HEAD N - MINISTRY OF FOREIGN AFFAIRS

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[Mr Speaker in the Chair]:

ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 2011:

TO 31ST MARCH, 2012:

(Paper Cmd. 1 of 2011): Order read for consideration in Committee of Supply [2nd Allotted Day].

[Mr Speaker in the Chair]: Head N – Ministry of Foreign Affairs

ASEAN

Mr Michael Palmer (Pasir Ris-Punggol): Sir, I beg to move,

That the total sum to be allocated for Head N of the Estimates be reduced by $100.

The ASEAN Charter came into force on 15th December 2008. According to the ASEAN website, the Charter is meant to serve "… as a firm foundation in

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achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance."

Recently, however, certain member countries of the ASEAN have been in the news for the wrong reasons. As a result of a dispute between Thailand and Cambodia over the ancient Preah Vihear temple, gunfire has been exchanged between the troops from both countries. The international community have expressed their disappointment at the fighting that erupted and this has again called into question the effectiveness of ASEAN.

I believe ASEAN managed to redeem itself with the recent conclusion of a ceasefire agreement reached between Thailand and Cambodia which was obtained as a result of the hard work of other ASEAN member countries. The ceasefire is currently being monitored by Indonesian observers while Thailand and Cambodia attempt to settle the dispute through diplomacy and mediation facilitated by ASEAN member states.

In other areas, ASEAN continues its engagement with the international community and particularly its partners: China, the United States, India, South Korea, Russia, Australia and New Zealand. Most recently, the East Asia Summit was held after the ASEAN Leaders Meeting with some 16 countries taking part in the Summit. Within ASEAN, the ASEAN Leaders’ Meeting, the ASEAN Defence Ministers’ Meeting and the ASEAN Foreign Ministers’ Meeting continue to keep the channels of engagement open between ASEAN member countries.

Given this background, may I ask the Minister to comment on the following issues:

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(i) What developments took place and what progress was made by ASEAN under Vietnam’s chairmanship?

(ii) What is the state of relations between ASEAN and its dialogue partners such as Japan, China, South Korea, Russia, Australia, New Zealand and the US?

(iii) How does the Minister see ASEAN developing under the Indonesian chairmanship?

(iv) How has the East Asian Summit developed and how will these developments impact on ASEAN?; and

(v) If the Minister could tell us a bit more about the recent dispute between Cambodia and Thailand and ASEAN’s role in getting the parties to agree to a ceasefire?

Ms Sylvia Lim (Non-Constituency Member): Sir, the tension between Thailand and Cambodia over the Preah Vihear temple flared up once again in February with mutual attacks across the disputed border, resulting in casualties and deaths on both sides. This is the fifth time that Thailand and Cambodia have engaged in low-level military conflicts since October 2008. This conflict has shone the spotlight on ASEAN as a grouping that exists first and foremost to maintain the peace between member states. This dispute is a test for ASEAN's credibility. But what role can it play in such bilateral disputes and what are the limits?

Since its founding, ASEAN has adhered to the twin principles of non-interference in the affairs of member states and a consensus building decision-making approach to guide its members' interaction with each other. How did these principles impinge on the grouping's ability to settle disputes between members since dispute settlement could be viewed as interference? Does the

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consensus-based approach effectively give each state veto power?

On the more general issue of creating an ASEAN community by 2015, it would be instructive for the Minister to provide an update on the progress of the three planks, namely, the political security community, economic community and socio-cultural community. I note, in particular, that the ASEAN's Socio-cultural Community (ASCC) is to achieve solidarity among the ASEAN nations and peoples by forging a common identity and building a caring and sharing society. The ASCC blueprint of 2009 sets out some bold objectives and activities to achieve these goals, including teaching of common values and cultural heritage in school curricular and supporting the learning of ASEAN languages.

Will the Minister share what progress has been made towards forging a common identity and better understanding among the peoples of ASEAN states? It is also not too clear how ordinary Singaporeans are being engaged in this process.

Malaysia

Mr Michael Palmer: The relationship between Singapore and Malaysia has improved considerably since Prime Minister Najib Tun Razak took office.

Following talks between Prime Minister Lee and Prime Minister Najib, the Points of Agreement signed in 1990 were modified and considerable headway has been made on two large issues. They were the railway line and the Customs and Immigration Checkpoints and the Iskandar Malaysia project.

Agreements appear to have been reached without much difficulty between the two Prime Ministers. Where no agreement could be reached, they have

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agreed to refer the matter to the International Court.

May I therefore ask the Minister if he could provide us with an update on the status of our relations with Malaysia?

What is the progress on the issues concerning the Points of Agreement?

What is to become of the unresolved issue of the development charge?

What are our chances that the issue of the development charge will go in our favour?

What is the status of the Iskandar Malaysia project? What is Singapore’s interest in the project and how are we assisting to make the project a success?

Indonesia

Ms Indranee Rajah (Tanjong Pagar): Mr Chairman, Indonesia is our largest neighbour. We have extensive economic and diplomatic relations with them. Over time, our relationship with them has had its ups and downs. I would like to ask the Minister for an update on the current state of our diplomatic relations with Indonesia and for MFA's views on the current political and economic climate in Indonesia. In particular, what steps have both countries taken on a bilateral plane to strengthen the economic and counter-terrorism cooperation? Also, if I may ask the Minister, what is the state of play with regard to the Extradition Treaty, the Defence Cooperation Treaty and the sand ban?

