HEAD N - MINISTRY OF FOREIGN AFFAIRS

Sitting resumed at 3.30 pm

[Mr Speaker in the Chair]:

[Mr Speaker in the Chair]: **__ ** Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head N – Ministry of Foreign Affairs

APEC

Mr Michael Palmer: Sir, I beg to move,

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

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Sir, last year, Singapore was privileged to chair APEC. And in its 20th year, we hosted various milestone events. These included the APEC Ministerial Meeting, the APEC Finance Ministers' Meeting, the APEC CEO Summit and the APEC Economic Leaders' Meeting. Singapore was showcased to the world and thousands of Singaporeans played their part proudly, hosting delegations from APEC member countries.

The theme for these meetings was sustaining growth, connecting the region. I recall hosting a table at the dinner on the final evening of the Economic Leaders' Meeting. The delegates at the table were from various member countries. I recall – some were from Mexico, Hong Kong and the United Kingdom. They sang praises of Singapore. Not only were they impressed with the organisation and hospitality that we extended, they felt that much headway had been made during the meetings. We are proud of this and deservedly so.

May I therefore ask what the Minister sees as having been achieved for APEC and Singapore during the 2009 APEC Leaders' Forum held in Singapore. What are the deliverables, going forward? The Chairmanship of APEC has been handed over to Japan. Does the Minister envisage that Japan would take APEC in a different direction or would Japan build upon work has already been achieved?

There have also been several suggestions made by the leaders of various countries in relation to the formation of different regional clusters. These include the following:

(1) An Asia-Pacific Community – suggested by Australia;

(2) An East Asia Community – suggested by Japan; and

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(3) A trilateral summit between China, Japan and South Korea.

What is Singapore's position in respect of these suggestions? Will we be supporting any one of them? What is the philosophy that we adopt in terms of the regional architecture?

ASEAN

Dr Lily Neo: Sir, we know that the economic integration among the ASEAN member states is essential for the group to realise its full potential in economic growth. Its combined market of 550 million people creating a single economic entity can benefit the region in no small way.

However, the ASEAN countries have seen a fall in Foreign Direct Investment (FDI) in recent years, except for Vietnam and Singapore, due to the loss of their traditional sources of FDI to China and India; not a surprising situation, in view of the fact that China is a market of 1.3 billion and India is a market of one billion people.

Beyond economic sphere, it is already a struggle to ensure that ASEAN's voice is heard. May I ask the Minister on his assessment on the integration of ASEAN presently? In going forward, what momentum Singapore and the other ASEAN countries should adopt to have that extra impetus?

Under Singapore's chairmanship in 2007, one of the key deliverables was for a Charter that will make ASEAN a more effective, modern and rules-based organisation. Could the Minister elaborate on the lastest development in this area?

May I also ask the Minister whether MFA collaborates closely with MTI to have an add-value enhancement especially on economic benefits to us with foreign

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countries, and whether together they could minimise duplication of efforts in order to maximise our resources.

Dr Mohamad Maliki Bin Osman: Mr Chairman, the APEC Summit last year provided excellent international recognition for Singapore and the ASEAN countries. However, the events unfolding around ASEAN in the last year or so have raised doubts internationally about the role of ASEAN as an effective grouping.

Internal political problems plagued several of its members and, in some cases, even halted meetings of its leaders as in the case of what happened in Thailand last year, when the ASEAN Leaders' Summit was halted due to the volatile political and subsequent security situation there. Myanmar is challenged with its handling of Opposition leader Aung San Suu Kyi. Indonesia, despite a successful Presidential election, is faced with challenges to key political figures. Malaysia is faced with inter-racial issues and Philippines continues to struggle with threats of rebel groups in some parts of their country. Bilateral conflicts between ASEAN countries also put ASEAN in unfavourable light as in the case of the dispute between Cambodia and Thailand.

