Lim Kim San
Singapore
“Mr Speaker, Sir, the Public Utilities Board's investigation shows that the residents of Pulau Ubin are unwilling to pay higher prices due to higher operating costs, thereby causing the contractor to cease operations. It was explained to the hon.”
“Sir, I understand the Member's point, but I hope he realises that six months after serving notice, the pigs will still be defecating freely which will continue to contaminate our water.”
“Sir, if anyone should get sick from coming into contact with contaminated water, I hope they will accept sympathy from the Member for Jurong. But we cannot evaluate the danger to human life in terms of dollars and cents. The farmers have known for several years now that pig-rearing will have to be phased out of the catchment areas.”
“Sir, all I can say is that we are still looking into the feasibility of siting a coal-fired station on one of the islands to reduce the pollution problem. But no definite decision has yet been made. We have several offers to do a feasibility study on it, and we are looking closely into the matter. 5.45 p.m.”
“Merit Scholar- Merit Courses ships Bursaries Medicine/ Dentistry 44 41 Engineering 28 22 Architecture/ Building/ Estate Management 6 18 Accountancy/ Business Administration 9 14 Arts/Social Science/Law 32 40 Science (includes Pharmacy) 82 102 ___ ___ 201 237 === === Sir, I believe the hon.”
“Mr Speaker, Sir, air pollution is being monitored daily by the Anti- Pollution Unit, and we find that the air pollution in industrial estates and the urban areas is normally higher than in the residential or rural areas.”
The complete record
Every one of 1,111 lines we hold for Lim Kim San, in date order, each linked to its source. Free to read, in full, without an account. Page 19 of 23.
“Mr Speaker, as I said, the value of our dollar will be the same as it is now 2s. 4d., or its equivalent in gold. I believe the Malaysians have also pegged their new currency to the equivalent of 2s. 4d, or, as they put it in so many grammes of gold. Therefore, it is likely that the new Malaysian dollar and our dollar - that is, if we do not come to an agreement - would have the same value and probably agreement could be reached later on on what we call "customary tender"; that is, their notes would be acceptable here and our notes would be acceptable there and the value would be the same.”
“Mr Speaker, Sir, I do not share the lack of confidence of the hon. Member for Choa Chu Kang in the pound sterling. Anyway, there is nothing that we can do until June 1967. What I am saying is that the value of our dollar will be equal to 2s. 4d, or its equivalent in gold, which is .2 something gramme of fine gold. Mr Lim Cheng Lock rose -”
“I never said that our currency would be backed 100 per cent by sterling. I said our currency will have 100 per cent backing.”
“On a point of clarification, Sir. Mr Tang See Chim resumed his seat.”
“Mr Speaker, Sir, they will be in the White Paper - the draft agreement - which is not drafted by the I.M.F. There is no agreement. It is just a draft working agreement. They will all be published in the White Paper which I hope will come here in time from the Printers this afternoon. Mr Tang See Chim: Mr Speaker, Sir, we have been told by the Finance Minister that our currency will be backed 100 per cent by sterling. In view of the frequent crises of the pound, however, would the Government -”
“Mr Speaker, I do not think I can comment on what the hon. Member has said. What he meant was that the Malaysian Minister of Finance wants to do Singapore in. I cannot comment on that.”
“The Prime Minister, having listened to what a Finance Minister could do with the flexibility of a Central Bank, has put his foot down and says, "This is our final resolve. There is going to be no Central Bank."”
“Mr Speaker, Sir, there is no reason why we should have one. Our feeling is this: looking around us we have seen that Central Banking financing in developing countries is a prelude to an easy way out of a difficult situation, and it has led to disaster. One must first understand what is the objective of setting up a Central Bank; whether it is for prestige so that you can go to an international conference and say, "Look, I have got a Central Bank and this is the Governor of my Central Bank." Or do you want it to serve a useful purpose? A Central Bank, as far as I understand it, can only be effective if there is what you call a highly developed money market. And I, for one, feel that in most developing countries there is not a highly developed money market; there is an absence of a money market entirely. Central Banks are set up, first, probably for prestige, and second, for the flexibility which allows Finance Ministers to juggle with expenditure when they are engaged in deficit financing. In Singapore, where we really have to work hard and discipline ourselves, we must not be put to this temptation - for me or any future Finance Minister. Therefore, as far as we are concerned, I think the control of banking and the control of watching over foreign exchange can be supervised by other means than a Central Bank. One of the most important functions of a Central Bank in a highly developed country is to influence the amount of money available through what we call open market operations. In most of the developing countries, it is not possible to do that simply because there is no money market. So for our purpose I do not think it would be advisable to set up a Central Bank. Anyway, that is our thought at the moment and unless and until some -”
“Yes, and how much you print. If you have a backing of $100 million, and you print $1,000 million, then obviously the value of the currency goes down. It is a simple thing, like the running of a household. If you are earning less than what you spend, then, of course, you get into difficulties. As for Singapore, we will never allow the Finance Minister of Singapore to take the easy way out; that is, whenever he cannot balance his budget, he goes to the Central Bank and says, "I give you an I.O.U.," and the Central Bank just churns out notes! No, I do not think that is a good way. And we have seen many new developing countries where that is done. It is a very simple thing to do. It becomes habit forming and, in the end, nothing is left. You will have notes which cost more than what it costs to print. We are not going in for that.”
