Mr Speaker, Sir, I wish to join my colleagues here in expressing our thanks to the President for his Speech delivered on behalf of the Government. Sir, I wish to focus my remarks on the future development of Singapore as a business hub of the region and on issues relating to the proposed privatisation programme to be undertaken by the Government. First on Singapore as a strategic business hub in the region. In the addendum of the Ministry of Trade and Industry, it is clearly spelt out that Singapore has benefitted by integrating our economy with the region. Our city state has to a major extent been a strategic business centre for the region. Since its foundation in 1819 as a trading post, it has evolved into a broad-based economy, expanding in tandem with the booming Asia-Pacific region. Recently, there has been much call for Singapore to become a global business and trading centre. Yesterday, we heard a spirited proposal by Dr Tan Cheng Bock, the Member for Ayer Rajah, for Singapore to form a northern "Growth Triangle" with Taiwan and Hong Kong. This is to complement and support the southern "Growth Triangle" of Singapore-Johor-Batam. Sir, I support Dr Tan's proposal, only to the extent that we should make it inevitable for the West to come East. However, I feel that Taiwan and Hong Kong are already prospering economies, well able to attract foreign investments on their own. What we should focus on is to work closer with our immediate neighbours, so that the ASEAN countries can be promoted as a region as a whole. Moreover, too close a liaison between Singapore-Hong Kong-Taiwan, though a natural development in view of our Confucius background, will give rise to suspicion in our neighbours. It has taken us great pains and years to foster close ties and goodwill with our ASEAN neighbours. Sir, I feel that to globalise Singapore is a very nebulous concept. Perhaps it is also too ambitious. A more tangible idea is actually to regionalise. I am totally in favour of the idea of plugging Singapore into the Asia-Pacific growth region. For this strategy to succeed, we have to promote the following areas: First, continue to foster better understanding and relations with the other countries in the region, namely, the other ASEAN countries, Hong Kong, China, India, Taiwan, Australia and New Zealand and perhaps at a later stage the Indochina nations. The basic tenet here is that for economic growth to happen, the fundamental prerequisite is a politically stable region. Hence, instead of the triangular growth concept, Singapore should become the hub with spokes reaching out to other countries in the Asia-Pacific region. This I call the "Hub & Spokes" growth concept. Second, encourage greater private sector participation in Singapore and for the private sector to reach out to the region. In this respect, the Government has to urgently look into two aspects: (a) promotion of a regional entrepreneurship, and (b) hasten the process of privatisation of Government related companies and agencies. Promotion of Regional Entrepreneurship. It has been said that globalization or regionalisation is not an easy concept to grasp and implement, because it is more of a business concept (ie, how you do business), rather than a geographic concept (ie, where you do business). What this means is that while the Government can help to stimulate the process, the impetus and action have to come from the business community. In this regard, I fully agree with Mr Schutz Lee who wrote in the Weekend 2-3 June edition of Business Times where he stated that "Entrepreneurship is Singapore's next frontier". He also commented that a shortage of indigenous industrial entrepreneurs threatens the Republic's long term economic viability. This is indeed a useful bit of reading for our officials at the Ministry of Trade and Indus- try and at the Economic Development Board. To complement the regionalisation concept, I believe that local companies and entrepreneurs have to play a pivotal role. I honestly feel that local companies and businessmen have to re-orientate their thinking of perpetually crying out for governmental support and subsidies. They have to start to think regionally. From the first day when they start their businesses, local entrepreneurs should not be too parochial and inward-looking. While subsidies and grants are helpful in the initial formative period, our entrepreneurs should quickly develop a regional business strategy that weans them from dependence on Government support and enables them to compete effectively in the wider world of the regional markets. Several of our local and larger companies are well-placed to move into regional markets, and indeed some have already done so. The main constraints to growth for Singapore today are manpower and land. However, capital is not a constraint. I feel that local companies should start to seriously consider venturing into strategic business alliances amongst themselves in the first instance, and then with appropriate partners in the other countries in the region. Such strategic alliances are well-known in the world's car industry, for example, the Chrysler-Mitsubishi-Hyundai alliance; the Ford-Mazda-Volkswagen alliance, and the General Motors-Daewoo-Nissan alliance. Similarly, Singapore companies