Myanmar

Dr Teo Ho Pin (Bukit Panjang): Mr Chairman, Sir, the release of pro-democracy leader Aung San Suu Kyi and the recent National Elections in November 2010 set key milestones in the political development of Myanmar. As a member

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of ASEAN, Singapore hopes that democracy in Myanmar will result in economic development and improvement of quality of life for the Myanmar people.

Sir, Singapore has successfully implemented the Singapore Cooperation Programme to provide technical assistance and human resource development to developing countries. To date, the training programmes have benefited many people in developing countries. Human resource development provides a key impetus in building capabilities of a country to progress. Thus, I hope that the Ministry will consider expanding the Singapore Cooperation Programme in Myanmar to further enhance the bilateral relations of Myanmar and Singapore.

Sir, I wish to ask the Minister the following questions:

(i) What is the state of relation between Singapore and Myanmar? and

(ii) Can Singapore consider providing more technical assistance to Myanmar?

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Dr Lam Pin Min (Ang Mo Kio): Sir, Myanmar is a country with more than 45 million people of at least 135 different ethnic groups. Its democracy activist and Nobel Peace Laureate, Ms Aung San Suu Kyi's recent release from house arrest has brought much optimism and anticipation that democracy can be expected soon in the military-controlled Southeast Asian nation. I would like to ask the Minister for his assessment of the political situation in Myanmar and the roles ASEAN Member countries can play to expedite to national unity and the implementation of the Roadmap to Democracy outlined by the government of Myanmar.

US-China relations

Mrs Josephine Teo (Bishan-Toa Payoh): Sir, Prime Minister Lee Hsien Loong in his

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January commentary in Bloomberg Business Week said the US-China relation was the most consequential relationship in the world today. He also noted the significant frictions in that relationship, notably over exchange rates. The Prime Minister made three visits to the United States last year. He also made an eight-day working visit to China. Newsweek magazine recently gave Prime Minister the title "the middleman", saying that Singapore managed to carve out a role as a friend to all the big powers in the region. I would like to ask the Minister for his views on US-China relations, the implications on Singapore and what opportunities he sees for small states like us to secure our interests in the international arena.

Singapore-China relations

Dr Teo Ho Pin: Mr Chairman, Sir, Singapore and China have excellent bilateral relations for 20 years. During this period, both countries have regular high-level visits of our political leaders. The people-to-people exchanges have also increased drastically, thus cementing strong ties between the two countries.

As China continues its strong economic growth, it will provide more opportunities and exert more influence on the surrounding region. Small countries like Singapore will need to establish our niche to stay relevant in a more competitive world. Thus, it is crucial for Singapore to continue to strengthen the strong foundation laid and explore more creative ways to engage China in win-win situations.

Sir, I recently went on an official trip to China. From the interactions with various Chinese leaders, I can sense that China is very keen to leverage on Singapore's brand name to expedite their economic development. At the same time,

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I also observed that China has developed many competitive capabilities which may pose serious challenges to non-productive countries. Therefore, it is necessary for Singapore to identify new areas of cooperation with, and add value to the economic expansion of China.

Sir, I wish to ask the Minister the following questions:

(i) What is the state of relations between China and Singapore?

(ii) Will the economic and military growth of China affect diplomatic relations in future? and

(iii) When are the two pandas coming to Singapore?

The Chairman: Mr Sin Boon Ann is not here. Mr Michael Palmer.

Middle East

Mr Michael Palmer: Sir, the hottest topic in the world news over the last few weeks has been the turmoil and conflict in the Middle East. This began in Tunisia with the desperate act of a young unemployed man on 17th December 2010. Mohamed Bouazizi set fire to himself when officials in his town prevented him from selling vegetables on the streets of Sidi Bouzid without permission. This set off protests about jobs in the town. It had a domino effect which no one could have foreseen. It triggered a much wider series of protests and clashes with the police throughout the country. The protests and problems in Tunisia are far from over. However, the initial protests led to the resignation of President Zine el-Abidine Ben Ali and his government.

Tunisia was only the beginning. What followed was a series of anti-government

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protests and clashes throughout many Middle Eastern and African countries. The next government to fall was that of President Hosni Mubarak of Egypt.

The significance of the protests and ultimate fall of President Mubarak's government is far greater than the events in Tunisia. Egypt is the most populous Arab state and can help determine the thrust of Arab policies – whether towards Israel or Iran or in the perennial quest for Arab consensus on issues that matter. Further, there are concerns among many western governments that the Muslim Brotherhood, the country's fundamental Islamist opposition movement, might exploit the situation to take control.

As we speak, the latest country to come under the siege of protests is Libya. As many would know, Libya's ruler of some 40 years, Colonel Gaddafi is in denial. He recently said in an interview that his people love him and there are no protests. The reality, however, is that Libya is on the brink of civil war, one in which many lives will be lost at the hands of a ruthless dictator.

The anti-government protests have led to a spike in the price of oil above the US$100 mark. This will ultimately have a long-term effect on the price of most goods and further aggravate inflation. Closer to home, our direct investments in the Middle East and Africa have also taken a hit.

In light of this, may I ask the Minister to share his views on the following questions:

(i) Have recent events that occurred in Egypt leading to the resignation of President Mubarak destabilised relations between Egypt, Israel and the United States?