“Mr Speaker, Sir, I say that the Barisan Sosialis are always out to do a disservice not only to us but to the people of Singapore. Hence this white lie which they put up - that because Singapore has got no natural resources, the Singapore dollar will be weaker than the Malaysian dollar. That is utter rot and utter nonsense. We have seen many countries with rich natural resources. But what happens to their currency? It is just like "banana notes" - I need not mention the country. But here we are going on a hundred per cent backed currency which means that no matter what happens, even if we are burnt down, if we are looted and all that, our assets are outside. Anyone who holds a Singapore dollar can redeem it. We have got the backing for it. It is not what you have that counts. It is what you earn and how you manage your currency.”
“No, Sir. There is a basic assumption on which we start. We have made certain proposals which, in our view, would ensure that our assets would never be jeopardised. But I would come to an agreement if the Malaysian Government or the Malaysian Finance Minister has got any other alternative proposals which would ensure the safety of our assets.”
“" Therefore, it was apparent from the quotations of records of these minutes of the meetings that the officials of both sides were never agreed on this draft agreement at all, nor did they recommend it and we reject it.”
“Mr Speaker, Sir, if the hon. Member had been paying close attention to my statement, he would not have asked that question. But for his benefit, may I quote again the relevant portions to show that the officials never recommended or never agreed on this draft agreement? If you will bear with me, Mr Speaker, Sir, I will look for the relevant portion. Here it is and I quote, Mr Speaker, Sir: 'The Singapore representatives pointed out that the clauses which had been agreed to at the past seven meetings at the official level should not be regarded as final and irreversible. They maintained that the officials of both Governments reserved the right to review and change the draft Agreement in whatever way necessary in the light of the Agreement as a whole.' Now, there is a further quotation here, and I will continue with this quotation, Mr Speaker, Sir: 'It was noted that both the Malaysian and Singapore Governments reserved the right to decide in the final analysis, whether this Clause or any other clauses should be included in the Agreement.' Tan Sri Ismail, if you will remember, Mr Speaker, Sir, chaired the meetings, and this is a record of the meeting made by Bank Negara Malaysia, and I quote: 'Tan Sri Ismail suggested that these final drafts should be transmitted to the respective Governments for consideration. The views and reactions of both the Governments would be discussed at the next meeting.' This is a record of the meeting which was held on the 5th of July, 1966. This happened to be the last meeting and there was no meeting called in spite of what is recorded here - that "the views and reactions of both the Governments would be discussed at the next meeting.”
“Mr Speaker, Sir, I am not aware of any differences in banking and financial policy so far. That is the reason why I have not touched on it at all in the White Paper. I think hon. Members are aware that the Bank Negara Malaysia has a branch in Singapore and it is still looking after the banking and financial policy here. At the very outset, I felt that both currency and banking is the strongest tie that is holding us together. And I was hoping that as long as we could maintain this tie, it would be easier to have economic co-operation elsewhere. For that reason, we never told the Bank Negara Malaysia to withdraw its branch here. There have been no differences at all as far as I am aware in the banking, financial or monetary policy. I do not know, Mr Speaker, Sir, but maybe in future, Malaysia may have a different financial policy. From my statement today, you will realise that we are going on with a hundred per cent backed currency, whereas the Malaysian Government, because of certain amendments to the Currency Regulations, will empower the Minister of Finance to vary the backing from a hundred to 70 per cent. That is the beginning of differences in monetary policy already. But in the past, as far as I am aware, there has been no difference at all.”
“Mr Speaker, Sir, I would be a superman if I could prevent the Malaysian Minister of Finance from blaming me or anybody for anything which we may or may not have done. As regards the accusation which appeared in headlines in the Berita Harian that Singapore is in the wrong, that Singapore turned down the agreement after the officials had agreed after negotiations, I think in my statement I have made it very clear that the officials never agreed on any draft agreement which they worked on, that the draft agreements were actually draft agreements and that in the event of any doubt arising, the two parties should get together. Let me explain, Mr Speaker, Sir, that the agreement we are entering into is a unique agreement where two sovereign nations are trying to find a formula to work a common currency and banking arrangement. The World Bank admitted that this is unique. Therefore, no one knows the formula. When all the officials meet, it is a question of exploring. That is why I said that proposals and counter-proposals were made. They were exploring all the different devices in which they could accommodate one another. Never was there a final agreement reached on the proposals and counter-proposals.”
