Mr Speaker, Sir, I beg to move, 'That the following Address in reply to the Speech of the President be agreed to:- "We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the opening of the Second Session of this Parliament.".'. Mr Speaker, Sir, may I say that it is a great honour for me to move this Motion. Sir, I would like to take this opportunity to congratulate the President on his re-election for another term of office. He has indeed done Singapore proud during his years in office. I have no doubt that Singapore's prestige and status will further be enhanced by his invaluable contribution. We wish him good health and happiness in the years ahead. The President in his speech indicated three major factors which would influence events in Singapore in the next year or so. These major factors are, firstly, the uncertain economic situation in the various industrial democracies; secondly, the conflict in Indochina, particularly that between Vietnam and Kampuchea; and, thirdly, the build-up of the political leadership and able administrators. The President stated that barring a recession, Singapore should be able to maintain a 6-8% growth this year@ It is imperative that we maintain the momentum of growth because growth means more jobs, higher standards of living, better social, medical and educational facilities and overall well-being and security for our citizens. We need to provide an estimated 30,000 new jobs per year for the school leavers, college and university graduates. We need to provide a better quality of life for our citizens. The Addenda of certain Ministers mention that they will provide better housing, better health facilities, better environment, improve the quality of our defence and police personnel, raise the quality of technical education and improve road safety. The Prime Minister has stated in his New Year message that this year must be a year of progress and consolidation. The Ministry of Finance Addendum states that the growth rate could be achieved only if international trade continues to grow and if our goods and services are kept competitive in world markets. As far as international trade is concerned, the President has expressed concern about the sluggish American economy, but he has also expressed hope in the performance of Japan and the EEC countries. This was also the view of Mr Charles Schultze, Chairman of President Carter's Council of Economic Advisors and Chairman of the OECD Economic Policy Committee. In November 1978, he was reported to have said that "with the exception of the U.S., domestic demand and output (of the OECD countries in 1978) had risen significantly faster than in 1977 and that stimulative actions already taken or about to be taken in Germany and Japan should help sustain growth." So we can be a little more cheerful about the prospect of international trade improving this year. Mr Speaker, Sir, it is not just international trade that will sustain our economic growth but also foreign investment. The Ministry of Finance Addendum states that Singapore needs capital investment of approximately $450 million this year and that these investments should be in industries requiring higher skills and technology. But foreign investment is a highly competitive area. For example, we have an EDB office in New York but there are about 140 other investment and promotion agencies like the EDB representing other countries striving to attract American investment. Fortunately, our EDB officials have been successful so far. But what we have to do is to maintain the conducive climate favourable for foreign investors so that this year's target can be reached. Singapore has the reputation of being a country which welcomes foreign investment. In fact, one businessman is reported to have said that Singapore is "heaven on earth for the multi-national." This is attributed to a number of factors: the political stability, good living conditions, efficient communication, able and incorruptible administrators, industrial peace and skilled labour force. We must consolidate these factors which have given us the edge over others in the field of foreign investment. These factors include those which have made our goods and services competitive in world markets, namely, industrial peace and skilled labour force. The investors say that they have their "heaven on earth" in Singapore, but the workers too want their "heaven on earth" here. To achieve this, both management and workers must continue to cooperate so that our goods and services can compete in world markets. This means that our goods and services must be of high quality and minimum cost. Management and workers must strive to achieve these objectives. I am glad to note that the Ministry of Labour will ensure that management provides a work environment, which will be conducive for workers to give of their best. Work environment means fair wages, good working conditions and personal safety and security. It is not just NWC adjustments, merit and demerit schemes but also safety measures. Yesterday we read that another shipyard worker was killed and four others injured in an explosion on board a barge in Jurong. This has come very soon after the Spyros tragedy. We know how hard the Labour Ministry has worked to ensure safety for workers, especially in the shipbuilding and repairing and the construction industry. But obviously workers and management have not learnt. Supervisory and preventive measures may, therefore, seem necessary. That is, the Ministry of Labour should provide constant check and supervision, and where necessary, impose heavy penalties on the management if they neglect their responsibilities. The Spyros tragedy must not be repeated. Mr Speaker, Sir, international trade and foreign investment so essential to our continued economic growth have been threatened by the increasing pressure of protectionism. Singapore together with its ASEAN partners must continue to be vigilant against this threat to our economic well-being. Protectionism is often a bogey used by trade unions to make further demands for their selfish benefit, and by weak governments which have adopted soft options. Both groups call for tariff and non-tariff barriers against the imports from developing countries, and even favour a cut-back on the overseas investment of their nationals. In actual fact, foreign investment benefits the foreign country more than the host country in terms of employment. For example, an American executive in Singapore has stated that "for every job we create for the locals, we promote at least two or