(ii) The success of the protests appear to have had a knock-on effect in many

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other Middle Eastern countries. Libya is a stark example. What are some of the short-term and long-term effects we can envisage arising from these protests?

(iii) Have these uprisings had an impact on Singapore and, if so, how? and

(iv) Will the socio-political architecture in the Middle East change in the long term? If so, how will that change affect Singapore and the region?

Ms Indranee Rajah: Mr Chairman, a young Tunisia vegetable seller set himself ablaze but the whole of the Middle East caught fire. I would like to add on to the questions that the GPC Chairman had asked. I would like to ask the Minister for MFA's assessment of the recent developments in the Middle. In particular, I wish to know whether these developments are likely to have any direct impact on Singapore and the region. If yes, then in what way and to what extent.

The Senior Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Mr Chairman, Sir, the Middle East has been a very interesting region that has attracted economic interest from Singapore over the last couple of years. However, we are often subjected to global forces beyond our control. Of particular concern are the untold events unfolding in the Middle East in the last couple of months. As mentioned by my colleagues, from Tunisia to Egypt to Bahrain, to Libya, now to Yemen. The uncertainty in the region has many implications, particularly on oil prices which in turn will affect us directly.

I would like to ask the Minister for his assessment of the current situation in the Middle East and the extent this impacts Singapore. How will this affect our current strategy of engaging the Middle East? While as a small country, we are not able to do much to influence what is

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happening in the region, how can Singapore show support to the international community in managing the crisis in the Middle East? Also, what are the important learning lessons for our young Singaporeans from the unrest that we have seen in the Middle East?

Consular services for Singaporeans

Ms Ellen Lee (Sembawang): Mr Chairman, Sir, I would like to touch on the topic of consular services for Singaporeans – how to ensure that Singaporeans know where to find consular services when overseas.

Sir, many more Singaporeans go abroad for holidays nowadays and this is proven by the media reports that visitors spent a record S$90 million at the recent NATAS Travel Fair held in February 2011.

Singaporeans are venturing all over the globe. They no longer go to popular places like Europe, Asia, China, Bhutan, Africa, North or South America alone but also to other exotic, hard-to-reach and not commonly heard of places, such as the Inca Trail in Peru.

With the recent spate of natural disasters in Australia and Christchurch in New Zealand and the political turmoil in Egypt and Libya, Singaporeans are exposed to various risks which are no longer over the loss of their passports or wallets, evacuation when illness or death happened or when one is arrested by the local law enforcement agency, amongst others. Yesterday's Straits Times published two letters, one from a grateful father and uncle whose daughter and niece respectively were not contactable after the earthquake struck in Christchurch in New Zealand, and another from an equally appreciative and relieved lady who was evacuated after nine horrifying days in Egypt when the revolution erupted. All three had received

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invaluable and timely assistance from the MFA and their consular officers there.

These are good examples that highlight the importance of keeping in contact with MFA when Singaporeans travel abroad. Besides the MFA hotline and its webpage, has the Ministry intensified its efforts to ensure that all Singaporeans travellers know how to contact MFA's consular offices abroad? Would it be timely now to make it compulsory for all local travel agents to include an advisory on how to access MFA's overseas consular services to all outbound Singaporean travellers?

Dr Lily Neo (Jalan Besar): Mr Chairman, Sir, this is a much globalised world. There are more Singaporeans working and studying overseas and there are increasing numbers travelling overseas every year. The overseas trips made by Singaporeans are expected to exceed 20 million per year. As mentioned earlier by my parliamentary colleague Ms Ellen Lee, let me draw Members' attention to yesterday's Straits Times , a Singapore family showed their gratitude on MFA's assistance in locating their children when the earthquake struck Christchurch recently.

Does MFA face a greater demand for consular assistance? In view of our limited resources, how are we coping with this increasing demand? Is there a need to review our present facilities and to further strategise for a better coverage by our existing overseas missions? Perhaps, we might expand their range of scope to the neighbouring countries of their missions. Is there a need to further expand our reach to countries where we do not have Singapore embassy by appointing more local foreign representatives?

How does MFA keep track of Singaporeans overseas? And is there a need to increase the use of Information

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Technology to enhance the efficiency of our foreign missions in lieu of our limited resources? For instance, is there a need to provide better information, increased use of IRAS registration of Singaporeans travelling abroad and so on?

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Chairman, I thank Members of the House for their questions on foreign relations.

In the last year, we have been able to expand and consolidate Singapore’s external space. Peace in our region, the good relations that we enjoy with our major trading partners and the FTAs that are in place have helped our economy rebound robustly from the global financial crisis.

It is, however, not a static environment. The world is relentlessly moving towards a messier, multipolar reality. Regional and international institutions are evolving in response to a changing configuration of political, economic and cultural power in the world.

In a fluid situation, it is crucial to strengthen ASEAN. A strong ASEAN enjoying good relations with all the major powers is at the core of Singapore’s foreign policy.

Mr Michael Palmer asked about the progress of ASEAN under Vietnam’s chairmanship last year and the prospects under Indonesia’s chairmanship this year.

The key achievements last year were the adoption of the ASEAN Connectivity Master Plan and the decision to admit the US and Russia into the East Asian Summit (EAS). We also strengthened ASEAN’s engagement with some of our Dialogue Partners by separately convening Summits with Australia, New Zealand, Russia and the UN. In addition, ASEAN Leaders and President Obama met a second time in New York last September.

