Mr Speaker, Sir, I beg to move, "That the Bill be now read, a Second time." I have His Excellency's recommendation that the Bill be proceeded with. Sir, in part I of the People's Action Party long-term statement of policy - The Tasks Ahead - we set out on page 25 in the Chapter on our Economic Policy, the proposal to establish an Economic Development Board which will plan, co-ordinate and direct the industrialisation of the State. On coming into office, the Government set about the task of establishing the Board. The model of organisation and pattern of legislation of economic or industrial development boards of our Asian neighbours and of smaller countries further away, were studies in detail. The important function of the Board in the determination of our economic future did not permit us merely to copy or to graft. We were searching for an organisation which would fit itself into the economic situation and structure of Singapore. Economically, Singapore today is in a crucial stage of transition. On the one hand, we have to do our best to maintain and expand our trade, which has sustained Singapore so long and so well. At the same time, using the profits and the organisation of trade as a spring board, we have to industrialise quickly and efficiently so that, in the near future, we shall be able to sell to our neighbours the products of our labour instead of merely the services of our entrepot skill. Countries around us are increasingly pursuing, and justifiably so, a policy of direct trade. In this expansion of direct trading relations, Singapore can hope to play its role by being the supplier of manufactured products labelled "Made in Singapore". Being strategically located, the savings in freight would be one factor which will enable us to sell quickly and cheaply. To bring about this economic transformation, on which our survival depends, the Government cannot adopt a purely laissez faire attitude. Nor can it play a simple administrative role of just maintaining civil stability and providing the basic essential services. To initiate the road to industrialisation, the Government has to play a positive and direct role. The Economic Development Board which we seek to set up under the authority of the Bill now before the House will be the agency of Government to direct this transformation of Singapore's economy. It has taken the Government nearly two years to prepare for the establishment of the Economic Development Board. To some this may appear to be an unduly long period. But I myself do not accept this view. This is going to be one of the most important steps to be taken by the Government. It is obviously necessary that measures of such importance should be made only after careful thought and preparation. May I outline some of the preliminary steps which we have taken before creating this Board? The first major move that the Government made was to ask for teams of international experts to investigate the potentialities of expansion in certain specific industries. Members are already aware of the work that is now being carried out and will soon be completed by the U.N. Industrial Mission headed by Dr A. Winsemius. Why is this step necessary? Could we not have gone ahead without seeking the opinion of experts. The answer is that in attempting any major transformation of the economy, it is well to have available the opinion of the best brains that we can get hold of. For the economic position of Singapore is unique and the experience of other and larger countries in Asia which are now attempting to industrialise themselves, offers us no guidance whatsoever. The reasons are simple and have been repeated ever so often. We do not have, as they have, natural resources which can provide the raw materials for industrialisation. In itself this is not so important as these raw materials are accessible from neighbouring countries. But more important than this is the size of the domestic market which imposes a limit to the extent of industrialisation based on it. In this respect, we differ fundamentally from the larger countries such as India and Pakistan, or even the medium-sized countries in Asia such as Thailand or Burma. These countries have the advantage that the home consumer demand is large and therefore the question of an adequate market for the products of industry does not present a problem in such an acute form that it does to us. There is the further added complication of the free port status of our island State. While adjustments can be made here and there to this free port status, no precipitate action in the interest of rapid industrialisation can be contemplated which would cause such a major dislocation of the economy that the gain through industrialisation would be outweighed by the loss of our standing as an entrepot market. These considerations do not apply to other Asian countries which are attempting to industrialise. Their problems and difficulties stem from other causes, on which I need not embark here. But, faced as we are in this unique position, it is necessary to seek advice from experts abroad. We lost little time in doing so, and in Singapore today we have, in addition to the U.N. Industrial Mission, another Mission to study the establishment of a steel industry in Singapore. Both these Missions contained men of ability and experience and they have given us new insights into the nature of the problem facing us and the solutions that we can apply. We have now reached the stage when we can take this major move to establish the Economic Development Board. The acute difficulties in recruiting staff to the Board, which will need industrial economists, engineers, and other expert personnel, which we have experienced, have been partially solved. As I