“Mr Speaker, Sir, it is not so much over the control of the reserves. The two officials had met and had worked out different ways in which each country can have control over its own reserves. The disagreement is over the question of ownership of the reserves. The crux of the problem is the suggestion made by Bank Negara Malaysia as to how we can transfer our property to Bank Negara Malaysia in Singapore, since Bank Negara Malaysia in Singapore has no legal entity. At the same time, it also suggested that the value of the property could be credited to the account of Bank Negara Malaysia in Singapore, while the title should remain with Bank Negara Malaysia, and we were asked to transfer ownership of all our assets to Bank Negara Malaysia. Are we willing to transfer our currency assets to Bank Negara Malaysia - a statutory body created by the Malaysian Government and over which it has full jurisdiction'? That is the crux of the problem. We are unwilling to do that. Therefore, our suggestion is that we either place it with a third party - the I.M.F., the Bank of England, or any party mutually acceptable - or we form the Deputy Governor into a corporation to hold our currency reserves in the same way as Bank Negara Malaysia holds and owns the assets of the currency reserves of the Malaysian Government. Can I further clarify? When I say Deputy Governor, I mean Deputy Governor for Singapore.”
“The reserves of the Currency Board are. Mr Speaker, Sir, these reserves of about $1,600 million, or £200 million sterling, are being held by the Crown Agents who are agents of the Currency Board. The control and management of the reserves is by the Currency Board. They are held in London by the Crown Agents.”
“Yes, I will, as best I can. Under the present system of the Currency Board, it is estimated that Singapore's share of the assets totalling about $1,600 million now would be round about $400 million - that is about 24 per cent. But whether it will be much more than this will depend upon the redemption of the old currency when the new currency comes out. My own estimate is that it is much more than a quarter, which is estimated by the Currency Board. Sir, lastly, what I can say now is that our estimated share is about $400 million and this will form the basis of reserves for our new currency. Madam Chan Choy Siong (Delta)(In Mandarin): Mr Speaker, Sir, according to the answer made by the Minister for Finance to the Member for Changi, he said that the reserves that we have come to about $1,600 million. I would like to ask him where these reserves are now being held and who is holding them?”
“290299 gramme of fine gold being held by the Board. I am confident that as long as we keep to the mundane policies of a Currency Board and avoid the temptations of the acrobatic heights of high finance covered by the Central Bank credit creation, Singapore, over the next five years, will demonstrate its economic strength and resilience, and continue as a strong financial centre and haven of capital in this part of South-east Asia. Hon. Members: Hear, hear! 3.45 p.m.”
“In other words, the luxury of maintaining temporary full employment in an election year, with which some governments have pampered their population by following inflationary policies, low interest rates and easy credits in order to expand consumption and expand employment and temporarily expand imports at the risk of running down their foreign exchange reserves, is not one which will be open to the Singapore Government. Whether it is election year, or any other year, if there is a fall in the dollars we earn either by production and sale of our goods and services, or by brokerage on trade, then the amount of foreign exchange earned will immediately go down, the amount of money available for expenditure will also go down, demands on goods and services will go down and unemployment must go up. This is a rigorous regime but we must accept this austere and severe system of adjusting our consumption to our earnings at all times if we are to maintain our pre-eminence as a great trading centre. Whatever else may be in doubt, the value of our currency and the certainty of its maintaining that value at which prices are being quoted all over the world, can never be placed in jeopardy. So unless we reach a compromise agreement with Malaysia before the 12th of June, 1967, we must constitute our Currency Board, for the old Currency Board consisting of representatives of the Governments of Singapore, Malaysia and Brunei will be dissolved. On the new Currency Board, there will be adequate representation for our bankers, both those representing local banks and banks incorporated overseas. So it shall always be known and manifestly known by banking circles throughout the world that for every Singapore dollar in circulation, there is 2s 4d, worth of foreign exchange, or 0.”
“This, Mr Speaker, Sir, means that the per capital national income of Singapore, after stagnating in 1964, is again on an upward trend. These indicators reflect an expanding economy at a good rate of growth which can be maintained and even accelerated, given international confidence in our currency and economy, prudent use of resources and hard work on our part. After careful consideration, the Government has decided to continue with a currency board which can issue notes only with full 100 per cent backing in reserves. We have decided to abjure some of the comforts of Central Banking finance which offers flexibility and temporary relief for financial stringency but which often leads to chronic monetary difficulties. No developing country has as yet demonstrated that it can successfully engage in Central Bank credit creation. Calamitous consequences have invariably followed when a developing country indulges in borrowing currency notes printed by its Central Bank. For Singapore, whose economy is open and faces competition at every point from the rest of the world, the most rigorous monetary policies have to be followed. This calls for the tightest economic and social discipline from the people of Singapore. The 100 per cent backed currency system that we will be operating means that if Singapore wishes to spend more, then we must first earn more. Productivity of labour, efficiency of management and the strength of our economic infrastructure have to be maintained and improved continuously. There is no alternative for Singapore.”