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Connectivity covers all aspects, not only air, sea, land and electronic connections, but also trade and investment agreements, harmonisation of procedures and border clearances. We are concerned not only with connectivity within ASEAN but also ASEAN’s connectivity with other countries. To underline the importance of connectivity, ASEAN Foreign Ministers travelled by road last year from Mukdahan in Thailand, crossed the Mekong, through Laos, through some of the most heavily bombed areas during the Indochina War, crossing the Ho Chih Minh Trail, to Central Vietnam for our retreat in Danang. And it was good to see how with peace, local communities are flourishing, villages have become towns, and towns have become cities.

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In January this year, as part of the celebration of 20 years of dialogue partnership with China, we crossed the Mekong near the Golden Triangle, trundled on fairly good roads over mountainous terrain in Northeast Laos before entering Xishuangbanna in Yunnan. From Jinghong, we caught a flight to Kunming to find Foreign Minister Yang Jiechi warmly welcoming us at the tarmac, standing in the cold. The following day, we reviewed the overall bilateral relations between ASEAN and China which are very good. And next year, we are planning a similar journey from Myanmar to Guwahati in Assam to mark 20 years of dialogue partnership with India. ASEAN Foreign Ministers are doing all this to send a message to ourselves and to others that we fully intend to link up within the region, and between the region to our neighbours.

The land links between ASEAN and China are improving by the day. Next month, China hopes to start work on the high-speed rail between Kunming and Vientiane. The Thai government has

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agreed to have this rail extended to Bangkok, and China would like this high-speed rail to go down the Malay Peninsula to Singapore.

ASEAN’s land links to India are also improving. These land links to India and China will be hugely beneficial to our economic development. What we must make sure is that air, sea and electronic links are also improved so that all countries in ASEAN, including archipelagic ASEAN, benefit from the growth of China, India and other countries farther away.

The enlargement of the EAS opens a new chapter in ASEAN’s relations with the major powers in Asia. This is a challenge for ASEAN because big power rivalry can pull us apart if we are not careful. For example, while some international attention is helpful for peaceful management of competing territorial claims in the South China Sea, internationalisation of bilateral disputes will be disastrous. ASEAN can only stay in the driver’s seat if it is friendly to all passengers and take into account their interests.

Mr Michael Palmer and Ms Sylvia Lim asked about the effectiveness of ASEAN in resolving bilateral disputes like the one between Thailand and Cambodia over land near the Preah Vihear Temple, and whether we are on track to achieving the ASEAN Community in 2015.

Following armed clashes, the most recent a few weeks ago, Cambodia raised the matter to the UN Security Council, without Thailand’s support. The UN Security Council, after discussing it, passed the matter back to ASEAN to resolve, and this became a crucial test for ASEAN, because if ASEAN showed itself to be impotent, then all our grand pronouncements would be laughed at and come to naught. An emergency meeting convened by the Indonesian Foreign Minister, Pak Marty, in Jakarta on 22nd

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February succeeded in brokering a ceasefire which will be observed on both sides by unarmed Indonesian military personnel within an ASEAN framework. ASEAN can help create an environment more conducive to bilateral negotiations between the two countries, and continuing ASEAN involvement is probably necessary.

Ms Sylvia Lim asked whether ASEAN’s principle of non-interference in domestic affairs might not make such helpful activities more difficult, and whether every ASEAN country, in fact, has veto power over the ability of ASEAN to make progress in such matters. Well, it is a balance. While we acknowledge the importance of not interfering lightly in each other’s internal affairs, there are times when showing interest in the affairs of a fellow family member is not only necessary, but morally correct. For example, in the ASEAN Charter we have provisions to establish an ASEAN Human Rights Commission, which has been established. Some say it is toothless, and it may be toothless, but it certainly has a tongue, and the tongue has moral force. When we first embarked on this many years ago, there were fundamental objections from some ASEAN countries that we should never have such a Human Rights Commission. But little by little, as we took into account each other’s concerns, we were able to move forward. While ASEAN may work on the principle of consensus, ASEAN also works on the principle of peer pressure, and peer pressure can be very effective. And it is not easy for an ASEAN member country to take a rigid position when all the other nine countries are in opposition. And in Jakarta this time, even though the Thai position was initially against having observers being involved, in the end they relented and allowed Indonesia to send observers to both sides.

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As for achieving the ASEAN Community in 2015, that is on track. 2015 is not the magic date when things happen dramatically, but it is a red line which administratively we draw across all our plans for integration – political, economic and socio-cultural. I share Ms Sylvia Lim’s hope that the importance of ASEAN will be more deeply felt by our citizens, especially the young, and we need a multi-pronged approach including lessons about ASEAN in schools, sports and cultural activities, and greater use of ASEAN symbols. For example, the ASEAN flag will fly side by side with national flags at all diplomatic missions of ASEAN countries overseas from this year, probably from ASEAN Day this year, 8th August, the day before our National Day. Campaigning for ASEAN hosting of the FIFA World Cup in 2030 is a project which we hope will unite us in a common purpose. It is a long shot and we may fail, but just the enthusiasm and working together will bring us together.

Mr Michael Palmer asked about the state of our relations with Malaysia, in particular, the progress of the Points of Agreement(POA) and cooperation on the development of Iskandar Malaysia.

