Mr Speaker, Sir, when independence came to us three years ago, our immediate preoccupation at that time was to find ways and means by which to promote economic growth, as if out of nothing. Today, looking back, we can take comfort from, and have a sense of pride in, the achievements of these eventful years. What economic progress has been attained is undoubtedly the result of effective organisation, realistic planning and a disciplined approach to our numerous problems. Compliment must of course be paid to the untiring efforts of industrialisation and it is on industrialisation and also trade which the hon. Member for Sembawang has, I think, given me justification to make this general comment on policy in relation to foreign affairs. Because without industrialisation and trade, there will not be marketing, and without marketing with foreign countries there will be no trade representatives. I think trade representatives have to go along with political representatives in the way of High Commissioners and Ambassadors. However, Mr Speaker, Sir, we must not overlook the fact that another element which has made all the achievements possible is our adherence to a realistic policy - one which seeks the maximum number of friends on the basis of equality and mutual respect, non-alignment in bloc rivalries and the desire to trade with all countries irrespective of their political ideology or their systems of government, so long as such trade is to the mutual benefit of these countries. This realistic approach to problems of international relations has indeed paid dividends. For looking around us, the results of these policies should be evident to all of us. We have in Singapore diplomatic missions, consular offices and trade representations from different countries in the world, many of whom adhere to diverse policies and take different postures on international issues. I would say even belonging to different blocs. But what is important is the fact that we would not have counted so many diverse friends to our credit, if not for the fact that the permanent premises on which our foreign policy is 'based is something on which others cannot find fault with us. Foreign policies may change but the premises on which these policies are founded must always remain unaltered. Our basic principles of a non-communist, democratic, socialist state will forever remain unchanged. That I am confident will be the case with us now and in the future. For who can blame us for these premises? Our fundamental ob jective is to enhance the prosperity and the security of Singapore. We are simply for Singapore. We are anti nobody, just pro-Singapore. For this is the case in fact with every country in the world, and I would say this is the right of every nation to pursue. The other, which is the philosophy of our foreign policy, is how we should see the world around us and interpret the changes and instability outside our frontiers. For is it not in the light of these changes that any country will have to make whatever adjustments that are called for in their foreign policy and enhance its security and prosperity? We must therefore be flexible in our policies towards other governments and states. We cannot afford to be one-track minded. Indeed we have to adopt a policy of open-mindedness in our relations with other governments and states. At the same time, we have to be firm, consistent and rational in our postures. As a government and people we cannot and should never allow emotions to get the better of us, because this can only lead to irrational, insensible action. Governments and states we have learnt are primarily motivated by self-interest, and there is nothing unusual or extraordinary about this. At the same time, we also know that this motivating factor of self-interest is not inconsistent with friendly external relations with others. This is the reason why difficulties between governments and states encountered one day are more often than not resolved and overcome the next. International relations or intercourse between states is not something which started with the League of Nations or with the United Nations or with the present-day regional groupings and alliances. They started ever since human communities made contact with one another from time immemorial. The only difference is that since human societies became more complex, the social, economic and political problems which arose with greater sophistication needed equally sophisticated solutions. And international relations is merely a manifestation of the external complexities within states and between them. So to be inflexible in our attitudes towards other states and governments is to be like the proverbial ostrich and reflects immatu rity. No problem is beyond solution; no difficulty is too great. We must never be overawed by international problems, however insoluble and great they may appear to be at the start. Singapore believes in having a warm heart and a cool head in its relations with other nations. Mr Speaker, Sir, Southeast Asia, of which we are an integral part, is in a state of turbulence. There have been troubles and anxieties for the past 20 odd years, since the end of the last World War. A look into recent history should confirm that wars and revolutions, racial conflicts and economic disintegration, communism and colonialism, all have plagued us in Southeast Asia. Be that as it may, the question that arises is how we in Singapore should perceive this turbulent world around us and take intelligent steps in our own interest to overcome these problems. In the history of nations, such a crisis is not new. The same could also be said for Southeast Asia. But like all others, we in this region must benefit from the lessons of history, for the fact that emerges from history is that mankind has seen such turbulence and crises in different ways. Some see in them nothing but danger. They accept them as inevitable and succumb to the gloom and hopelessness which such a mood generates. Others have seen in such turmoil challenges as well as opportunities and it