“Prospects are good that the Bank itself will be prepared to lend Singapore about one-third of the foreign exchange requirements. The World Bank has already agreed to lend $45 million to the Port of Singapore Authority. Another one-third can be made available through bilateral commercial credits. A loan to finance the construction of the new Jurong Power Station has been negotiated with a Japanese supplier. The remaining amount is therefore a relatively minor sum which can be met by Singapore itself. But even if Singapore borrows the entire shortfall of about $350 million in the next five years to finance a development programme estimated at $1,750 million, the external debt service will amount to only slightly more than 2 per cent of estimated current account earnings in 1970, the last year of the Second Five-Year Plan. In recent years domestic exports have been rising. For the annual period ending June 1966, domestic exports amounted to $1,090 million, or an increase of 24 per cent over the same period in 1965. The volume of trade for the 12 months ending June 1966 showed an increase of $569 million, or just over 9 per cent over the corresponding period of the previous year. Bank loans and advances, always good economic indicators, rose from $1,011 million at the end of June last year to $1,054 million at the end of June this year, reflecting an increase of 4.3 per cent. Revenue from liquor, tobacco and petroleum, the major sources of public finance, have also increased by about 12.24 per cent this year. Finally, Singapore's gross domestic product in 1965 is estimated at $3,023 million, which is an increase of $213 million, or 8 per cent over the 1964 output.”
“Under the Currency Board system it is not possible for a country to spend a dollar more than it earns abroad. As a trading community, Singapore cannot afford to have a currency that is less than this. If our word is to be as good as our bond, then Singapore's currency must always remain a freely convertible one, that is a hard currency. We, therefore, propose to continue with the Currency Board system. In other words, Sir, the new currency that Singapore will issue from June next year will at all times be backed 100 per cent by gold or foreign exchange assets, and will remain fully convertible. Singapore will begin its currency board issue on a sound financial basis. Compared to the end of 1965, official reserves, not counting foreign assets held by commercial banks and the private sector, stand at over $1,021 million. This is 10 per cent above the level of official reserves at the end of last year. This amount of official reserves is adequate to finance retained imports into Singapore for 10 months. This liquid position compares favourably with the most solvent nations of the world. Another strong feature is that Singapore's external debt position at the level of only $58 million is one of the lowest in the world. This amount of external debt represents only 0.5 per cent of current account earnings in recent years. The long-term outlook is equally sound. Soon after the separation of Singapore from Malaysia, the World Bank sent a mission to assess the economic and financial position of Singapore. In the estimation of the World Bank, the foreign exchange gap over the next five years until 1970 will amount to only $350 million. This gap can be easily met.”
“Where part of the money income is spent on imports, then there will be pressure on the country's foreign exchange reserves. For unless exports keep pace with the increase in imports, the foreign exchange reserves will fall, if expenditure on imports for consumption continues to exceed earnings from exports, it will be necessary for the government to ration the use of foreign exchange. The holder of a currency note then loses his right to automatic conversion on demand into foreign currency. He applies for permission to buy foreign currencies. This is known as "exchange control". Unfortunately, Mr Speaker, Sir, exchange control has had to be imposed in almost all the under-developed countries which have emerged into independence since World War II and which have established their own Central Banks. For our trading economy it is imperative that our money must remain convertible to enable our traders to import almost anything from anywhere either for resale or for our own consumption. There is no rationing of foreign exchange. Obviously, this makes trading much easier and is of great advantage to our entrepot economy. We must continue this practice. It is true, Mr Speaker, Sir, that this system was established by the colonial administration. The Currency Board system is not necessarily defective just because a colonial administration used it. Many newly independent countries have gone on to the central banking system because the Currency Board system prevented them from spending money they were not earning, as no notes could be issued without 100 per cent backing in reserves. In fact, if we look at the matter dispassionately, the Currency Board system has contributed substantially to the financial stability of the present dollar.”
