at 10.2 per cent. In value terms, the industrial sector's contribution to the G.D.P. rose from $256 million in 1959 to $1,154 million in 1969. Employment in the manufacturing sector as determined in the annual census of manufactures covering establishments employing ten workers or more, increased from 25,199 to 87,128.”
“Singapore's Gross Domestic Product in 1959 was $1,968 million. The Gross Domestic Product is the value of goods and services produced within the geographical area of the Republic. They include the value of foodstuffs produced by our farmers, the earnings of our traders and shipowners on the entrepot trade, the value added in Singapore in the course of manufacturing operations, the earnings of retail trade, the hotel business, and other services, the value of services provided by the Singapore Government, British military expenditure, and the value of construction of new roads, houses, factories, power-stations and so on. The Gross Domestic Product is a close relative of the G.N.P., or Gross National Product, and differs from it only in that the G.N.P, includes earnings of Singapore citizens from overseas sources and excludes earnings in Singapore accruing to persons and corporations abroad. In this account, I shall use the Gross Domestic Product rather than the Gross National Product since calculation of the latter is subject to greater uncertainty and error. By 1969, the G.D.P. had increased from $1,968. million by nearly 2½ times to $4,833 million. This represents a compound growth rate through the decade of 9.4 per cent a year. We have therefore surpassed the United Nations target for the Decade of Development of 5 per cent annual growth. At the same time, our performance was well below that of some other economies such as those of Japan, South Korea in recent years, and Hong Kong. The doubling of the G.D.P. during the l960s was not due to discoveries of natural resources as these are virtually absent. It was the result of the growth of trade, on the one hand, and the growth of industry, on the other, with tourist development providing a small but welcome increment.”
“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1970 to 31st March, 1971. This being the first Budget Statement of the new decade, it seems appropriate on this occasion to do a review of our economic performance during the past decade. This was the decade which the United Nations christened "The Decade of Development". For us in Singapore, it was a turbulent decade during which momentous changes took place. Singapore entered the 1960s as a British colony with self-governing powers in domestic affairs. We later achieved independence as part of independent Malaysia, only to be expelled from the Federation after two years. On August 9th, 1965, the independent Republic of Singapore was created. I propose to confine my review of the decade to Singapore's economic performance. I was engaged for most of the decade in a Ministry which was charged with the responsibility for economic development and planning in Singapore. It is not altogether possible for me to escape bias, either in treatment or emphasis, in this account of the Republic's economic growth. No doubt some future economic historian will cover the same ground and will probably see events in a somewhat different light. He will also treat the subject more exhaustively than is possible in a Budget address. I propose to conduct this review of Singapore's economic development in the 1960s in two ways. The first is to compare the positions as in 1959 and 1969, taking two snapshot pictures, so to speak, of the main economic terrain. Secondly, I will try to trace developments through the different phases of the decade, in a kind of motion picture presentation, if I may be permitted to extend the analogy. First, the snapshot pictures.”
“Members will, without question, accept the proposition that we should be dependent as little as possible on outside supplies for so vital a product as water. To do otherwise would be to give dangerous hostages to fortune. If they accept this proposition, Members must also accept the inevitable consequences that flow from it. The setting up of water supply and storage facilities on the island itself is more costly than getting them from across the Straits of Johore. If this were not the case, our water engineers in past decades would have been doing what we are doing now. Already the cost of producing and distributing water to domestic households exceeds the rate of 80 cents per 1,000 gallons which they are paying. With the completion of the new schemes I have mentioned and others, the cost will increase. This follows logically. Water engineers will begin with the most economical projects first, which, in the case of the island of Singapore, is the Seletar project. Then they go on to more expensive and less economical means of collecting and storing water. This is the price we have to pay for not giving unnecessary hostages to fortune. The present increase in water rates is to pay for sewerage services which, in the past, were subsidised by the general taxpayer. So to the question asked by the Member for Punggol to which he wants an unequivocal answer -"Will there be further increases in water rates?" - I say, yes, there will be further increases in the water rates. So those who grumble at the present increase in water rates should bear in mind the deeper and more serious issues which I have outlined. 6.24 p.m.”
“This is the entire question of our water supplies in relation to our past, present and future needs and, more particularly, to take into account our dependence on external sources for our water supplies. Until the Government took measures to increase the supply and storage capacity on the island of Singapore itself, we were dependent on our supplies and storage of water on Johore for nearly all of our water requirements. Seletar Reservoir was completed last year, but until then Singapore produced only 18 million gallons a day out of the 102 million gallons a day consumed. Therefore, more than 82 per cent of our water consumption was supplied from Johore. With the completion of the Seletar scheme, we are now able to supply 40 per cent of our requirements. This is an improvement but it is not enough. Before the completion of Seletar Reservoir, storage capacity in Singapore was enough for only two weeks' supply. With Seletar Reservoir, we now have just over two months' supply. This is an improvement but again it is not adequate. So the Government and its agency, the Public Utilities Board, are proceeding with further schemes to increase storage capacity and to get more sources of supply of water from the island itself. The P.U.B. has worked out several schemes in this respect. They are now in the process of engaging consultants to design and supervise the construction of two water supply and storage schemes: one in the Kranji area and the other in the Ulu Pandan area. Construction will probably start next year and will be completed in 1974. By then we would increase significantly the percentage of local requirements, which can be met from supplies on the island itself. Hon.”