three back home." This is because the American company operating from Singapore has been able to generate markets in Southeast Asia and elsewhere. Also the Singapore company imports all components and materials from the United States. An example of protectionism is the recent move by the Australian government to introduce cheap, no stopover fares to Europe for British Airways and Qantas. In this connection, it is timely that Singapore with its ASEAN neighbours has protested against this unfair move. Singapore and ASEAN have conveyed to the Australian government their strong opposition to the new policy. But if Canberra persists in ignoring the protest of ASEAN, then the Government together with the other ASEAN governments should consider retaliation in one form or another. While we continue to invite foreign investors and with them skills, managers and other entrepreneurs, we should also expand our own corps of entrepreneurs. The Ministry of Finance Addendum states that they will encourage more Singaporeans to become industrial entrepreneurs. But I hope that the Local Entrepreneur Scheme organised by the Economic Development Board will do more for them by providing not just loans or credits but also assistance and expert guidance which will be necessary in the initial years. With regard to the taxation policy, the Ministry of Finance states that it will broaden its tax base by getting more taxpayers such as the self-employed to pay income tax. However, some caution should be exercised in the implementation of such a move. This is because the self-employed, for example, shopkeepers, taxi-drivers and the hawkers, while belonging to the same category of workers, may not necessarily earn the same income. The Ministry of Finance must ensure that a clear and fair set of criteria is formulated to assess the earned income of the self-employed workers. Mr Speaker, Sir, whether or not our national strategy will continue to succeed will depend on economic as well as political factors. Political stability is one of our main assets in our quest for economic growth. Hence, we have to be constantly aware of the internal threat to our political stability. The recent Far Eastern Economic Review, Asia Yearbook 1979, laments that in Singapore in 1978, "there were no great campaigns against 'Euro-communists' or fomenters of 'black operations' or other forces." We sympathise with the Review's unhappiness. But we know only too well the presence of such elements even though they have not been exposed. The Addendum of the Ministry of Home Affairs states that "the Malayan National Liberation Front (MNLF), an underground satellite organization of the CPM Central, is most active in Singapore." Thus, we have to be vigilant against the communists, as well as communalists and other anti-national elements. We cannot allow them to turn the clock back to the period of civil disorder and chaos of the mid-5O's and early 60's. When the President spoke 15 days ago, he mentioned the conflict between Vietnam and Kampuchea. Today, a new regime has been installed in Phnom Penh. This is a regional development which will have far reaching consequences for our political stability. It is regrettable that ever since colonial times, Southeast Asia as a whole has not known a period of peace and stability. After 1975, it was felt that perhaps after years of struggle for 'liberation', the governments in Indochina would concentrate on internal development and provide a better life for their peoples. In that kind of situation, the co-existence between the Indo-Chinese states and ASEAN would be mutually beneficial. The fear of the conflict in Indo-China spilling into Thailand, a member of ASEAN, exists, and if such an event occurs it will be a real threat to Singapore's political stability. It is not just the extension of the liberation movement into Thailand that concerns us, but also the Sino-Soviet dispute which is the cause of much of the turmoil existing in Indo-China. Likewise, the Soviet-Vietnamese Treaty, the Sino-Japanese Treaty, the Sino-American decision to establish diplomatic relations and the SALT discussions are all part of the moves made by the two communist giants in their confrontation against each other. Singapore cannot ignore these events because they ultimately affect our national development. The best course for Singapore is to remain non-aligned and to stay away from great power conflicts. However, this does not mean that we become passive. We have to play an active part in concert with like-minded states, especially ASEAN, to protect our national interests and those of the other ASEAN states. Here, it may be useful to reiterate the axiom, "united we stand, divided we fall." In this regard, it is heartening to note that ASEAN has continued to show solidarity in the face of external crisis. Its cooperative efforts and cohesion have impressed extra-regional powers that ASEAN is a viable organization and that it cannot be manipulated to the advantage of foreign powers. More significantly, ASEAN has displayed the willingness to cooperate on economic matters. The ASEAN Economic Ministers have made some progress in economic cooperation, e.g. increase in the items under Preferential Tariff Arrangement and the impending implementation of certain joint industrial projects. ASEAN governments must know that economic growth is the basis for their continued progress and stability. On matters which affect the ASEAN region, Singapore and other ASEAN governments should express their views clearly. I, therefore, hope that the forthcoming ASEAN Foreign Ministers' Meeting will decide on a definite stand vis-a-vis the recent developments in Indo-China, and the best way of dealing with any common threat to their peace and security. Thus, for example, we must voice strongly our concern with the refugee problem which has affected our ASEAN neighbours, viz. Malaysia and Thailand. It has been estimated that about 170,000 refugees from Indo-China have gone to Malaysia and Thailand. As a result of the changeover in the government of Phnom Penh, many more refugees may leave that country. ASEAN should press for international sanction against the states from where the refugees come. At the same time, ASEAN should persuade the liberal-minded states in the West to take in more refugees. The Ministry of Foreign Affairs Addendum states that "what serves best the interests of ASEAN and of the. world is a peaceful and prosperous Asia - Communist and non-Communist alike." A stable Asia is mutually beneficial to all the states in the region