has not been uncommon for some to face these challenges and successfully tackle them with resoluteness and self-confidence. Singapore has seen many crises in the past and, going by past experience, I am confident that the people of Singapore will also rise to new challenges if and when they arise. During confrontation many people thought that this thing called confrontation was insoluble. Many threw up their hands in despair. Many secretly and privately thought Sukarno was right. Yet our patience and, of course, circumstances proved that it could not and did not last. I am sure that in the coming years they will see these challenges more as an opportunity to put things right in the interest of Singapore, rather than give way to gloom and despair. It is, therefore, inevitable that we in Singapore must not only appreciate the challenges ahead but must understand the nature of the problems that face us, if we are to take measures which are necessary to insulate ourselves against the problems well in advance. This is precisely what the Budget, which has been presented by the Minister for Finance for the coming 15 months, seeks to do. As a realistic people who support realistic policies, which are intended to serve their best interest, I am confident that the people of Singapore will rally to the call, as they have always done in the past. For they know that we are a tightly packed society in an island of two million people, with no natural resources and not even an adequate supply of water. The people of Singapore know that the Government has always pro moted realistic solutions to their problems. They know that since the P.A.P, came to power in 1959, we have consistently followed our major goal of giving our people all the opportunities to develop their human potentialities and to give them a better life. They are conscious that we have consistently maintained these policies and I am confident that they will perceive the objectives which - as the Minister for Finance has outlined in the presentation of this Budget - aim not only at furthering this major goal but also seek to ensure that what we achieve is always available to them and to succeeding generations. Mr Speaker, Sir, people in all walks of life are conscious that a new element has loomed over our horizon. They realise that the British decision to withdraw in 1971 and not in the mid-1970s has made it imperative that we seek alternative measures to secure our independence. What this means is that with British withdrawal, we also have to make ourselves self-reliant in matters of defence and this has to be done not within eight to ten years, as we had originally envisaged, but within three years from now. Judging by the enthusiastic support which our people have hitherto given us in respect of the challenges posed by other problems, I feel confident that Singapore should be able to be reasonably self- reliant in matters of defence, with the assured support of its people for the measures that have been proposed. Of course, the objectives have been clearly outlined by the Minister for Finance in the presen tation of the Budget and it should be obvious to everyone what we mean when we say that we intend to be self-reliant. It is a fact of international life that small countries have always had to live in the shadows of bigger ones. In recent years, there was reason to hope that the shadows which big nations cast over the smaller nations would grow shorter and less threatening. There were indeed encouraging signs at one time when big nations joined others in the establishment and recognition of ethical norms in international relations. It is loudly proclaimed that adherence to the principles of sovereign equality of all states; that respect for the territorial integrity of other states; that non-interference in the internal affairs of other states; and that the renunciation of the use or threat of force in the settlement of disputes between states are the foundations on which relations between countries are to be conducted. It is even said often that the old doctrine of spheres of interests, or spheres of influence, in which a dominant power could dictate to the state living in its shadows, is clearly repugnant to universally accepted principles of international conduct. But the sad fact of international conduct today suggests that what may be an ideal may not necessarily be a fact. We do not dispute the fact that the ultimate security for small countries like us depends less on wasteful expenditure on armaments and more on building and strengthening the international forces of peace. Mr Speaker, Sir, we in Singapore are convinced that only the strengthening of the climate for peaceful relations and greater co-operation between nations, both big and small, can help save arms expenditure and enable us small countries to use the money to combat poverty, ignorance and disease, which are our real enemies and whose defeat is both rational and worth while. But if we are to go by what is going on around us, notwithstanding these ideals, I am afraid we cannot help but believe that every dollar spent on arms, though wasteful, is a necessary expenditure under the circumstances, at least until we have satisfied ourselves that we have attained that measure of self-reliance in defence which is necessary for us small countries, or at least until the forces of internal peace can come to our aid. Until such time as nations can achieve these goals and view relations with one another in a realistic fashion, I am afraid we cannot be complacent about such questions and ignore our responsibility to become self-reliant for our own security. In this world of interdependence, our objectives of a better life for our people can be achieved in many ways. We recognise that not least among them is by co- operating with other countries, particularly those around us and closest to us as well as others which are more advanced than we are. This is the kind of co- operation which, in our view, will be further enhanced only if conflicts between nations, and particularly the