“As people's incomes contract, they buy less and with reduced expenditure, imports also go down. Similarly, when earnings from exports and services exceed imports in any given period, the tendency is for increasing incomes to lead to increasing expenditure and thus to increasing imports. The third point is that, apart from overseas loans and grants, the Government must balance its budget, both its recurrent and capital development projects. Total Government expenditure must be balanced by Government revenue and borrowing from the public. Where the Government has set aside reserves, say, in the Development or other Funds, these reserves can be run down but in the long term, income must balance expenditure. This is not always the case in other countries. Leaving aside loans and grants from overseas countries, governments can borrow from their own Central Bank. This is a euphemism for printing of currency notes by the Central Bank and handing them over to the government to spend. Such Central Bank loans to the government are sometimes called "credit creation". It is the result of deficit financing, i.e., when government spends more than what it can collect in the form of taxes or borrow from the money market. "Credit creation" in this sense usually leads to more money in circulation chasing the same amount of goods and services leading to rising prices or inflation. In its acute form, it leads to a collapse of the exchange currency, as has happened in some countries. The initial result of government borrowing from the Central Bank (printing new currency notes against loan scripts signed by a government's finance minister) is that the money income of the nation is increased by the amount of the additional notes. As people spend this additional income, prices begin to rise.”
“I shall then explain why it is vital for Singapore's economy to continue with the Currency Board arrangements with 100 per cent backing in foreign exchange reserves for every dollar we issue. Our present currency system is based on what is called the sterling exchange standard. This means that the holder of a currency note has a right, guaranteed under the law, to exchange it for equivalent value in sterling. To ensure that this legal right of the currency holder can always be effectively met, the Board of Commissioners of Currency is required under the law, to maintain a 100 per cent backing of the note issue in sterling. This means that for every dollar in circulation, there is 2s. 4d, worth of assets held by the Crown Agents in London on behalf of the Currency Commissioners. This right of automatic convertibility of the dollar into sterling and through sterling to other currencies of the world is important. So long as sterling (or other overseas) assets are not less in value than the total value of note circulation, automatic convertibility is guaranteed both in law and in fact. This system has three important consequences on the economy. First, it allows foreign trade to be conducted without exchange control. From Singapore's point of view as an entrepot trading centre, the absence of exchange control is an essential feature of our monetary system. The second point of the automatic sterling exchange standard is that balance of payments equilibrium is achieved through variations in incomes. For instance, if imports for consumption exceed earnings from exports and services, this is adjusted automatically by the reduction of incomes working through the economy and reducing imports in subsequent periods.”
“' I will now further quote from the minutes of the eleventh and last meeting held on 5th July, 1966, also recorded by Bank Negara Malaysia with regard to the position of the working drafts of the officials: 'It was noted that both the Malaysian and Singapore Governments reserved the right to decide in the final analysis, whether this Clause or any other clauses should be included in the Agreement. * * * Tan Sri Ismail suggested that these final drafts should be transmitted to the respective Governments for consideration. The views and reactions of both the Governments would be discussed at the next meeting.' The drafts are working drafts, subject to further clarification by both sides when any point is in doubt. Nowhere was it stated that the working draft is the final draft. The House may be interested to hear the I.M.F.'s advice on the negotiations. The leader of the second I.M.F. mission in his remarks on the commencement of the negotiations stated that as technicians, the two I.M.F. officials found the Bank Negara's revised proposal as generally workable and sound. However, it was emphasised that there was the need for the two Governments to join issue on fundamental matters which have to be resolved during the course of the negotiations. He described the I.M.F.'s role as that of an honest broker and at no stage did it make any attempt to give policy advice to either Government. The I.M.F., Sir, never recommended acceptance of the so-called final working draft. Now, Mr Speaker, Sir, what are Singapore's plans for the future, if no agreement on a common currency can be reached? I think it is important for all of us to understand the present system on which our currency is based.”
“The Malaysian Government, however, could not agree that the assets be placed in a third party and considered that incorporating the Deputy Governor for Singapore as a corporation sole meant the creation of two Central Banks. We cannot agree, Mr Speaker, Sir, with this interpretation. Our Attorney-General's Chambers have advised us that this will, in no way, prejudice what we have already agreed to, and that is, Bank Negara Malaysia should have only one legal entity. It saddens me to report, Mr Speaker, Sir, that all the obvious advantages of a common currency, affirmed and reaffirmed by the Governments and people on both sides of the Causeway, have to be thrown away because our proposals to leave the assets with the I.M.F. or the Bank of England or in Singapore with the Deputy Governor as a corporation sole were all not acceptable and the Malaysian Government has no time to consider other alternatives because their printers in London were pressing them to decide on the printing of their new notes immediately. Here, Mr Speaker, I would now like to comment on the few points highlighted by Press reports of the replies to questions by the Minister of Finance, Malaysia, raised in the Malaysian Parliament. It was stated that the draft agreement has been agreed to by officials of the two countries. I will now quote from minutes of the meeting of officials held on 26th June, 1966, made by Bank Negara Malaysia: 'The Singapore representatives pointed out that the clauses which had been agreed to at the past seven meetings at the official level should not be regarded as final and irreversible. They maintained that the officials of both Governments reserved the right to review and change the draft Agreement in whatever way necessary in the light of the Agreement as a whole.”
