Mr Speaker, Sir, I beg to move, That this Assembly, after careful deliberation of the acute problems of unemployment caused by Singapore's rapid population increase which is not accompanied by corresponding increase in economic expansion. ALERTS our people to the paramount need to expand employment opportunities, and to this end APPROVES the State Development Plan 1961-1964, and CALLS on all sections of the people to unite in their effort to fulfil the plan, and in particular EXHORTS the workers and trade union movement and the businessmen and industrialists to play their part in maintaining a fair balance of their respective interests so essential to success. Before I proceed to discuss the general principles and some of the detailed contents of the Development Plan, I think I should say something about the manner in which the Plan was conceived and worked out. Some such action is necessary because there are some people who are foolish or misguided enough to say that this Plan has been produced for the purpose of the Hong Lim by-election. This is absolute nonsense. An undertaking of this magnitude requires months of preparation and considerable amount of thought and judgment and many tedious hours of grinding work on minutiae. It was, in fact, in October 1959, just over four months of the P.A.P.'s assumption to office, that a decision was taken to prepare a Development Plan for the term of office of the Government. Since then, many months of labour had been devoted to shaping out the multitude of projects which eventually found their way into the Plan. Some of these projects were then already available in rough form in the different Ministries and Departments of the Government. But they had to be developed into a more definite stage before they could be considered fit for inclusion. It is necessary not only to have ideas about what new projects are desirable. In order to have a Plan worthy of the name, it is necessary to work out the consequences that follow from the implementation of such projects. There will be important matters such as the effect on future expenditure and revenue that must be fairly closely estimated. The contribution to the economic strength of the country or to its social development must also be properly assessed. The most important of all, an estimate of our financial and economic resources must be undertaken. So for eight months, Ministries and Departments of the Government worked on the Plan. The preliminary draft was finally completed in June 1960. It was approved in principle by the Cabinet. Publication was deferred, however, because of certain unknown factors, particularly the extent of financial aid that we can get from overseas. Consequently, it was decided to defer publication of the Plan until the outcome of the financial talks with the United Kingdom Government is known and the attitude of the World Bank towards any loan application from Singapore could be assessed with a greater degree of certainty. Accordingly, I proceeded to the United Kingdom last July and held discussions with the British Government. Members already know the outcome of these discussions. A certain amount of aid in the form of grants and Exchequer loans was negotiated. But they only covered the period 1960-62. The reason was that the British system of overseas financial assistance was based on a 5-yearly budget, and it was not possible for them to make any commitment going beyond 1962. While uncertainty in respect of British financial assistance had not been completely resolved, at least we knew what we could get the next two years. My visit and discussions with the World Bank had proved fruitful in that the World Bank despatched a Mission last September to make a study of the financial standing of the Government, the soundness of its financial and economic policies, and the extent to which it is credit-worthy. The Mission despatched by the World Bank had completed their report. They had forwarded, as a matter of courtesy, copies of their report to the Singapore Government. But it is not the practice of the World Bank to release the report for publication. I am, therefore, unable to divulge the contents of this report, however pleasant such a task would be. But I can say that the World Bank is prepared to consider loan operations in Singapore, and to this end they would despatch a further Mission to consider which of the projects included in the Development Plan could be financed by World Bank loans. The Mission will arrive in Singapore next week. I am sure that Members will be heartened by the willingness of the World Bank to negotiate development loans with the Government of Singapore. After the details of the United Kingdom financial assistance were known and after there was hope of getting World Bank loans, it was decided to revise the original 5-Year Development Plan to take into account these matters. By that time, the best part of 1960 had already passed and therefore it was, in the first instance, necessary to reduce the Plan period from five years to four years. It was also necessary to make minor revisions to some projects. The technical work of revision is an extremely intricate and arduous one. And officials in the Ministry of Finance who were responsible for making the detailed and revised version deserve all credit for the expeditious and thorough manner in which they carry out their work. And so it was that early this year, proof copies of the Development Plan were sent to the Government Printer, who accepted this work on a priority basis. It was, therefore, possible to present the Development Plan for the approval of this Assembly today. Sir, I do not wish to be embroiled in the details of the Plan itself. They are there in published form for everyone to read. But I think I should set out the principal lines along which fundamental thinking on the Plan took. To start with, it was necessary to examine the economic structure of our country in some detail, and to analyse the principal problems facing us. Everybody knows that the supreme challenge is to match our population growth with at least a similar rate of expansion to provide jobs for our growing population. In Chapter I of the Plan, the problem is analysed lucidly and in detail, and I recommend all those who are concerned with the affairs of State to study this chapter of the Development Plan. It makes for sober reading. It is an excellent antidote