Sir, with all these happenings in each and between ASEAN countries, what is the Minister's assessment of the international perception of ASEAN? Is ASEAN seen as a weak grouping of countries? And if so, what is the impact of this on ASEAN's role as a grouping in the region and beyond?

Some have commented that the weakening of ASEAN has led to countries like China dealing with individual ASEAN countries separately instead of as a block. Will India follow suit in balancing the power of influence and presence in the region? What is the overall implication of such a scenario on the future of ASEAN?

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Is ASEAN risking losing its relevance as a block in the region to be reckoned with?

Relations with Southeast Asian countries

Mr Michael Palmer: Sir, I would like to cover three countries in Southeast Asia which have been in the news recently. These are Malaysia, Indonesia and Myanmar.

Malaysia – on 3rd April 2009, Datuk Sri Mohd Najib was sworn in as Malaysia's sixth Prime Minister. This was following UMNO's worst defeat in the general elections since its formation. After taking over, Prime Minister Najib announced his One Malaysia plan. The plan was centred around eight values which were meant to unite the people under the One Malaysia banner. This was a direct reaction to the poor showing in the general election which had been, in part, caused by the discontent in UMNO along racial lines. Unfortunately, One Malaysia does not seem to have had the intended effect. The torching of churches and suraus has ensued and the Anwar's trial has not helped to unite the country. In light of this, may I ask the Minister what is the status of Singapore's relationship with Malaysia and how he sees Singapore's relationship with Malaysia developing, given the very fluid and seemingly uncertain political climate in Malaysia.

Indonesia – the situation was almost the reverse for President Bambang Yudhoyono. At the last Indonesian general election, he took office for a second term with a strong majority. Unfortunately, that situation has unravelled. His approval ratings are down and he is under intense political pressure over the Bank Century bailout. In last Thursday's Straits Times , it was reported that President Yudhoyono had accepted responsibility for the decisions made in respect of the bailout, even though he said that he was not directly involved. That does not seem to

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have stemmed the tide of politicians calling for their prosecution.

On the international front, President Yudhoyono has been playing up Indonesia's role in international affairs. May I ask what is the status of Singapore's relationship with Indonesia and how does the Minister see Singapore's relationship with Indonesia developing? How does the Minister see Indonesia's role in the region developing?

Myanmar – I had the privilege of travelling to Myanmar last year when Daw Aung San Suu Kyi was in the midst of her trial. I witnessed the country under serious international pressure. Since then, things have evolved and in the international community, the United States, in particular, has taken a softer, more open and engaging approach to Myanmar. May I ask what is the status of Singapore's relations with Myanmar? Does Singapore envisage that the elections will be open and fair? Has the new approach adopted by the United States in respect of Myanmar led to better engagement between Myanmar and the West? What about Aung San Suu Kyi? Will she be released in time for the elections? What steps has Singapore taken to press for her release?

The Chairman: Ms Rajah, you have two consecutive cuts. Take them together, please.

Bilateral relations with US

Ms Indranee Rajah: Sir, I would like to ask the Foreign Minister about our bilateral relationship with the United States. It has been over a year since President Obama took office. The US economy is still not quite out of the doldrums although things are looking a little bit better now than they were previously. We have close political and

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economic ties with the United States. The question is: have there been any significant changes in our relationship under the Obama Administration. We have about a year now to assess where the relationship is going and how it is developing. There is a new Ambassador who has been appointed to Singapore. How does the Foreign Minister see this relationship developing? I would also like to ask the Foreign Minister for his views on our economic and trade ties with the United States post the 2008 financial crisis.

Relations with China, India and Japan

I would also like to ask the Foreign Minister about our relationship with China, India and Japan. China and India are, of course, the rising countries in Asia. They have huge populations which are able to manufacture and produce goods much more cheaply than other countries in the region. Singapore's policy has been to engage with them rather than to try and compete on a cost level. We have tried to make ourselves useful both to these two large behemoths in the region. What I would like to ask the Minister is for his views on our political relationship with the Chinese and Indian governments and also whether he sees us deepening and strengthening our trade ties and how he sees the relationship with these two countries with whom we share a great culture and ethnic affinity developing.