bigger nations, are brought to an end. It is increasingly dawning on the minds of world leaders that we can no longer seek solutions to international problems in terms of past memories but should realistically look for these solutions in the present circumstances and with future objectives in mind. In other words, we must not go back to the glories of the past, imaginary or otherwise. We must look to the present and to the future with optimism. We must bury the dead past. That is why Singapore looks hopefully for an end to irrelevant conflicts in this region and other regions, which for the last two decades have distorted relations not only amongst us in Southeast Asia, but also amongst countries outside Southeast Asia. Our salvation lies in us - the countries of Southeast Asia - cooperating and pooling our resources in order to progress and advance. We have decided to join and support the Association of Southeast Asian Nations - ASEAN. We have not done this for nothing. We are in ASEAN because we believe that the pursuit of regionalism is in the interests of all of us in Southeast Asia. We have absolutely no illusions about regionalism and even though ASEAN is presently having some difficulty, we are convinced that this is but a temporary phase and one which other successful regional organisations have experienced in their early years. This is even the case with the United Nations, and although one hears frequent criticism of the United Nations and its role in world affairs, its short comings and failures; though one hears the United Nations described as a big talk-shop; though one knows that the United Nations has not been able to do much in areas of conflict like the Middle East; though one knows that the wasteful war in Vietnam has been what it has been for several years in the past because the United Nations has been helpless; yet the fact remains that no member organisation, whether big or small, in the United Nations has been able to convince its members that the best course is to scrap it. All members of the United Nations believe that the organisation should continue. So rather than concern ourselves with trivial and transient issues, it is important that we should pursue the more formidable and long-term challenges which ASEAN has been established to face and solve. Whatever others may say, Singapore is determined to see that regardless of the minor difficulties ASEAN must continue. Whatever the differences, recent tensions in the world have proved that it is always better to go on talking on problems, however insoluble they may appear, rather than pretend that they do not exist. There is a saying in Malay, Mr Speaker, Sir, that however annoyed one is by the nuisance created by the mosquito buzzing near one's ears, one should never seek a solution by burning the mosquito net. There is one other aspect of regionalism and interdependence upon which I wish to touch. We in Southeast Asia can be described as developing nations. We are at varying degrees of under-development. Co-operation between economically weak and politically unstable situations, with all the best of intentions and mutual goodwill, cannot, I am afraid, ensure rapid growth and development. To achieve this, we must also co-operate with more advanced friends in other parts of the world in a joint enterprise or in several joint enterprises for our common prosperity and advancement. But our more advanced friends are not going to be encouraged to help us if we cannot co-operate and make regionalism work successfully. They are not going to be encouraged to help us if we quarrel among ourselves over small issues. They will naturally ask how we are to work together on bigger and more important matters if we cannot solve and settle minor problems. This is the problem faced by members of regional groupings and alliances which, for some reason or another, cannot get along with one another. This is the question which they should pose themselves and try to answer honestly. However, this alone will be insufficient, for co-operation among ourselves alone will not make for speedy advances towards modernisa tion. On the other hand, they will be slow and difficult, for the simple reason is that co-operation among poorer countries is not always the best way of growing rich materially and spiritually in a short space of time. We believe that co-operation in Southeast Asia must, therefore, involve not only asso ciation among ourselves but that these associations must be complemented with association with friends, rich as well as the not so rich in the world. I think, if the big powers realise that they have more to gain by co-operating both with themselves and with others to help less advanced countries, the less the occasion for big power conflict and rivalries and the ever present danger of major conflict in our area. To that extent, Singapore will support any move for co- operation among ourselves in Southeast Asia, and any approaches which show a sincere and practical desire by the big powers to assist in the genuine development in the region, instead of drawing small countries into big power conflicts, will be welcomed and supported by us and other small countries. It is quite often mentioned by us and by others that small nations do not have the power to influence events in the world. Mr Speaker, Sir, this is very true. This is so true that only a few months ago we have seen how a relatively small country like Czechoslovakia was subjected to intrusions by a very much more powerful country. But the question is, collectively small countries can, given the right circumstances, given the right leadership and with good intentions, assert their moral influence in influencing world events. To that extent, Singapore will co-operate in pursuit of its policy of non- alignment in influencing world events, not by itself alone but in conjunction with other countries in the world which pursue policies which are not detrimental to the interests of others and which certainly do not interfere in the internal affairs of small countries like Singapore.