to those given to political euphoria to be reminded of the stern and objective facts of our economic life. The problem then having been passed, it is necessary to develop a set of solutions. But there is an intermediate stage. We must find out just what our sinews are; more simply, how much money do we have in the kitty today. How much money we can expect to have in the kitty tomorrow. Where the contribution from our own resources is inadequate, how much can we get from overseas. Here, I may perhaps be permitted to digress for the moment to answer some exceedingly foolish criticism of the fact that we go overseas for financial aid. There is no developing country in the world which spurns overseas aid, be the country in the Communist world or in the non-communist world. What we have to ensure is that the aid which we receive is consistent with our self-respect as a self-governing people, that is to say, that no strings are attached to this aid that go against the policies which we ourselves favour. An appraisal of our domestic resources is made in Chapters III, IV and V of the Plan. Chapter II reviews the past performance of Government finances and Chapter IV attempts a forecast of revenue and expenditure for the Plan period. Those forecasts are as close as we can make them, but in an open economy such as ours, we are exposed to the fluctuations of world trade generated abroad. The forecasts of revenue are based on the assumption that no significant recession in trade develops in the World economy. The estimate of our total resources available for financing the Plan shows that most of the money we need must come from our own pockets. Out of a total need of $871 million, no less than $591 million must be provided by our own people. These domestic sources of finance fall into three groups. First, the projected revenue surpluses of $116 million for the next four years. Then, there are the Reserve Funds in the Government and Statutory Boards amounting to $149 million. Finally, we shall have to float loans in the Singapore market amounting to $230 million in the next four years. External assistance has been set down at $280 million or some 32 per cent. This is not an excessive amount. The Plan itself as summarized in Chapter III envisages a total capital expenditure by Government and Public Authorities of an amount of $871 million. Of this, $508 million contributes towards strengthening our economy in one way or the other. That is to say, more than half of our proposed investment programme in the public sector is intended to increase our economic strength. The balance goes principally to social development, of which by far the largest item is to house the over-crowded citizens of Singapore. Housing Development is expected to use $154 million in the next four years. The programme now prepared by the Housing and Development Board will run into 1965 when they expect to build 51,000 houses at a cost of nearly $200 million. This is an all-time record for Singapore and, indeed, I suspect, in the whole of Asia there is no housing project so comprehensive as the one we are undertaking, if we relate it to a population basis. Education takes a tremendous slice of our Social Development Programme, and nobody can regret that we have to do so. What is regrettable is that the parents of Singapore in the last 16 years had been so prolific in their capacity as parents that they have created for the whole country a problem of almost terrifying dimensions. I do not propose to discuss the other contents of the Development Plan. I have no doubt that the Ministers concerned will have to say something about their own development proposals. I wish to take a broader perspective and set out the methods whereby we can overcome these problems. I need hardly mention that the problem we have to solve is how to create more jobs for our growing population. This has been repeated ad nauseam. I do not want to say further except to pose the magnitude of the problem. Reduced to the simplest terms, by 1964, we shall have to create 84,000 new jobs. How do we get about it? What must we do to give the country a fair chance of creating these new jobs? What must we refrain from doing? I think it is important that everyone understands the answers to these three questions. The Government alone is not the sole dispenser of jobs. By our own efforts, we cannot solve the problem of increasing unemployment unless the people themselves and their leaders in their respective spheres of activity, be they the labour unions, the entrepot trade, the industrial concerns - unless as I said the people and the leaders are prepared to observe a code of conduct that amounts almost to a code of social discipline. Unless these things are done, then I say that the Government, by its own efforts, will not be able to solve the grave problems ahead. To this end, therefore, we cannot neglect to drive home to the people of Singapore the seriousness of the situation and the self-control that they must exercise if we are to see this country through the difficult period ahead. In theory, the solution to our problem is a simple one. You want to create more jobs. Your trade in which you depend for your livelihood to a great extent will not increase all that fast. You therefore industrialise, that is to say, you build new factories, thereby giving jobs to your growing population. That is the theoretical answer. In its practical implementation, however, many snags arise and many bugs have to be ironed out. It is in the work of ironing out the bugs and overcoming the snags that a major concerted effort must be made. Let me discuss some of the major problems of industrialisation. The first is that to have to build factories we must have the people who know what factories to build and how to build them; and having built them, know how to run them efficiently. This is an incontrovertible, indeed self-evident, proposition and yet very few people are aware of the fact that this is one of our major obstacles. The sources of difficulty are many. Our businessmen are conversant in trade. They have less experience in manufacturing. Where there are opportunities, no doubt eventually someone will take advantage of it. But what we need now is a programme of accelerated industrialisation fast enough to mop up our pool of unemployed and to absorb the young people who will be looking for work in the years to come. The