Also with respect to Japan which is another strong power in Asia, what opportunities does he see for us to deepen and strengthen our ties with Japan?

Relations with China and Japan

Dr Lam Pin Min: Mr Chairman, China and Japan are key strategic partners in ensuring economic and political security in the region. China's growing influence, both economically and militarily, has also

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raised some eyebrows amongst some major powers.

Singapore enjoys good relations with China and is one of the few countries whose citizens enjoy visa-free access to China. China had also announced last year that a pair of endangered giant pandas will be delivered to Singapore as a sign of Singapore-Sino relations reaching a "new high".

Similarly, Singapore and Japan also enjoy warm and cordial relations since 1966. There is also continuous exchange of visits at the highest levels. However, the elections last year ended 50 years of rule by the Liberal Democratic Party (LDP), with the Democratic Party of Japan (DPJ) led by Japanese Prime Minister Yukio Hatoyama, taking over as Japan's new government.

I would like to ask the Minister for an update on the bilateral relations with both China and Japan, especially with the new DPJ government in Japan. How will the proposal of an East Asian community by the new Japanese Premier affect the Singapore-Japan relations and the centrality of ASEAN in the region?

Japan-Singapore relations

Mr Sin Boon Ann: I may now be reported to the Medical Council.

Sir, last year, the Prime Minister opened the Japan Creative Centre jointly with Prime Minister Yukio Hatoyama, the first of its kind in Singapore and possibly the region. The Creative Centre is meant to promote Japan's soft power and its design technology. The opening of the Japan Creative Centre signifies yet another milestone in the warm ties that Singapore enjoys with Japan.

Indeed, over the years, there has been an increasing convergence of interests between the two countries, particularly in the area of bilateral trade of which both

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are top investors in each other's country and also in foreign affairs. Like Japan, Singapore aims towards leveraging of high technology to sustain its growth and to us here in Singapore, Japan has always been the model of hard work, discipline and attention to details. There is much that Singapore can learn from Japan. One area I can think of is promotion of Green and Clean energy of which the Japanese have had a headstart over us.

In view of the common interest that Singapore shares with Japan, I would like to ask the Minister whether there are other areas that the Government is looking at that we can work more closely with our Japanese counterparts in jointly promoting our mutual interests. For example, one possibility is the promotion of joint investments overseas that would leverage on the best that the two countries can offer.

Singapore-Middle East trade and relations

Dr Fatimah Lateef: Sir, the Middle East represents a non-traditional area for Singaporeans to set up companies and have business collaborations. This has, however, been on the rise, especially in the last several years. Of late, there have also been more high profile visits by our leaders and business sector representatives to the Middle East and we, too, have hosted many of them coming here. How big is the Middle East as our trading partner and what are the future directions and targets for Singapore-Middle East cooperation? Are we planning any further FTAs with them? Also, taking into account the region's unique cultural and religious sensitivities, how well are our businessmen and companies prepared for this venture?

3.45 pm

United Nations

Mr Sin Boon Ann: Sir, Singapore's two-year stint at the United Nations Security

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Council marked a high point in our more than three decades of involvement in both regional and global organisations.

Now that Singapore's membership at the Security Council is completed, I would like to ask the Minister for an update on its longer term plans and priorities at the United Nations and, in particular, whether Singapore intends to step up its efforts to play the role of a peace-maker in conflict areas as some of the other countries have done.

G20 and Singapore's role

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Chairman, the Group of 20 has replaced the Group of 7 as the key driver of cooperation on international economic matters. Singapore is not a member of the G20. At the same time, Singapore is an active member of the 3G, the Global Governance Group, an informal coalition of small and medium UN member states which aims to channel views into the G20 process. I would like to ask the Minister how effective the 3G has been. Is there a growing risk that non-G20 members, even those in the 3G will be marginalised? What steps can Singapore take and what role can we play through and beyond the 3G to secure our interest in international agreements?