Our relations with Malaysia saw a breakthrough last year. Through the joint statements of 24th May and 20th September 2010, and the exchange of letters in September 2010, the two Prime Ministers agreed on the implementation of the POA which had been outstanding for almost 20 years. On 1st July this year, KTMB will vacate from the Tanjong Pagar Railway Station and relocate its operations to the Woodlands Train Checkpoint. This is a firm deadline. A schedule of implementation has been drawn up and work on some aspects of the implementation has already started. Several developments along the main railway line including the redevelopment of Silat Estate and the expansion of One

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North business park at Buona Vista will begin after 1st July.

The only outstanding issue in the POA is the development charge issue mentioned by Mr Palmer. Both sides hold different views on whether the development charge is payable on the three original POA parcels in Tanjong Pagar, Kranji and Woodlands. We have agreed to treat this issue separately from the implementation of the POA and refer it to arbitration under the auspices of the Permanent Court of Arbitration. In this way, the development charge issue will not hold up the implementation of the POA. But it is not appropriate for me to comment on our chances because the matter is before arbitration.

Other initiatives agreed between both sides in the Joint Statement of 24th May 2010 include the joint development of a rapid transit system link between Johor Bahru and Singapore as well as Singapore's handing over the waterworks under the 1961 Water Agreement to the Johor authorities free of charge and in good working order on 31st August this year. In addition, Khazanah and Temasek will set up a 50-50 joint-venture company to undertake the development of an iconic project in Iskandar Malaysia. Khazanah and Temasek are looking to launch this project in May 2011, and the details of the project are matters to be resolved between them.

With the POA settlement, a new chapter opens in our bilateral relationship with Malaysia. We can look forward to more cooperation in different areas bringing economic and other benefits to Malaysians and Singaporeans.

Ms Indranee Rajah asked about our relations with Indonesia. Under President Yudhoyono, Indonesia enjoys political stability, steady economic growth and growing global stature. From the

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beginning, Indonesia’s leadership has been critical to ASEAN’s development. This year, under Indonesia’s chairmanship, we can expect ASEAN to take a major step forward in the role it plays internationally. As a member of the G20, Indonesia participates actively in the reshaping of the global architecture.

Singapore’s relations with Indonesia are very good. Although the Indonesian Parliament has yet to ratify the Extradition Treaty and the Defence Cooperation Agreement, which were negotiated as a package and signed by the two governments, both sides have agreed to put this issue aside for now and not let it affect bilateral relations. As for the supply of sand, the ban on exports remains in place. However, like the Extradition Treaty and the Defence Cooperation Agreement, this has not affected our overall bilateral relationship.

Last year, Foreign Minister Marty and I exchanged the instruments of ratification for the boundary delimitation agreement on the western part of the Singapore Strait. We have agreed to commence negotiations on the eastern part between Changi and Batam. We also set up several working groups to enhance cooperation in counter-terrorism, cruise tourism, air connectivity, investments and other areas. We are also strengthening our links with Indonesian provinces.

Dr Teo Ho Pin and Dr Lam Pin Min asked about developments in Myanmar and what Singapore can do to help. Following elections under the new Constitution last year, last November, Myanmar has a Parliament after a 20-year hiatus. The new President, Thein Sein, whom we knew well as Prime Minister before, is in the process of forming his Cabinet. The Army continues to play an important role in the new constitutional arrangement. It was part of the problem, but it has to be part of the solution for the future.

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We welcome the release of Aung San Suu Kyi who is now free to meet people. We have been in contact with her through our Ambassador in Yangon. We earnestly hope that she will be able to help the people of Myanmar achieve national reconciliation. This requires both hands to clap. Both she and the government have to work together. And I understand that she is in a positive spirit. Over Christmas, I met the actress Michelle Yeoh whom I have known for a long time at a social dinner. She is playing Aung San Suu Kyi in a movie directed by the famous French director Luc Besson which will be released later this year. Michelle Yeoh met Aung San Suu Kyi in Yangon and told me that she was in good spirits.

We expect the new government under President Thein Sein to liberalise the economy. In fact, the process has already begun and property prices in Yangon have gone up in anticipation of economic development. On various occasions, we have indicated our willingness to step up our assistance to Myanmar and help build up its administrative capacity through the Singapore Cooperation Programme and the Initiative for ASEAN Integration. I believe other ASEAN countries will do likewise. ASEAN has called for the lifting of economic sanctions by Western countries which, in fact, make reform of the economy more difficult. Over the years, Singapore has trained thousands of Myanmar officials and provided a range of assistance especially in the aftermath of Cyclone Nargis.

Mrs Josephine Teo asked for our assessment of US-China relations and the role Singapore can play in this relationship. The US-China relationship is indeed the most important relationship in the world today and it is a relationship which will decide the question of war and peace in Asia, if not the world, for decades to come. Peaceful relations

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between the two powers would help keep the region stable. Deng Xiaoping once said that US-China relations can never be too bad because they share too much in common but they cannot be too good either because there are many areas where there are competing interests. And I think this is the margin within which we can expect the relations between the US and China to evolve in the coming years.

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By all accounts, President Hu Jintao’s recent visit to the US was successful and stabilised relations at a time when bilateral disputes threatened to go into a downward spiral.