scale of the effort that must be mounted is something that is unprecedented in the history of Singapore. Therefore, special measures have to be taken to make possible industrialisation at the rate required. Certain things are necessary for rapid industrialisation. We must have factory sites, supplies of power, water, roads, communications and port facilities. These are being provided for in the Plan. But the industrial estates you build would be a sheer waste of money unless you know that industrialists are willing to set up factories on your estates. Our local industrialists will be encouraged to the maximum extent to take advantage of these opportunities. But in the first phase, at any rate, it is certain that we shall require manufacturers from abroad to invest in industries in Singapore, either by themselves or in participation with local industrialists. But no manufacturer from abroad has any obligation to Singapore to set up factories here. They will consider investment in Singapore only if they see that it is profitable to do so not only immediately, but over a number of years. It is, therefore, vital for our survival that we made the conditions attractive. There are the economic inducements such as the Pioneer Industry Legislation which exempts certain new industries from payment of income tax for up to five years. We can create favourable conditions for new industries if we are prepared to set up import duties, which must have the effect of raising prices and increasing the cost of living. We may try to extend our overseas markets by various kinds of trade agreements with our neighbours. These all help to make investment in Singapore attractive both to the domestic as well as the overseas manufacturer. But more important than these matters is to create a climate of economic stability and confidence so that people who make the decisions whether to invest in Singapore or not know for certain that the calculations which they now make have a reasonable chance of fulfilment. One of the most important elements in this climate of confidence is stability in labour-management relations. The responsibility for maintaining good labour-management relations rests not merely with labour, not merely with management; nor is it the entire responsibility of the Government. It is necessary to have all three parties working towards an agreed objective and agreeing also on the means whereby inevitable differences must be resolved. Members would have already known by now the general form of agreement which the Government and the T.U.C. have come to. We have demarcated the sphere of the economy consisting of industrial enterprises which have a significant export market. In this sphere of the economy, the T.U.C. has accepted that stability in wages is a desirable objective to attain and they will do everything that is possible to contribute to such stability. I think this is a significant advance in our quest for industrial peace with justice which is the only base on which we can build economic stability and a climate of confidence. This contribution of the Trade Union movement can be a valuable one. I think it will be welcomed by everyone who has Singapore's interest at heart. But may I say to the employers that it is not without difficulty that we have persuaded the Trade Union Congress to this working arrangement? I expect employers to respond to this effort of the T.U.C. with an equally understanding and generous attitude. It would be a disaster if the employers were to regard this as a signal whereby they can mount an offensive against the workers or the Trade Union movement. Any action to take advantage of union restraint by provocative action would be met with stern disapproval by the P.A.P. Government. But if the employers were to respond generously to the T.U.C.'s policy, then I think we have the basis on which to build up better labour-management relations so that the benefits from this through improved productivity can be shared in a just manner between capital and labour. I do not regard the agreement whose outline has been published today to be the first and last step in our quest to improve labour-management relations. The general proposals will have to be examined in further detail so as to produce concrete working rules. But this I wish to say of the trade union leaders with whom I held discussions. They are fully aware of the challenge to the economy in general and to the working class movement in particular that is posed by mounting unemployment. They are also aware of the limitations as regards the means that we can use in the present phase of Singapore's historic development to meet these problems. But they find themselves in a dilemma. The Trade Union movement in Singapore has always been a militant one. Aggressive policy and aggressive tactics were necessary in the past not merely because the employers were fully supported by the instruments of State power under the colonial regime. The Trade Union movement also had to lend its strength to the anti-colonial struggle. Further, a large section of the movement, which is based on the Chinese working class, draws its ideological inspiration from revolutionary Marxism. A number of union cadres are being trained to analyse the problems they meet in terms of Marxist-Leninist concepts. It is not my intention here to enter into a philosophic discourse on the merits or even the relevance of these revolutionary tenets in the context of our Island State. All I want to say is that, this being the case, the top level leadership of the Trade Union movement will need to explain to the leadership at lower levels and to the rank and file, the nature of the changed situation in Singapore. For myself, I think their readiness to declare themselves in favour of wage stability as a general condition of our manufacturing industries shows not only a realistic acceptance of harsh reality, but it also shows a welcome degree of political courage. The Government is aware of the many traps and pitfalls that still lie ahead for both the unions and for ourselves. But there is no reason why, if all parties concerned are prepared sincerely to work towards the objective that has been agreed upon, success cannot be achieved. I have spent some time dwelling on the prerequisites for successful industrialisation. because the principal purpose of the Development Plan is to make possible private investment, both