Singapore is an important financial hub and ranks among the top 10 nations in the world, in terms of our foreign reserves. Does the Minister foresee Singapore becoming a permanent member of the G20 on that basis?

Singapore in G20

Dr Fatimah Lateef: Mr Chairman, the G20 was established in 1999 as a response to the financial crisis then. The grouping brings together both advance and emerging economies to discuss measures to promote financial stability

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and of course sustainable economic growth. Following the last crisis from which we are just emerging, G20 has been striving to strengthen international cooperation and assisting in implementing sound expansionary macro-economic policies. The networking, goodwill, camaraderie and thought sharing is certainly a benefit with such groupings. How has Singapore benefited from G20 and will there be any future developments? Are there plans to implement any changes to the way the group works and implement guidelines that assist nations following the latest global financial crisis which we just experienced?

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Sir, I thank the Members of Parliament (MPs) who asked questions about Singapore's foreign policy.

Mr Michael Palmer asked about the future of APEC after Singapore's chairmanship last year and how APEC fits into the regional architecture. The APEC Economic Leaders' Meeting (AELM) in Singapore last November was successfully held, produced good results and on the whole enhanced Singapore's international reputation significantly. There was a strong spirit of cooperation which we hope will also suffuse the coming meetings, first, in Yokohama, then in Honolulu, then Vladivostok. And we are working with the incoming Chairs in particular Japan and the US in ensuring that what we have done in Singapore will be followed through into the next two venues.

As APEC accounts for roughly half of global trade and production, it is the most important regional organisation in the Asia-Pacific. Promoting greater regional economic integration and fighting trade protectionism are the major challenges in our common effort to achieve the Bogor Goals of a region of free and open trade and investment by 2010 for developed

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economies and 2020 for all the economies.

An important initiative which can help get us there is the Trans Pacific Partnership (TPP), which was given a strong push forward during the Singapore Meeting. Before US President Obama arrived in Singapore, he affirmed his Administration's support for this initiative. By drawing the US, Singapore, Brunei, Australia, New Zealand, Chile, Peru and possibly Vietnam as well into one large regional free trade area, the TPP will generate positive momentum in APEC towards the achievement of the Bogor Goals, as well as towards a possible Free Trade Area of the Asia-Pacific. Although negotiations for the TPP will not be easy, Singapore will work hard along with other countries to move the process along. APEC leadership will also be crucial as part of the global concerted effort in addressing the challenges of climate change, globalisation and macro-economic imbalances.

During the Singapore Meeting, international financial reform was a major item on the agenda. As 10 of the 21 APEC Economic Leaders had attended the G20 Meeting in Pittsburgh two months before, the discussions on financial reform flowed naturally into the Singapore Meeting.

Mrs Josephine Teo and Dr Fatimah Lateef asked about the importance of the G20 to us and of our participation in it. Singapore has a strong interest in good global governance, not least because we are a major international financial centre. We see the G20 as an important agent of positive change. For this reason, both in ASEAN and in APEC, we support strongly the G20 process and contribute in whatever way we can. Finance Minister Tharman participated in some of the meetings, and we hope to be able to continue participating in future meetings

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at the highest level possible. As a global financial centre, we believe we have a useful contribution to make. At the UN, we have helped form a group of countries called the 3G countries which means Global Governance Group, a name coined by the Liechtenstein Foreign Minister which we contracted to "3G" so that it does not sound too grandiloquent. We participate in this 3G process in order to help the G20 assume greater legitimacy in the global community of nations. It is to improve the G20's interaction with the general membership in the UN, which in turn would build wider support for G20 actions. It is important that the decisions of the G20 take into account the interest of other countries and are supported by them. The G20 process should strengthen the UN and other international organisations, not weaken them.