“For if we were to agree to this, it follows that all our currency assets would have to be vested in Bank Negara Malaysia and that this statutory body created by the Malaysian Government would be appointing itself the trustee of our currency reserves and assets. In other words, Sir, we would have to hand over legal ownership of all our assets to a bank which was a statutory body of another country and entirely subject to its legislation and control. This does not give us the guarantee over the ownership and immediate access to our assets and foreign exchange reserves on the basis of which we began negotiations. We must ensure that the title to Singapore's assets, be it land or securities, should be vested in Singapore, in the same way that the title to the currency assets of Malaysia are vested in themselves Bank Negara Malaysia. Since the Central Bank of Malaysia, Singapore, has no legal entity, in reply we proposed that both our assets should be placed with the I.M.F. or the Bank of England or any other third party mutually acceptable as both our trustee or, alternatively, that the Deputy Governor for Singapore should be incorporated into a corporation sole and all currency assets of Singapore could be vested in it. The Malaysian Government have always agreed that our assets must belong to us and that they can have no claims on them. The deposit with a third party like the I.M.F. or the incorporation of the Deputy Governor as a corporation sole to hold the assets will ensure that no future government in Malaysia, if it decides to give orders to Bank Negara Malaysia contrary to the letter and spirit of the agreement between Singapore and Malaysia, will be in a position to jeopardise Singapore's assets.”
“Once it has been accepted that the agreement should guarantee both Governments of their ownership, management, control and immediate access to their respective assets at all times, formal negotiations began in earnest with the assistance of another team of two officials from the I.M.F. In all, Sir, 11 formal meetings were held between the 10th of June and the 5th of July, 1966, chaired by the Governor of Bank Negara Malaysia, Tan Sri Ismail. I would like here to pay tribute to all those who took part in the meetings, including the officials of the I.M.F., for the intense work they put into their difficult task to find a formula for two independent countries to co-operate on a common currency and banking system. Proposals and counter-proposals were made. Many difficulties were encountered and overcome, but even after the eleventh meeting held on 5th July, which happened to be the last of the series, there were still doubts as to how the ownership of the Singapore assets were to be resolved. This was indicated by a letter from the Governor of Bank Negara Malaysia dated 11th July, 1966, to the Permanent Secretary (Economic Development Division) who was leading the Singapore team. In it, he wanted clarification as to how the piece of land in Singapore, which is at present in the name of Bank Negara Malaysia, can be transferred to the Central Bank of Malaysia, Singapore. He proposed that while the value of this land would be credited to the account of the Central Bank of Malaysia, Singapore, the title should remain in the name of Bank Negara Malaysia. The implication of this formula was far-reaching.”
“The first, I quote: 'It is clear from the rest of the arguments put forward by the Singapore Minister for Finance that the Singapore Government is concerned chiefly with (a) the need to maintain its sovereign rights in any proposals for future currency arrangements and (b) the need to safeguard its interests in the matter of foreign exchange reserves and the manner in which these reserves are utilised. This concern is of course justified and any fears that the Singapore Government may have on serious breaches of its sovereignty or the deprivation of a major part of Singapore's external assets should be dispelled entirely.' The second quotation from this memorandum on the question of reserves is - I quote again: 'The Singapore Government is probably justified in claiming that the arrangements proposed by Bank Negara on the control and management of the Bank's foreign exchange reserves are unsatisfactory since these do not provide for a "hard core" of assets which would always belong to Singapore and to which the Singapore Government would have immediate access in the event of withdrawal from the agreement by either party. Bank Negara has therefore reviewed that aspect of its proposals relating to the control and management of its foreign exchange reserves and has come to the conclusion that it would be desirable to separate the respective reserves of the two countries at the outset of the proposed arrangements.' Mr Speaker, Sir, it is clear that the Malaysians took cognisance of our concern over the safety of our currency assets.”
“sent a preliminary mission to Singapore and Malaysia in December last year. The Mission reported on 1st March, 1966, and noted correctly Singapore's major pre-occupation for the safety of the foreign exchange reserves backing the currency. This is further emphasised by my letter of 21st March, 1966, addressed to the Governor of Bank Negara, Malaysia, in which I stated, and I quote: 'The Singapore Government wishes to be assured that in the event of subsequent withdrawal by either party from the proposed currency agreement, it should have immediate access to its share of the currency reserve.'. and it was also suggested in the same letter that another I.M.F. team be called to provide technical expertise. I quote again from the letter: 'We suggest that one of the major tasks to be set for the I.M.F., should both our Governments decide to call on them to provide technical expertise, is to devise a mutually satisfactory formula to ensure indisputable ownership and prompt division of reserves if and when a currency union, either in the form of a joint Central Bank or as envisaged under the Bank's present proposals, break up.' The reply from the Bank Negara Malaysia dated 20th April, 1966, states, and I quote again: 'We note, however, your concern over the control and management of Singapore's share of foreign exchange reserves in the currency and banking arrangements that we have proposed. We feel that this concern is wholly justified and we have accordingly reviewed this particular aspect of our proposals.' Enclosed with this letter, Mr Speaker, Sir, was also a memorandum setting out in detail the Bank Negara's revised proposals. I should like to quote from two parts of this memorandum.”