from domestic and external sources, on a scale massive enough to provide the additional jobs that we need. Apart from improving labour-management relations, there are other matters needing attention. It is necessary for the Government actively to encourage the establishment of new industries. I think a review of our past efforts and future intentions will be appropriate here. What we have done in this field has been principally in the way of building up a preparatory organisation and doing the basic researches that are necessary. We have been fortunate to have received a tremendous amount of assistance from the United Nations. They have been extremely generous and helpful in the supply of experts and technicians. The Industrial Survey Mission headed by Dr Winsemius arrived in Singapore last October and a follow-up team to complete their work is now arriving in Singapore. The team consists of experts in various branches of industry-shipbuilding, chemical engineering, electrical goods, metal and engineering industries. These experts have prepared or are in the process of completing technical reports on what industries can be established in Singapore in their respective fields, having regard to both the economic and technical limitations. There is also a powerful team of steel experts in Singapore under the leadership of Mr Schereschewsky. These technical reports on investment possibilities which are prepared by top-ranking world experts would be of invaluable assistance to us in our effort to promote the establishment of new industries. Industrialisation has often been taken as a vague concept. What is needed here is less general talk on industrialisation and more concrete ideas on exactly what type of factories we can establish in Singapore and how it is to he done. Such ideas can only be developed by people who have experience in particular industries. Without their concrete proposals, we shall still be in the stage of vague generalisations, out of which the bricks and mortar and machines of industry cannot be created. The United Nations Steel and Industrial Missions study particular industries which in their opinion are feasible in Singapore, and this will give us something to work on. The work itself will be carried out by the Economic Development Board. I have mentioned to the Assembly on a previous occasion that we have at last found suitable top personnel to man the Board. They will be ready for work in six weeks' time when the Director and important engineering personnel will have arrived in Singapore. The work of drafting the Bill establishing the Economic Development Board is proceeding and I hope to introduce this Bill at the next session of the Assembly. While we have achieved some success in establishing new industries in Singapore, the major effort has yet to be mounted. After two years of arduous work and with the generous assistance of the United Nations technical assistance, we have at last reached a stage where we can mount this effort. But let no one be deceived into thinking that once the Economic Development Board is established and technical reports digested, then factories will mushroom all over the face of Singapore overnight. This simply cannot happen because of the large amount of preparatory work that must be put in before the factories themselves appear. It must take some time to achieve pace in development. Given the most favourable conditions, it will be some years before we get into full stride. In the meantime, the problem of mounting unemployment can hardly be set aside to wait the fruition of our effort on the long-term programme. The U.N. Industrial Mission is fully aware of this and has recommend that over the next few years a crash programme to create new employment opportunities be carried out. It has selected two areas where the creation of employment can be accelerated in a short space of time. These are employment on board ships belonging to international lines making use of Singapore as a port of call, and, secondly, the expansion of our ship breaking industry. These are matters of immediate importance, and I may perhaps be permitted to dwell on them. As regards employment on board ships, the Government has held discussions with the principal shipowners and has proposed, for their consideration, modifications in the present system of registration of seamen for employment on ships. The present system has the disadvantage of being unduly rigid and automatic in its application. There is no choice allowed either to the seamen or to the shipowner as regards the placing of seamen. It was, therefore, proposed that Company Registers be introduced whereby some choice is made available both to the shipowner and to the seamen. At the same time, training facilities have been established to increase the attractiveness of Singapore as a port of recruitment for seamen. With the co-operation of one of the larger shipping lines, training courses for saloon workers on ships will commence this month. The Polytechnic has also introduced courses for marine engineers, deck officers and wireless operators. Shipping lines, both local and international, have agreed to employ the graduates. By these, and other measures, we hope to increase the rate of employment of Singapore seamen on board local and international lines. Recent figures have shown a welcome and substantial increase. The figure for last month's recruitment saw a 50 per cent increase on the monthly average of the previous year. To increase the attractiveness of the port of Singapore to shipping lines, the Government has decided to introduce round-the-clock port services which the shipping lines had asked for. Staff for the Immigration and Health Departments will have to be increased to provide the additional services which we hope to introduce by the middle of the year. Members will be interested to know that these measures have been worked out in consultation not only with the shipowners, but also with the Trade Union Congress. This is an example where co-operation between Government, the Trade Union movement and employers can produce substantial benefits to everyone. As regards ship-breaking, our experience has been less happy. I held a meeting with local firms engaged in ship-breaking and offered them the maximum facilities and inducement by way of land, supply of working capital, assistance in training if they would work out a programme