President Hu and President Obama jointly described the relationship as a "cooperative partnership based on mutual respect and mutual benefit". Therefore, we can be cautiously optimistic that this cooperative partnership will continue for a long time and indeed China has repeatedly said it has no wish to be the No. 1 in the world, while the US has repeatedly assured us that it has every intention to stay as No. 1.

Human rights will always be an area of contention but it is an area which the Chinese are handling in a more sophisticated way, claiming a reciprocal right to judge the situation in the US as well. The award of the Nobel Peace Prize to Liu Xiaobo has no doubt irritated the Chinese but really has no great consequence as the Peace Prize has become politicised in the eyes of many people in the world.

Singapore has an equity interest in good US-China relations and will always weigh in that direction at all regional and international forums. But I am not sure, in my response to Mrs Josephine Teo, whether we can interpose ourselves, because interposing ourselves in between two giants can land us in very tight situations. I think where we can be helpful

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we should try to be, and do no harm to that very critical relationship.

Dr Teo Ho Pin asked about the status of our diplomatic relations with China and how China's growing economic and military strength will affect these relations in the future.

Our relations with China are excellent. The official visit by Vice President Xi Jinping in November last year, making Singapore his first overseas visit after being appointed Vice Chairman of the powerful Central Military Commission of the Chinese Communist Party, was an expression of this. Our relations with China have broadened and deepened over the years, and our businessmen are now all over China, finding their own niches. Beyond political, economic and cultural cooperation, our Civil Service and the Central Organisation Department of the Chinese Communist Party also work closely together. The fact that Singapore is the only country negotiating an economic cooperation agreement with Taiwan without the Mainland objecting is also significant.

As in previous historical periods, the growth of China's economy will bring prosperity to Southeast Asia. But as in previous periods, China will not be able to establish an exclusive position for itself in Southeast Asia. China is happy to have a friendly ASEAN that is also friendly with other major powers in the world, including the US.

Competing territorial claims in the South China Sea are an issue. Such claims should be resolved bilaterally. ASEAN's interest is the freedom of maritime navigation and in seeing that bilateral disputes are resolved peacefully in accordance with international law. In 2002, China and ASEAN agreed on a Declaration of Conduct. Unfortunately, we have not yet been able to agree on the Implementation Guidelines despite many years of discussion and, without these

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guidelines, we cannot draw up the Code of Conduct. However, we are hopeful that progress will be made this year under Indonesia's Chairmanship.

As for the two giant pandas, they are scheduled to arrive early next year and will be displayed at the River Safari in the second half of the year. But if they do not produce babies, we will have a diplomatic problem.

Mr Michael Palmer, Ms Indranee Rajah and Dr Mohamad Maliki raised a number of questions about the ongoing drama in the Middle East.

Let me begin with the evacuation of Singaporeans. During the protests in Egypt, MFA worked with MUIS and our religious student association there, PERKEMAS (Perhimpunan Kebajikan Mahasiswa Singapura Di Mesir), to assist in the departure of 238 Singaporeans, 190 of whom were students in Al Azhar. Ten Singaporeans who were in harm's way in Libya have left Tripoli and we have just received a report of another Singaporean seeking to leave Tripoli, and are working to secure his safe departure. Apparently his Singapore passport has expired. Because of the large number of ASEAN citizens working in the Middle East, and there are millions of them, we have agreed among ourselves to help one another in whatever we can should the need arise. For the recent evacuation from Libya, where we have no Mission, the Malaysian Embassy provided us much assistance, for which I would like here to record our deep gratitude.

What we are seeing in the Middle East is history in the making. The downfall of President Ben Ali in Tunisia and President Mubarak in Egypt is not the end of the story by any means. In both countries, the army plays a major role in preventing Islamic extremists from taking over. Reforming institutions and creating new ones will take years. Constitutional

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democracies are not going to be established overnight, if at all.

In Bahrain, the situation is complicated by the divide between the Sunni ruling class and a largely Shiite population. All the Gulf Cooperation Council (GCC) countries worry that unrest in Bahrain can create a serious rift between Sunnis and Shiites and give an opening to Iran. Bahrain is of course also hosting the Headquarters of the US Fifth Fleet.

As for Yemen, it is a divided country with mostly Zaydi Shiites in the north and Sunnis in the south. The Zaydi Shiites are Fivers and they are different from the Jaffari Shiites of the Gulf and Iran, who are Twelvers. The Hadhramaut where most Arabs in Southeast Asia hail from is a distinct region of its own in the south of Yemen. The big fear about Yemen is its degeneration into a failed state that allows international terrorist organisations like Al Qaeda to fester. In fact, Osama Bin Laden's father came from Yemen.

Libya is beyond the pale. Ghaddhafi's unleashing of indiscriminate violence against his own people has outraged the world. It is hard to see how he can remain in power for long. What is most worrying is his apparent willingness to bring the whole country down with him. It is right that the UN Security Council has acted against him.

It is possible that the unrest will spread to other countries in the Middle East. Since becoming free from Ottoman rule after the First World War, Arab societies have yet to find a clear way to the future and many experiments, like Nasser's socialism, have failed. It is much easier to destroy than to create. Whatever new model thrown up from the present turmoil must be within the framework of Islamic values and take into

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account the tribal nature of many Arab societies.