but, of course, this is a difficult goal to achieve. The reality is that in the Indo-China region, warfare has been endemic while tension is high among the countries in North-east Asia. Until we see the dawn of a new era of peace - and stability in Asia, Singapore and the other ASEAN states must strive to improve their relations with the United States, Japan, the EEC, Australia and New Zealand. The western industrial states and Japan must recognize that it is in their interests to maintain the economic development and political stability of the ASEAN states. Any change of the status quo affecting the political situation in ASEAN will be a threat to their own interests. Thus, Singapore and the other ASEAN governments must pursue the dialogue between them and these states with vigour and determination. It is not enough that these dialogues are held and pious declarations made; concrete economic and trade agreements should be the outcome of these discussions. Mr Speaker, Sir, in the ultimate analysis, it is up to Singaporeans to decide how we progress, how we protect our interests, and what kind of society we want. The President mentioned the problem of political succession and the need for quality leadership. The present leaders have gone through years of sacrifice and crisis and have built a prosperous and stable Singapore. But the young leaders have not yet faced a real crisis. How will they measure up in a real crisis? Here, I shall only quote the Prime Minister (Hansard Vol. 36, col. 448) who stated, on 23rd February 1977, "You would not know until the guns open fire." I, for one, am confident that they will not flinch from unpleasant policies, economic or political crises. Mr Speaker, Sir, leaders must have the support of the people. And the majority will support a political party that delivers the economic, social and political goods to their satisfaction. That the PAP government has done so since 1959 is beyond question. The Government achieved 10% growth per annum before the 1973 oil price hike, and an average growth rate of 6-8% in recent years. The official foreign reserves in 1977 was high; it was S$9,023 million. Our per capita indigenous GNP in 1977 was S$5,623 which is second only to that of Japan's, in Asia. Our people have jobs and only 4% or so are unemployed; public housing is provided for about 60% of our population and by next year another 10% will have such housing. We have good educational, medical and social services. Life expectancy averages 65 years for men and 70 for women. These and other economic and social indicators are readily available from the Department of Statistics for all to see and then to conclude that Singapore under the PAP government has given much to the people. And yet, as I mentioned earlier, the various Ministers strive to achieve more to upgrade the quality of life for Singaporeans. Singaporeans are justly proud of their economic status, their clean environment, the organized way of life, but they must not forget that they were achieved not without struggle. The threats prevalent in the mid-5O's and early 60's, coming from the communists, the communalists and from external events like confrontation and British withdrawal, are lessons that must be learnt and become part of our living memory. Singaporeans should ask: what would have happened if the communists had taken over Singapore, or if the communalists had succeeded in their efforts? What would have happened if Singaporeans had succumbed to confrontation and if we had looked for soft options in the face of British withdrawal? These are lessons that are part of our history. Our children and future generations must learn this as part of their course in citizenship. However, I note with regret that while the Ministry of Education Addendum states that one of its objectives is to inculcate national identity, it has not mentioned anything about such a course in its curriculum development. The Ministry of Culture should be commended for their efforts to promote the quality of life in the Republic. The establishment of the Cultural Foundation is a right step in inculcating a love for the best of Asian and western values in the fine arts. The recent Festival of Arts has shown that there is an abundance of talent in the various forms of artistic expression. This can be nurtured through the Cultural Foundation. But a proper cultural complex must be provided and, in this regard, I hope that the Acting Minister for Culture will not just consider but decide to go ahead with the construction of such a complex as soon as possible. Mr Speaker, Sir, I would like to conclude by mentioning a social phenomenon which will concern us more and more in the future. Urbanisation and industrialisation have brought with them dislocations in our various communities and also the various modern ills of a developing industrial society. The Acting Minister for Social Affairs mentions the social problems resulting from the changes in lifestyles, attitudes and expectations that come with rapid economic development. He mentions the helpless, the abandoned aged and destitutes, and women and children who have been iii-treated and exploited. The Minister for Health mentions the change in the pattern of diseases resulting from urbanisation and industrialisation and that the incidence of such diseases as lung cancer, coronary heart diseases and hypertension, and mental illness is steadily increasing. The Minister for Home Affairs mentions the drug problem, traffic accidents and the policing in public housing estates. It is obvious that the cost of maintaining services to handle these problems, the preventive, curative and rehabilitative and enforcement measures required, must be increasing - this is inevitable. But unless we contain these problems, a point may be reached when the cost will be so great that it may equal or nearly equal the production of wealth of this country. Such a phenomenon in an industrial society has been termed by a sociologist, called Henderson, as the 'entropy state', that is, and I quote: "a society at the stage where the costs of mediating conflicts, controlling crime, protecting consumers, treating victims of industrial diseases, and caring for all the addicts, dropouts, alienated, unskilled, aged, infirm or those who simply can't cope, equal or exceed the society's productive capability." (Management Review, Vol. 67, No. 9, Sept. 78, p. 43). We are not anywhere near becoming an entropy state but we must heed the warning signs. Mr Speaker, Sir, I beg to move. Question proposed. 3.15 p.m.