announced in the Assembly on a previous occasion, we have been able to get experts from countries abroad such as India and Israel, and with these as the nucleus we propose to press ahead. I will now deal with some of the major functions of the Board. First, the Board will investigate and evaluate industrial opportunities. The market potential, availability of raw materials, production costs, capital requirements and other technical factors, will be worked out and assessed. When an industry is considered feasible, industrialists will be invited to consider the establishment of such an industry, with financial and technical assistance from abroad if necessary. It may be that the industrialist may possess the know-how but lack the capital. The Board will then assist him financially by direct loans and advances, or underwrite and guarantee the issue or equity capital by the enterprise concerned. Secondly, where necessary, the Board will itself participate in establishing industries, where private participation is not forthcoming or insufficient. This may happen when an industry requires substantial investment outlay and expert technical know-how. Thirdly, to provide prepared sites for industries, the Board will have the power to lay out industrial estates, where the basic requirements of industry, such as power, water, roads, railways and such other facilities will be laid on. Finally, the Board will assist industrial enterprises by giving technical advice. A technical consultant service will be organised which will advise an industrial enterprise with regard to both economic and purely engineering problems. An industrial research unit which will be sited in the Polytechnic is in the course of establishment with the assistance of the New Zealand Government. This unit will be able to give valuable assistance, especially to medium-scale industries, in the way of solving their production and engineering problems. At a future date we intend to set up a productivity centre to improve the efficiency of management and to raise the output of workers through the application of modern techniques. The relation between the industrial research unit and the future productivity centre of the Economic Development Board is something which will have to be resolved. I do not wish to anticipate what the Board itself will want to do. This will have to await the establishment of the Board. Though the Board will have power under clause II to raise its own capital by the issue of bonds and debentures, a substantial part of the Board's assets will be made available by the Government. It is expected that over the Plan period 1961-1964, the Government will contribute from current revenue a total of $100 million for the operation of the Board. This will be done under the provisions of clause 10 of the Bill. Under clause 16, the Board will have compulsory powers to acquire land. This is necessary as the development of industrial estates and sites, which is one of the functions of the Board, must proceed expeditiously to channel industries into suitable areas where the economies of scale in the provision of basic services can be enjoyed. The Board as constituted under clause 5 includes a full-time Chairman and a Director, the Chairman of the Housing Board, and five members to represent respectively banking, manufacturing, commercial, labour and professional interests. Representation and participation in the running of the Board has been so distributed that the whole community can become a part of the national effort to industrialise, which task would be the Board's supreme responsibility. Finally, the Bill will repeal the Singapore Industrial Promotion Board Ordinance, 1957, and the assets of the present Industrial Promotion Board would be vested in the new Economic Development Board. The new Board will have a hundred-fold more resources at its disposal, with which to provide the means for the take-off into industrialisation. Now, Sir, a word about the future. The powers of the Board as I have described them fall into two broad categories. First, there is the industrial promotion effort and the rendering of technical services and assistance to industries. Then there are the financial activities of the Board such as the provision of loans or participation in share capital. It is the experience of other countries that the latter functions, that is, loan operations and share participation in industries, are better performed by a separate Industrial Finance Corporation. We may well find this to be the case in Singapore. But as a first step, it does seem unnecessary to establish two separate statutory bodies when not much is known as to the details and scope for what they would actually be doing and how much demand there would be for the services and resources that they will provide. This knowledge can only come about through actual experience, and if it is proved necessary in the future to separate these two functions and allot them to two separate authorities, then we shall proceed to do so. In the initial stages at any rate, a certain degree of centralisation would appear to be advantageous. In this Bill, we provided for the formal powers and the general modus operandi of the Economic Development Board, It is obvious that the setting up of the framework itself by no means provides a guarantee of success. Successful industrialisation depends on many other factors - maintenance of political stability, industrial peace, and a general effort by everyone to work harder and with greater skill. This means that the success or failure of our venture basically depends on whether every citizen in Singapore is prepared to make his contribution to the national effort. Sir, I beg to move. Question proposed. 6.46 p.m.