can seek out alliances with compatible business groups in the other countries in this region, such as in Indonesia, Malaysia, Hong Kong, Taiwan or elsewhere. The Privatisation Process. Privatisation has been highly visible and in vogue in the 1980s in Western Europe. The drive was led by Prime Minister Margaret Thatcher government in Britain. Mrs Thatcher showed the way, as evidenced by the beneficial results of the change in the balance between government and the pri- vate sector in determining where a nation's economic productivity is derived. Experience around the world has demonstrated that human talent, innovation and creativity are basic to development; and human talent and effort to improve and adapt comes from the presence of incentives and rewards. Hence, growth and progress do not come from building huge monuments, factories, machines, dams or power plants; it comes from simply human effort. People have to be given incentives and rewards. This explains the eventual realisation of the failure of the communist system. Similarly, it explains the sudden recognition in the Western Bloc of the importance of the private sector as a partner with the Government in development. It is reported in the 70th issue of "Economic Impact" that in a typical modern capitalist country, a relatively small portion of the ownership of productive capital is in the hands of the government. In the United States, this figure is only 2%. In Britain, the Thatcher Government went from a rather high figure of 15-20%, down to about 8%. The percentage is much higher in a typical state-managed country. For example, in Eastern Europe, over 90% of Poland's non-agricultural sector is stated-owned or state-controlled. Similarly, other states such as Hungary are also in the high 80s. I do not think any study has been done on how much of Singapore's productive capital is state-owned or state-controlled. A rough estimate would be on the basis of manpower employed. The Government and Government agencies employ over 10% of the total workforce of Singapore. If we were to include the state-owned or state-controlled companies under the Temasek Holdings group, such as Singapore Airlines and DBS Bank, I would estimate the figure to be between 15-20%. Like Britain, I feel we should bring the figure down to about 8-10%. The Government has announced its intention to privatise the Singapore Telecom and PUB. In addition, the Singapore Broadcasting Corporation (SBC) has also invited proposals regarding its privatisation. These are laudable measures. For example, the privatisation of SBC will enable it to adopt a more flexible and appropriate compensation scheme for their staff. We know that star SBC actors and actresses are lowly paid as compared to their Hong Kong counterparts purely because SBC has to follow Government pay scales. However, in privatising the various Government agencies, may I caution that care should be taken in three aspects: (1) avoid the creation of privatised monopolies; (2) be watchful over potential price increases of essential services; and (3) the need to provide re-deployment or re-training of staff arising from possible job redundancies. Sir, I feel that the creation of a privatised monopoly is a very dangerous move. While a government monopoly can be controlled in terms of its pricing of products and services, a privatised monopoly may be overly driven by the profit motive which can therefore lead to drastic price increases. Whenever a government agency is privatised, we should generally retain the regulatory functions with the government, while more than one operational unit should be encouraged to be formed so as to create healthy competition. Again, for example, there may be a need for a commercial TV channel to be approved to provide some competition or alternative to a privatised SBC. Sir, I wish to end by touching on one other area of privatisation, and that is the proposed privatisation of the HDB wet markets. Dr Hong Hai has once described our wet markets as a "beloved institution" of the Singapore housewives. The general downtrun in the business volume in wet markets is a trend that probably will be hard for us to stop as the younger generation is more affluent and better educated working mothers would be less keen to step into the wet markets and shop there. However, there has been much concern expressed by the stallholders on the privatisation of the wet markets. This probably means that when it gets privatised, an operator will be bidding for the running of the entire market. After winning the tender, the operator will then have the right to increase rental charges of the stalls, or they may even dismiss the older stallholders and bring in new ones. The livelihood of these stallholders will be affected. Moreover, the higher rental charges could be passed on as higher prices of goods sold to the consumers, which is to the populace at large. The Government has yet to announce its plans on how it is going to privatise the wet markets but there is much concern already voiced at the ground. May I ask the Ministry responsible that, in finalising the plans for the privatisation of the wet markets, they should ensure that the livelihood of the hawkers and stallholders be safeguarded. Sir, I support the motion. 3.00 pm