“Mr Speaker, Sir, the House is aware that just over a week ago, to be exact, on the 17th August, both the Singapore and Malaysian Governments announced that they could not reach agreement for a common currency and banking system. As a result, beginning from the 12th June, 1967, Singapore, Malaysia and Brunei will issue their own separate currencies. This House and the people of Singapore are entitled to have a full and frank account of the negotiations and the reasons for its breakdown. I am, therefore, taking the first opportunity available to inform the House of what has taken place. In an open society, Sir, it is not possible to suppress important Government-to-Government negotiations and the reasons for failure to reach an agreement. We are, therefore, releasing the exchange of correspondence and memoranda that have taken place between the two Governments on this subject in the form of a White Paper which will be placed before this House later this afternoon. Mr Speaker, Sir, it all began on the 8th November, 1965, when in my letter to the Malaysian Finance Minister, I suggested that in order to maintain public and international confidence in the economic future of Singapore and Malaysia, the issue of currency under the Currency Board system should continue until the time is more opportune to make a change. Alternatively, Singapore and Malaysia could establish a joint Central Bank. Both these proposals were not acceptable to the Malaysians. In the meanwhile, we agreed that the officials should meet to find another formula for a common currency and banking system. It was then decided to ask for technical assistance from the International Monetary Fund. And at the request of both countries, the I.M.F.”
“Mr Speaker, Sir, I will be making a statement later on to the House which will answer all the queries raised by the Member for River Valley.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. MERCHANT SHIPPING (AMENDMENT) BILL Order for Second Reading read. 3.45 p.m.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The purpose of this Bill is to provide statutory authority in accordance with clause (2) of Article 85 and clause (2) of Article 87 of the Constitution of Singapore for additional provision of expenditure in excess of the provision of expenditure authorised by the Supply Act, 1965. These additional sums have been scheduled as Supplementary Estimates and laid before Parliament. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Mr Speaker, Sir, I beg to move that Parliament doth agree with the Committee on the said resolutions. Question put, and agreed to. Resolutions accordingly agreed to. SUPPLEMENTARY SUPPLY BILL Order for Second and Third Readings read. 3.43 p.m.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported - "That the sum of $397,696.24 shall be supplied to the Government under the head of expenditure for the public services shown in the Statement of Excess for 1964 contained in Paper Cmd. 19 of 1965." "That the sum of $1,450,630 shall be supplied to the Government under the head of expenditure for the public services shown in the Second Supplementary Estimates of Expenditure for 1966 contained in Paper Cmd. 16 of 1966."”
“Mr Speaker, Sir, I have the President's recommendation to introduce this Bill. Mr Speaker, Sir, I beg to introduce a Bill intituled "An Act to implement the International Agreement for the establishment and operation of the Asian Development Bank and to enable Singapore to become a member thereof and for matters connected therewith." Bill read the First time. Second Reading”
“Mr Speaker, Sir, I have the President's recommendation to introduce a Bill intituled "An Act for making Supplementary Provision for the Public Service for the year 1966." Bill read the First time. Second Reading”
“Mr Speaker, Sir, I have the President's recommendation for the introduction of the Customs (Amendment No. 2) Bill, 1966. Mr Speaker, Sir, I beg to introduce a Bill intituled "An Act to amend the Customs Ordinance, 1960 (Ord. 44 of 1960)." Bill read the First time. Second Reading”
“Mr Speaker, Sir, I have the President's recommendation for the introduction of the Free Trade Zones Bill, 1966. Mr Speaker, Sir, I beg to introduce a Bill intituled "An Act to provide for the establishment of free trade zones in Singapore and for matters incidental thereto." Bill read the First time. Second Reading”
“Mr Speaker, Sir, I beg to move, That Parliament do now adjourn. Question proposed. PROPOSAL FOR INTEGRATED TAMIL SCHOOLS”
“ADJOURNMENT TO A DATE TO BE FIXED Resolved, "That at its rising this day Parliament do stand adjourned to a date to be fixed."-[Mr Lim Kim San] ADJOURNMENT MOTION”
“Resolved, That this Parliament, pursuant to section 3 of the Departmental Titles (Alteration) Ordinance (Chapter 55), resolves that the Schedule to the said Ordinance be amended by the deletion under the headings of "Old Title or Name of Office" and "New Title or Name of Office" respectively of the items shown in Part I of the following Schedule, and by the addition under the headings of "Old Title or Name of Office" and "New Title or Name of Office" respectively of the items shown in Part II of the following Schedule:- THE SCHEDULE Old Title or Name of Office. New Title or Name of Office. Part I. Commissioner of Customs and Comptroller of Customs Excise. Superintendent of Excise. Senior Customs Officer Assistant Superintendent of Customs Officer Excise. Probationer Assistant Customs Cadet Superintendent of Excise. Assistant Supervisor of Preventive Officer Customs. Deputy Commissioner of } Excise. } Senior Assistant } Comptroller of Customs. Assistant Comptroller of } Customs. Junior Customs Officer. Assistant Customs Officer Customs Officer. Higher Customs Officer. Assistant Customs Officer. Customs Officer Preventive Officer. Revenue Officer, Senior Grade Part II Comptroller of Customs. Comptroller of Customs and Excise Deputy Comptroller of Deputy Comptroller of Customs Customs. and Excise Assistant Comptroller of Assistant Comptroller of Customs. Customs and Excise Senior Superintendent of Senior Customs Officer. Customs and Excise Higher Customs Officer. Superintendent of Customs and Excise Customs Officer. Assistant Superintendent of Customs and Excise Higher Revenue Officer. Chief Customs Officer Revenue Officer, Senior Senior Customs Officer Grade. Revenue Officer. Customs Officer. 6.15 p.m.”