Mr Sin Boon Ann asked about Singapore's goals in the UN. What we do to help the G20 is an illustration of the general approach we take in the UN to improve global governance. A world governed by rules of civilised conduct, where might does not equal right, is crucial for our well-being. This was the position we took when we were in the Security Council in 2001-2002. Happily, many countries in the UN share our worldview. While maintaining good links to the major powers, we have been very active in building coalitions among smaller countries so that our interests are also protected. Over the years, we have promoted an informal Forum of Small States (FOSS), consisting of countries with populations of less than 10 million people. These countries make up half the membership of the UN. By sharing information, exchanging views and occasionally acting together, FOSS has become a significant grouping. Every year at the General Assembly, I host a makan kecil for members of FOSS. And when we meet each other, we say, half in jest, that "The FOSS is with you".

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Mr Michael Palmer asked how ASEAN is shaping the larger regional architecture. Dr Lily Neo and Dr Mohamad Maliki are concerned about ASEAN's effectiveness and its usefulness to Singapore.

Despite severe challenges last year during the Thai Chairmanship, ASEAN has not only held together, it continued to make progress, although not as much as we would have hoped for. The Charter is being implemented; the ASEAN Intergovernmental Commission on Human Rights has been established; a Committee of Permanent Representatives now meets regularly at the ASEAN Secretariat in Jakarta and 33 countries have accredited ambassadors to ASEAN; a currency swap arrangement called the Chiang Mai Initiative Multi-lateralisation was signed with China, Japan and Korea; FTAs were concluded with Australia and New Zealand, India and Korea; the first Summit Meeting between ASEAN Leaders and the US President was held in Singapore last November; ASEAN and Gulf Cooperation Council (GCC) Foreign Ministers met for the first time in Bahrain; we embarked on a major project to draw up a masterplan for connectivity along all dimensions, within ASEAN, and between ASEAN and the wider region; and a comprehensive FTA with China came into force at the beginning of this year, by far the biggest market in the world encompassing a combined population of almost two billion people.

Relative peace in the region and the enlargement of our economic space have made possible Singapore's continuing economic development. For this reason, a strong ASEAN is at the heart of our foreign policy and our economic policy, and both MFA and MTI work very closely together to ensure that our objectives are met and our interests safeguarded. Singapore and a number of other ASEAN countries would like to see the ASEAN

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Flag flying side by side with national flags at the overseas missions of all ASEAN countries in the world. And I hope we can do that by the time we establish an ASEAN Community in 2015.

The major powers are all friendly to ASEAN and want to see us do well because our unity and development are in their interest. All of them see ASEAN playing a central role in the evolution of the regional architecture. At the G20 Summits in London and Pittsburgh last year, the ASEAN Chair was invited because of the importance given to ASEAN as a regional grouping. This recognition of ASEAN's role is in fact a triumph of our diplomacy but it also puts on us a heavy responsibility to pull our weight and respond in a timely way to new challenges and I think it also puts a particular responsibility on us to resolve our bilateral problems in a peaceful manner.

Mr Palmer and Dr Lam asked specifically about ASEAN's response to Japanese Prime Minister Yukio Hatoyama's proposal for an East Asia community and Australian Prime Minister Kevin Rudd's proposal for an Asia-Pacific community, both with small "c"s. At our recent retreat in Da Nang, ASEAN Foreign Ministers affirmed the centrality of ASEAN. To the extent that new proposals strengthen, not weaken, ASEAN and our position in the regional architecture, we are prepared to consider them with a positive spirit but our strong preference is to be in the driver's seat, not because we think we are the best driver, but because we are the driver acceptable to all the passengers. And we are working with Vietnam and we strongly support Vietnam as the present ASEAN Chair as we now strive to do all the things necessary to establish a full-fledged ASEAN Community by 2015.

Mr Palmer asked about the status of our bilateral relations with Malaysia and

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Indonesia, and about the situation in Myanmar.

Under Prime Minister Najib, our relations with Malaysia are very good and their domestic challenges do not really affect this bilateral relationship. In May this year, Prime Minister Lee and Prime Minister Najib will be having a retreat to discuss how we can strengthen bilateral cooperation.