of rapid expansion. Unfortunately, our shipbreakers are limited in their technical and financial capacity. They also lack the vision that is necessary in developing an extensive industry which can compete in the international market. Accordingly, I have got in touch with ship-breaking firms overseas and am in the process of discussing with them the terms under which they could operate in Singapore. Ship-breaking is an ideal industry for mopping up unemployment, because it employs large numbers of people, requires a relatively small amount of fixed capital, and has a ready market for its product. I therefore feel justified to offer to these overseas shipbreakers extremely favourable terms. Briefly, these include the supply of working capital at rates well below commercial rates. Good land will be made available to them and the Government is prepared to bear a substantial part of the cost of training of workers. They can also be considered for pioneer industry status. I now wish to say something about the manner in which the Development Plan is to be implemented. First, of course, we must make sure that we have the money to pay for the cost of the Plan: estimates and forecast of revenue and loan possibilities have been made in the Plan and, if these are realised, then the financial bottlenecks to the implementation of the Plan would have been solved. What remains to be done then is to gear up our administrative machinery and our corps of engineers, architects and other technicians to the physical effort. In order to ensure that no obstacle is created by way of administrative delays, a reorganisation of the Finance Ministry has been undertaken. Development proposals will no longer be processed by Treasury officials as they had been done in the past. Treasury officials have been trained, and quite rightly, to regard every application for new expenditure with the gravest suspicion. Obviously if financial approval for development expenditure has to be processed in this manner, it is likely to result in interminable correspondence and even acrimonious disputes. Some new system must therefore be introduced. We have now established an Economic Development Committee consisting of both Ministers and senior Government officials. I myself as Finance Minister am Chairman of this Committee and the Minister for National Development is a permanent ministerial member. Ministers whose development proposals are under examination will attend as members of the Development Planning Committee. The officials will include the Director of Public Works, the Permanent Secretary (Economic Development), and Assistant Secretaries of the Development Secretariat which has also been recently set up. The Development Secretariat will be a new branch of the Finance Ministry. It will concern itself not only with the routine processing of development proposals but also with the checking up of progress on the implementation of development projects. It would, therefore, serve as a central reporting system on the progress made in all fields of the Development Plan. The Development Secretariat will therefore be able to alert the Government should any project lag behind its performance programme. The Economic Development Committee will be concerned with matters of policy and priorities. No project will be proceeded with unless the Development Committee has given its clearance. This clearance, however, is subject to detailed examination by a Committee of permanent officials with the Director of Public Works as the Chairman. This Committee is known as the Economic Development Sub-Committee and will replace the present Public Works Standing Committee. In order to emphasise the performance aspect of planning implementation, the Director of Public Works has been appointed Chairman of the Committee in place of the Treasury official who took the chair of the former Public Works Standing Committee. These are the administrative changes which are necessary to cut out red tape. We have decided also to strengthen the staff of the Public Works Department and have applied to five countries for assistance in the recruitment of engineers, architects, quantity surveyors and other grades of professional technicians. The number of additional staff at professional level we now need is 52. The countries we have approached are the United Kingdom, Australia, New Zealand, Japan and Israel. The overseas staff will be recruited against supernumerary posts: that is to say, they will not be held against the permanent establishment which we reserve as promotion posts for our junior engineers. The Director of Public Works has also been asked to draw up his future staff needs to enable him to cope with the greatly enhanced volume of work that the Plan calls for. He is also starting a departmental training scheme to train junior technical staff in various branches of work. As regards current performance, I will leave it to the Ministers concerned to report to the Assembly the progress now being achieved. I only need refer to a statement made by Mr Ong Eng Guan in a Hong Lim by-election meeting that the Government had done nothing beyond building some 26 community centres. He is reported to have said that the Government is building no schools and no houses. This is a calculated and blatant falsehood so characteristic of the former Member for Hong Lim. I await with interest to see whether his two companions still in the Assembly will be prepared to repeat this outrageous lie. The approval we are seeking in the Assembly or the Development Plan does not mean approval in detail of each and every item of the Plan as a fixed and permanent project to be carried out during the Plan period. As has been emphasised in the text of the Plan itself, there must be some flexibility in implementation. It may be necessary to re-examine some projects. It will certainly be necessary to revise the cost of those projects whose detailed planning had not reached a conclusive stage. These amendments to the Plan, as and when they are made and decided upon, will be reported to the Assembly for its approval. The most convenient occasion for such reports would, I think, be the Budget session. Where new projects are introduced and have to be proceeded with without; further delay, then the approval of the Assembly will be sought in the normal manner through Supplementary Estimates. Sir, I beg to move. Question proposed. 3.21 p.m.