“Revenue Officer. Customs Officer. Sir, the Departmental Titles (Alteration) Ordinance provides for the substitution of new titles or names of offices where there has been a change of departmental titles, and section 3 of the Ordinance provides that Parliament may, by resolution, add to or amend the Schedule to the Ordinance. From time to time, the Schedule to the Ordinance has been updated so that powers and duties of the authorities named in legislation will be statutorily vested in authorities which have replaced them. During Malaysia, under the Modification of Laws (Customs) Order (L.N. 306) dated 8th September, 1964, certain changes were made to the departmental titles of officers of the Customs Department in Malaya. As the Customs Department in Singapore is closely associated with its counterpart across the Causeway, it was considered desirable for the Department to adopt similar titles to avoid confusion in nomenclature that might arise in the course of liaison between officers of the two Departments. The Singapore titles were accordingly revised in the Singapore Customs (Amendment) Act, 1966, and this motion, which is consequential, will update the Schedule to the Departmental Titles (Alteration) Ordinance (Chapter 55). Sir, I beg to move. Question put, and agreed to.”
“Mr Speaker, Sir, I beg to move the motion* standing in my name on the Order Paper. * The motion reads as follows: That this Parliament, pursuant to section 3 of the Departmental Titles (Alteration) Ordinance (Chapter 55), resolves that the Schedule to the said Ordinance be amended by the deletion under the headings of "Old Title or Name of Office" and "New Title or Name of Office" respectively of the items shown in Part I of the following Schedule, and by the addition under the headings of "Old Title or Name of Office" and "New Title or Name of Office" respectively of the items shown in Part II of the following Schedule:- THE SCHEDULE Old Title or Name of Office. New Title or Name of Office. Part I. Commissioner of Customs and Comptroller of Customs Excise. Superintendent of Excise. Senior Customs Officer Assistant Superintendent of Customs Officer Excise. Probationer Assistant Customs Cadet Superintendent of Excise. Assistant Supervisor of Preventive Officer Customs. Deputy Commissioner of } Excise. } Senior Assistant } Comptroller of Customs. Assistant Comptroller of } Customs. Junior Customs Officer. Assistant Customs Officer Customs Officer. Higher Customs Officer. Assistant Customs Officer. Customs Officer Preventive Officer. Revenue Officer, Senior Grade Part II Comptroller of Customs. Comptroller of Customs and Excise Deputy Comptroller of Deputy Comptroller of Customs Customs. and Excise Assistant Comptroller of Assistant Comptroller of Customs. Customs and Excise Senior Superintendent of Senior Customs Officer. Customs and Excise Higher Customs Officer. Superintendent of Customs and Excise Customs Officer. Assistant Superintendent of Customs and Excise Higher Revenue Officer. Chief Customs Officer Revenue Officer, Senior Senior Customs Officer Grade.”
“Mr Speaker, Sir, I beg to move that Parliament doth agree with the Committee on the said resolution. Question put, and agreed to. Resolution accordingly agreed to. LEGITIMACY (AMENDMENT) BILL 3.49 p.m. Order for Second Reading read.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to a certain resolution. Resolution reported - "That the sum of $6,335,170 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Estimates of Expenditure for 1966 contained in Paper Cmd. 9 of 1966.".”
“Bill considered in Committee; reported without amendment; read a Third time and passed. FIRST SUPPLEMENTARY ESTIMATES OF EXPENDITURE FOR 1966 OF SINGAPORE 3.30 p.m. Order read for consideration in Committee of Supply [Allotted day]. [Mr Speaker in the Chair]”