I have been in discussion with Foreign Minister Anifah on the implementation of the Points of Agreement on Keretapi Tanah Melayu Berhad (KTMB) land and I am hopeful of a win-win outcome which will open up new areas of cooperation between the two sides. In particular, through the Joint Ministerial Committee, both sides have been discussing further cooperation in Iskandar Malaysia, including Singapore's investment in an iconic project and the possibility of linking the two urban rails together.

Support of the Johor ground is a necessary pre-condition. When Minister Mentor Lee Kuan Yew visited Johor Baru to pay his final respects to the late Sultan of Johor, the new Sultan, Sultan Ibrahim, expressed clearly his wish for stronger relations between Johor and Singapore. Our new consulate in Johor Baru is already busy with work.

On Indonesia, the re-election of President Susilo Bambang Yudhoyono last year was good for bilateral relations. Prime Minister attended his inauguration in October and President Yudhoyono made a bilateral visit to Singapore the following month. Earlier in the year, I signed an agreement to de-limit the maritime boundary in the Western part of the Singapore Strait with Foreign Minister Hassan. Later this year, Prime Minister and President Yudhoyono will hold a retreat to review our bilateral relations and explore new areas of cooperation. As to whether the present challenges in Jakarta,

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particularly on Bank Century, will affect our bilateral relations with Indonesia, I do not think so. But these challenges reflect a post-Soeharto, much more fragmented power structure in Indonesia which is a new reality we have to accept and work with. It means not only dealing with Ministers and leaders in Jakarta, but also with different branches of government, and with local governments at the provincial level, and at the level of the kabupaten .

4.00 pm

This will be a critical year for Myanmar.

At long last, elections will be held under a new Constitution that guarantees a continuing strong role for the military in Myanmar politics. The present Government promises that the elections will be "free and fair". Critical to its legitimacy will be the spirit of national reconciliation among the many ethnic groups in the country and the participation of the National League of Democracy and other opposition parties. We know there are ongoing discussions between Daw Aung San Suu Kyi and the generals, and hope that both sides will show flexibility and compromise. Singapore supports the ASEAN position calling for the release of Daw Aung San Suu Kyi and her participation in the coming elections.

If there is no reconciliation and the elections outcome is not seen as legitimate, especially by Myanmar's neighbours, then ASEAN will have a problem. At the ASEAN Foreign Ministers' retreat in Da Nang, we expressed our concerns and our hopes in no uncertain terms to the Myanmar Foreign Minister.

Bilaterally, our relations with Myanmar are good. Myanmar Prime Minister Thein Sein made his introductory visit to Singapore in March last year and Senior Minister Goh Chok Tong visited Myanmar in June 2009 at the invitation of Prime

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Minister Thein Sein, and in Nay Pyi Taw, he also met Senior General Than Shwe. Singapore continues to do our part in helping Myanmar build up its capacity. We have provided technical assistance through the Singapore Cooperation Programme (SCP) and under the Initiative for ASEAN Integration.

Ms Indranee Rajah, Dr Lam Pin Min and Mr Sin Boon Ann asked about relations with the US, China, India and Japan. Our links with the Obama Administration are very good. Our relations with the US have remained stable, positive and warm. There continues to be high-level exchanges between both sides. The slowdown in the US economy has not affected Singapore-US economic ties in a significant way. The strong economic relationship is underpinned by the Singapore-US Free Trade Agreement (FTA) which came into force in the year 2004. Although two-way trade fell from S$86 billion in 2008 to S$67 billion last year, the decline is consistent with the overall decline in global trade. The US remained our third largest trading partner in 2009, after Malaysia and China, and both Singapore and the US are also significant investors in each other's countries.

President Obama, together with several members of his Cabinet, visited Singapore for the APEC Leaders' Meeting in November last year. At the invitation of President Obama, the Prime Minister will be visiting the US in April to attend the Nuclear Security Summit.