There are widespread fears by both Muslims and non-Muslims that the Ikhwan Muslimin, the Muslim Brotherhood, will take over in some countries and impose a reactionary form of Sharia, maybe even become a supporter for international terrorism. However, we should avoid alarmist over-simplification. The Muslim Brotherhood itself has developed many tendencies and some are modernist. Turkey, which is not Arabic, offers an interesting model. And, of course, the greatest threat of terrorism is to Muslim society itself.

The Middle East Peace Process is bound to be affected. While some Israelis will be confirmed in their view that any peace agreement with Palestinians and Arabs must be guaranteed by ironclad security for Israel, which really means no peace agreement at all, others know that failure to move towards a peace agreement may create an even worse long-term security environment for Israel. For Israel, with which Singapore has strong relations, there are no good options. Not allowing the Palestinian issue from further complicating developments in the Middle East is a major security and foreign policy challenge for the US.

Singapore's economic and political links with countries in the Middle East have grown significantly in the last eight years. Bilateral trade last year reached an all-time high of $44 billion, an increase of 17% from the year before. We have to adjust to changes as they take place not as we wish them to be. In some cases, we may have to cut losses; in others, there may be new opportunities.

How Egypt moves forward will affect the entire Middle East because of its anchor position. It is good that the Supreme Council of the Egyptian Armed Forces which has taken over power from

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Mubarak has made clear that it will honour the peace agreement with Israel. If Al-Azhar re-opens as planned in a few days' time, our students may be able to return to their studies in Cairo before long. But we do not know how Al-Azhar itself will change as a result of political change in Egypt. For example, the return of Sheikh Al-Qaradawi to Cairo last week where he gave a stirring sermon at Tahrir Square, marked a turning point. Based in Qatar, Sheikh Qaradawi who was imprisoned a number of times by Nasser is one of the most important spiritual leaders in the Sunni world today.

Our most important economic links are to the GCC countries Although they are not immune to change, it is less likely that the changes in these countries will be disruptive. But we cannot be sure how history will unfold in the longer term. And there are political risks which we have to weigh carefully.

In general, Singapore enjoys a good reputation in the Middle East. We are often held up as a model of development by many countries in that region. We cherish the goodwill for us and will work hard to maintain it in a changing environment.

Whatever it is, we have to be alive to the upheavals taking place in the Middle East because they are going to affect us one way or another. Already oil prices have shot up. But much more than that, changes in the Middle East can affect the geopolitics of the world, including the evolution of Muslim society in the 21st century.

Ms Ellen Lee and Dr Lily Neo asked how MFA can provide better consular services to Singaporeans overseas.

Singaporeans are travelling much more than before for work, leisure and education. Over the last 10 years, by air

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and sea, overseas travel has increased from 4.5 million to 7.3 million, an increase of 60%, not counting land trips to Malaysia which reached almost 24 million last year. As a result, the nature and scope of MFA's consular work has grown both in volume and in complexity.

We encourage Singaporeans who travel overseas to e-register with us so that MFA can render assistance in an emergency. They can call or email MFA headquarters directly or contact our overseas Missions. We will try to help as best we can although our capabilities are limited. And it is nice from time to time to read the kind of letters that were sent to the Straits Times yesterday. Worldwide, we have 47 embassies and consulates, and an additional 27 consulates run by Honorary Consuls. They are not cheap to set up, so we have got to be careful in the way we establish new consulates. We do not have a presence in many countries and that cannot be helped. It is good that Singaporeans overseas are linking up among themselves, almost in an instinctive way.

Sir, these are interesting times. As we move towards General Elections, it is right and natural that we are preoccupied with domestic issues. However, what we do in Singapore must take into account the profound changes taking place around us, in the region and the world. The simplicity of the bipolar or unipolar world no longer exists. We are fortunate to be located geographically, economically and culturally, smack right in the middle between China and India, the two most important centres of growth in the world today. But because our economy links us in a myriad ways to the world outside, every change in the world feeds back to us directly or indirectly. Every domestic policy we debate has an external dimension. If we move with the larger tide, avoiding the whirlpools, we will sail far and our future will be bright.

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The Chairman: We still have time for clarifications. Yes, Ms Ellen Lee.

Ms Ellen Lee: I believe, in the interest of time, the Minister was not able to answer my query on whether or not it will be timely to make it compulsory for local travel agents to include an advisory on how to access MFA's overseas consular services, especially in such turbulent times and Singaporeans are still travelling for all sorts of reasons.

Mr George Yong-Boon Yeo: Sir, I would hesitate to make it compulsory because that seems high-handed, and many Singaporeans, when they are overseas, rather prefer not to get in touch with us until they run into trouble. Then they scurry. And, really, in this age of the Internet and Facebook, it is not difficult. I get requests directly from Singaporeans overseas through my Facebook account. I help when I can, but sometimes they are not entirely reasonable.

During the floods in Brisbane, one person e-mailed me to ask, messaged me on Facebook, if our embassy at Canberra could help clean up her sister's house in Queensland. But I told her we have a small Mission and it is not easy for us to do that. But by and large, the requests are reasonable and where we can, we try to help. I think what is important is that Singaporeans themselves organise self-help groups wherever we are, and make use of the technology available to keep each other in contact.