Despite many preoccupations, the US has made efforts to re-engage ASEAN. President Obama's attendance at the first US-ASEAN Summit despite his concerns about Myanmar, and Secretary of State Hillary Clinton's regular attendance at ASEAN meetings have sent a strong signal which is appreciated throughout the

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region. Later this month, President Obama will be making an official visit to Indonesia, where he spent a part of his childhood, and will have the opportunity to use his Bahasa.

All of us in ASEAN know that we need a strong long-term US presence in the region for our continuing peace and development.

Our bilateral relations with China are excellent, underscored by strong economic ties, regular exchange of visits by leaders on both sides and a high level of people-to-people exchanges. President Hu Jintao's first State Visit to Singapore last November has raised our bilateral relationship to a new level. Four MOUs were signed during the visit which included the establishment of a China Cultural Centre in Singapore and the loan of a pair of giant pandas. We also celebrated the 15th Anniversary of the Suzhou Industrial Park last May.

Over the years, we have steadily broadened and deepened our relations with China through various bilateral mechanisms like the Singapore-China Joint Council for Bilateral Cooperation. Last year, we announced a three-way collaboration involving the new Singapore University of Technology and Design, the Massachusetts Institute of Technology and Zhejiang University. We launched the China-Singapore Forum on Leadership Selection and Development, which is a new platform enabling political leaders and senior officials from both sides to exchange experiences and ideas on leadership development. We also established the Singapore-Guangdong Collaboration Council (SGCC) which will open new opportunities for our companies in the Pearl River Delta – one of the fastest growing regions in China.

This year marks the 20th Anniversary of the establishment of diplomatic relations with China and it is a significant

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milestone in our bilateral relationship. Both sides are jointly planning a series of commemorative activities to mark the occasion, and we look forward to the ground-breaking for the China Cultural Centre in Singapore. Singapore is also participating in the Shanghai World Expo. The Singapore Pavilion will showcase our "urban harmony"; an area where we have shared our experience with China over the years.

Our bilateral relations with India are also excellent and multifaceted. All the major pillars of our bilateral relations – political, economic, defence and regional cooperation – have grown stronger. Institutional linkages have been established across several sectors at various levels and each side has become a significant investor in the other. Although bilateral trade declined with the global economic downturn last year, this is temporary. Defence and security exchanges have continued apace. In terms of people-to-people relations, tourist figures both ways remain healthy, and there have been frequent exchanges among scholars. Just yesterday, I was talking to Mr Iswaran about the new Integrated Resorts (IR) and how it will greatly increase the number of Indian tourists coming to Singapore. They are now talking about perhaps even two million tourists from India every year. We are now working on new areas of cooperation in education, culture and urban management.

The new DPJ Government has broken a long period of LDP rule, a point made by Dr Lam Pin Min, the full implications of which are still not clear. Regardless, we expect Singapore-Japan relations to remain strong as we share many common strategic interests. Bilateral relations have also broadened in recent years to include cooperation in various non-traditional areas such as defence, anti-piracy and export control. In fact, there is such an ease in relations that when Ministers and officials meet, we can discuss new areas

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of cooperation. Last year, President Nathan made a State Visit following the successful visit of Emperor Akihito and Empress Michiko to Singapore in 2006. The Prime Minister also made a working visit to Japan last October. And the Prime Minister was one of the first foreign leaders to meet with the new Japanese Prime Minister. The Prime Minister's visit also set the stage for future cooperation in areas like green technology and ensuring a global free trade system through the APEC agenda. In addition, during Prime Minister Hatoyama's visit to Singapore last November to attend the APEC meeting, the Japan Creative Centre was launched by the Prime Minister and Prime Minister Hatoyama. And we hope that through this Centre, we can help Japan increase its soft power in the region. These visits and initiatives symbolise the close relationship between our two countries.

Dr Fatimah Lateef asked for an update of our Middle Eastern account. On the whole, it is growing nicely. In fact, from not very much six years ago, we now manage a sizeable portfolio, all the way from the Maghreb to Iran.

Non-oil domestic exports in the Middle East have doubled from about S$2 billion in 2003 to S$4 billion last year. Our direct investment in the Gulf countries has quadrupled from S$213 million in 2003 to S$850 million in 2008. Our companies have secured S$25.5 billion worth of projects in the Middle Eastern region in total. New projects in the Gulf include Sembcorp's S$1.5 billion project to build an integrated water and power plant in Salalah in Oman. And beyond the GCC, we have also made good progress in Libya where we secured projects worth some S$4.3 billion in the past two years.

FDI from the GCC has also increased significantly, totalling S$2.3 billion last year. We hope to attract much more. The GCC has become a major economic

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partner of Singapore and we hope, eventually, with ASEAN as a whole. Last year, the GCC countries were collectively Singapore's nineth largest trading partner comprising 5% of Singapore's total trade. Underpinning our engagement of the GCC are various economic agreements, including the GCC-Singapore Free-Trade Agreement, various investment guarantee agreements and various double taxation agreements, or should I say, avoidance of double taxation agreements, and a number of bilateral platforms with Qatar, Oman, Abu Dhabi and Kuwait. And in May this year, Singapore will host the second ASEAN-GCC Foreign Ministers Meeting.

President Nathan made state visits to Qatar, Oman and the United Arab Emirates in March last year. Senior Minister Goh visited Oman and Bahrain this year, and is planning more visits to the region later this year. We also received a state visit of the Amir of Qatar in May last year, and a visit by the Crown Prince of Abu Dhabi in August. Right now, at the Asian Civilisations Museum, we have a beautiful collection of Mughal jewellery from the Kuwaiti palace, and even as we speak right now, there is an Omani dhow, sailing across the Arabian Sea to Cochin–the Jewel of Muscat, a generous gift from the Sultan of Oman, which is sailing with the monsoon to Singapore, retracing an ancient voyage which took place over a thousand years ago. People-to-people exchanges have also increased. In particular, inbound tourism from Saudi Arabia has increased by 7% from 2008 to 2009, and has quadrupled since 2002.

In this new age of globalisation, space is opening up all around us. Although there are many challenges in the international and regional environment, we can find in them new ways to make a living. This is the new context in which

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we seek to restructure the Singapore economy. We need sensitive antennas to detect new trends and comprehensive responses to threats and opportunities. The mission of the Foreign Ministry is to expand the external political and economic space for Singapore's continuing development.

Mr Chairman: Any clarifications? Mr Yeo, you can carry on if you want to, as we still have time.

Mr George Yong-Boon Yeo: I am done, Mr Chairman.

Mr Chairman: Technically, you are done but you can carry on.

Mr George Yong-Boon Yeo: Unless there are questions raised by Members which I have not adequately answered.

Mr Chairman: We still have a lot of time. Any clarifications or questions? Yes, Mr Palmer,do you want to withdraw your amendment?

Mr Michael Palmer: Mr Chairman, Sir, it was obviously an astute, clear and concise answer which requires no further clarifications. I would like to thank the Minister and his team for delivering on a subject which is not easy to get across to the people not in the know.

On behalf of the GPC, to the Minister –

Mr Chairman: You can go ahead and make your speech if you want to.

Mr Michael Palmer: I thought I had a bit of time. On behalf of the GPC, to the Minister and his team, we say may the "FOSS" be with you. And, Mr Chairman, Sir, I am heartened to note that we have settled Mr Sin Boon Ann's status given Mr Sin's gravitas and abilities on and off the green to assume that he is a doctor would certainly not be a sin.

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With that, Mr Chairman, may I seek your leave to withdraw my amendment?

Amendment, by leave, withdrawn.

The sum of $392,296,000 for Head N ordered to stand part of the Main Estimates.

The sum of $44,750,000 for Head N ordered to stand part of Development Estimates.