1.00 pm

Ms Sylvia Lim: Sir, I have two clarifications for the Minister concerning the Preah Vihear conflict and ASEAN's role. The solution that was reached in Jakarta – many observers feel that it is a short-term solution. But, nevertheless, it appears to have been reached primarily because of the active intervention of the ASEAN's chair, Indonesia. And Indonesia

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in this process has committed to sinking its resources to contribute to that. So, I would like to ask the Minister whether he sees this arrangement as something which was customised because of who is currently sitting in the ASEAN chair, or does it somehow set a sort of precedent for future ASEAN chairs that they should be prepared to commit resources as well to assisting in bilateral disputes and if Singapore were to be chair at that time, would we foresee sending out our Police or armed personnel into that kind of situation?

Second clarification is that the Minister mentioned that the observers were unarmed and they are currently being sent, of course, into an armed conflict, albeit ceasefire situation. So what would be the role as observers? Are they just supposed to take notes and report back?

Mr George Yong-Boon Yeo: Ms Sylvia Lim asked an interesting question about the role of the ASEAN chair. The ASEAN chair is a very hot seat. And, frankly, I was quite relieved when we vacated that chair. In this particular case of Preah Vihear, the Indonesian chair did outstanding work, running around contacting all the member countries. I myself had two telephone calls, conversations with Pak Marty, who brokered an agreement. Right up to the last moment, it was not clear that there would be an agreement and details like what the unarmed observers would do and the terms under which they are embedded are still being worked out.

Whoever is in the chair has a duty to respond. We were in the chair when the State Peace and Development Council (SPDC) government in Myanmar was shooting monks demonstrating in the streets of Yangon. The Foreign Ministers were in the UN at that time, and we had to convene an emergency meeting and express our deep revulsion at what

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happened. We did not wish it. If there were no shooting of monks, we would not have come together in such a way. But we responded to the situation. In the same way, for two to three weeks after Cyclone Nargis, there was a stand-off between Myanmar and the international community. And aid did not go in. It was really criminal because of the prospect of the second wave of deaths from disease and hunger. We, again still in the chair, convened an emergency meeting, got everybody together, persuaded the Myanmar Foreign Minister that ASEAN had to be involved. I remember that lunch vividly. He said, "Let me call back my headquarters." An hour later, he came back and said "yes". He agreed to ASEAN's involvement. So a tripartite arrangement was established and that prevented a second wave of deaths in the Irrawady Delta. We never know in the future what new problems there will be and who will be in the chair. But whoever is in the chair has the responsibility to act, and all the rest of us have the responsibility to help the chair.

The Chairman: Dr Neo, a short one, please.

Dr Lily Neo: Thank you, Mr Chairman. I would like to seek two clarifications. The Minister earlier said, with regard to the Middle East, that it is history in the making and that the Muslim Brotherhood may take over in some countries in the Middle East. May I ask the Minister whether this turn of events will affect the national security of our region, especially Singapore, with regard to Muslim Brotherhood taking over? The other clarification is this: does he expect this unrest in the Middle East to affect Singapore's economic outlook, either in the short-term or long-term basis?

Mr George Yong-Boon Yeo: Mr Chairman, Sir, this is a big subject. The evolution of the Muslim Brotherhood goes back to the early part of the last century

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when it was established by al-Banna who was killed, and later on it came under Sayyid Qutb who was executed. It had a very rough evolution in Egypt and spread beyond. Sheik Qaradawi draws from that inspiration, although I am not sure if he considers himself a member of the Brotherhood. It has been suppressed in Egypt, prevented from forming a political party but, at the same time, allowed a certain space, and his influence has gone beyond. One mutation – one malignant mutation – became al-Qaeda, but there are others which have created moderate movements which hope that Muslim society within the framework of Islam, within the framework of Islamic values, can find a way to the future, be modern, be cosmopolitan, be able to operate modern financial systems, achieve constitutional democratic arrangements, and still be productive and a model for others to follow. I would say, today, we are seeing multiple efforts made worldwide to experiment and find possible ways into the future, and it is still an open question.

The Chairman: Mr Palmer, we still have about four minutes.

Mr Michael Palmer: It is very heartening to hear our improved relations with Malaysia. But Prime Minister Najib is about to embark on a nationwide tour which has raised talk of elections across the border. As usual, Singapore takes a few shots every time a political activity heightens in Malaysia. I was wondering if the Minister would care to comment and see whether this time round, we are going to take similar shots under the leadership of Prime Minister Najib on the other side.

Mr George Yong-Boon Yeo: Mr Chairman, Sir, we have to take these comments in our stride. What is important is that in Prime Minister Najib, we have a Malaysian leader who is decisive and who wants good relations with Singapore. Settling the POA was not a simple matter.

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It took a few years of careful negotiations. A lot of it quiet, a lot of it looking for win-win political and economic outcomes on both sides, and being mindful of the domestic commentary in Malaysia. The key was Prime Minister Najib's leadership and his relationship with our own Prime Minister. I believe this will continue. I once had a discussion with a Malaysian friend. I told him that we are more likely to have our elections before theirs. He smiled. We do not know yet when it is likely to be. And I hope, and I am quite sure, that both sides will win handsomely and that this good relationship will continue.

Mr Michael Palmer: Mr Chairman, I would like to thank the Minister for his very insightful and clear analysis of the relationship of Singapore and ASEAN in the region and the world for various foreign matters. With that, Mr Chairman, I would like to seek leave to withdraw the cut.

Amendment, by leave, withdrawn.

The sum of $361,995,800 for Head N ordered to stand part of the Main Estimates.

The sum of $45,000,000 for Head N ordered to stand part of the Development Estimates.