HEAD N - MINISTRY OF FOREIGN AFFAIRS

Head N - Ministry of Foreign Affairs

The Chairman: Head N – Ministry of Foreign Affairs. Ms Indranee Rajah.

Regional Architecture and ASEAN

Ms Indranee Rajah (Tanjong Pagar): Sir, I beg to move,

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

Mr Chairman, we are in the midst of what has been described as the worst financial crisis that the world has ever seen. No country has been left unaffected, mostly the countries in Southeast Asia and in the region. Economic crises inevitably have a political impact. Could the Minister give us his view on what impact the financial global crisis has had on the countries in the region in political terms, and whether he thinks that this will affect Singapore's relationship with our regional neighbours?

Could the Minister also update us on ASEAN? There continues to be question marks in ASEAN's effectiveness as a regional grouping, both in terms of its direction and its ability to enforce collective decisions. If ASEAN wishes to maintain its credibility, then it must demonstrate its relevance to the evolving regional architecture. I would also like to ask the Minister to tell us what progress ASEAN has made in the past year and what progress he thinks it is likely to make in this year and what is ASEAN's key priorities. Also, what is the current state of play with respect to the ASEAN Charter? Are its provisions being implemented?

There has also been much talk of ASEAN integration of an ASEAN

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community. The general feeling, however, is that while member countries are friendly, we have not yet reached the stage where there is a distinct identity as an ASEAN community. Could the Minister comment on what efforts have been made towards ASEAN community building?

ASEAN Integration

The Senior Parliamentary Secretary to the Acting Minister for Manpower and Minister for Health (Mr Hawazi Daipi): Sir, ASEAN is one of the cornerstones of Singapore's foreign policy. As a founder member, we have played a significant role in the development of regional cooperation within ASEAN and between ASEAN and the wider world.

When Singapore was Chairman of ASEAN last year, we helped paved the way for the 10 member countries to adopt the ASEAN Charter, which has been individually ratified by all members. Can the Minister give the House an update on the progress of ASEAN integration, which is one of the core purposes of the Charter? At this moment, when the world is in economic turmoil, I cannot help but feel that ASEAN may not be strong enough to collectively manage the problems. It seems that the world has changed faster than ASEAN can cope with or respond to. The ASEAN Summit could not be held as scheduled at the end of last year, delaying any joint efforts to respond to the global recession. Sir, may I ask the Minister what is Singapore's assessment of the state of ASEAN integration now, and what should be the strategy to achieve integration and a higher level of cooperation?

On a related matter, I would like the Minister to give his assessment on whether ASEAN is cohesive enough to be a key player in the regional political and security architecture.

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ASEAN

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Sir, 2008 marked the milestone in ASEAN's development as a regional grouping with the completion of full ratification of the ASEAN Charter. It brings promise and hope for a stronger grouping, making its mark in the world stage.

Sir, in the face of this optimism, ASEAN was greeted with various serious challenges in 2008. Individual member countries continued to be faced with various domestic, social and political problems. For example, Myanmar's refusal to allow foreign aid during the cyclone nine days' calamity, the Philippine legislators attempting to impinge their President and, most recently, the political standstill in Thailand.

Apart from the individual member countries facing unique domestic issues, ASEAN is also faced with the challenge of disputes between member countries. For example, the dispute Thailand and Cambodia over a patch of land where a historic temple could have turned into war if they started shooting at each other.

Sir, the current global recession is not going to make it easier for ASEAN. While we continue to uphold the core principle of non-interference in domestic affairs of member countries, ASEAN must also be mindful of the effect of these domestic affairs on how the larger world views ASEAN and its credibility. For example, Singapore effectively played its role as Chair of ASEAN but Thailand's current chairmanship has been gritting with ASEAN's inability to hold its annual summit. I would like to ask the Minister for his assessment on how ASEAN is being viewed as a regional block in the last six months, and what more can be done through the Charter to strengthen ASEAN itself and to continue on its course.

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Bilateral Relations with Neighbouring Countries

Mr Hawazi Daipi: Sir, I would like to ask the Minister a couple of questions. First, whether he can give an update on the state of bilateral relations with Malaysia, Indonesia and Thailand, three of our closest neighbours, with which we have had very strong relationship but we also have some bilateral issues with them. Are we managing the issues or are we all resolving some of the issues in the coming year?

Second, I would like the Minister's assessment on our relationship with two of the emerging powers in the region in Asia – China and India. With all the five countries, how are we managing bilateral issues amidst the political and leadership changes in these countries?

The Chairman: Mr Chiam See Tong is not here. Ms Rajah.

APEC

Ms Indranee Rajah: Mr Chairman, Singapore assumes the Chairmanship of APEC this year. This presents us with a unique opportunity to engage APEC partners and play an important role in Asia-Pacific cooperation. Could the Minister update this Parliament on what Singapore's plans for APEC are this year, and how we intend to contribute towards building a stronger APEC? Could the Minister also comment on APEC's overall vision of reducing trade barriers and promoting cross-border investments?

In the current global economic environment, is it the automatic tendency of countries to gravitate towards projecting domestic markets? But Singapore's approach has always been one of free trade. Could the Minister expand on what efforts Singapore will be making to promote free trade, both as a member as well as Chairman of APEC? And so far,

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we have entered into a number of bilateral free trade agreements. Could the Minister update us on recent ones and also indicate if we have plans to enter into more free trade agreements and, if so, with which countries?

Ms Irene Ng Phek Hoong (Tampines): Sir, the APEC meeting in November will come at a time when many countries will feel the domestic pressure to be protectionist, given the global recession. Just witness the debate on the "Buy America" plan in the US right now.

The meeting in Singapore will also come at a time when Singaporeans will be very worried about their jobs and the country's economic prospects. Singapore, as APEC's Chairman this year, can play an important role in helping to bring together the world's three largest economies – the US, Japan and China – to discuss how they can jointly boost global economic growth and facilitate transpacific trade at this challenging time. The 21 economies of APEC together constitute 55% of the world's GDP and 50% of world trade. We expect world leaders, including US President Barack Obama, to gather in Singapore for the meeting. We must make full use of this opportunity to give a renewed impetus to further trade liberalisation. Much will depend on the new ideas and the direction that the countries, especially the host Singapore, will deliver.

Can I ask the Minister what progress can Singaporeans expect from APEC besides the road closures and traffic jams? If there is a way that we can make sure that APEC will hit a high note for Singapore during this downturn, I am sure Singaporeans will support fully the organisation of the APEC and help to make it a success. On the part of the MPs, I am sure that we also support MFA and are proud that we are hosting the APEC meeting this year.

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I would like to ask the Minister on how Singapore intends to position itself as an important partner in APEC, despite its small size, especially during its chairmanship this year. I urge the Minister to marshal all our resources to play a role as a catalyst and an opinion leader in shaping the consensus towards greater liberalisation and to strengthen the institution of APEC.

I would also like to ask the Minister what strategic issues will likely be at the forefront given that many world leaders will be here and many will be having meetings from the sidelines, including with Singapore.

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Bilateral Relations with US, China and India

Ms Indranee Rajah: Mr Chairman, I would also like to ask the Minister for an update of our relationship with US, China, India and Japan. The US has a new administration. Singapore has had a good relationship with the former Bush Administration, and under that Administration, we saw the strengthening of Singapore-US ties, including the signing of US-Singapore FTA. Does the Minister foresee any significant change in our relationship with the US under the Obama Administration? The "Buy American" clause in the proposed US$800 billion package has attracted some criticisms from the European Union and has prompted President Obama to indicate that he would review the clause. Do we anticipate that the US is now likely to be more protectionist in terms of trade and, if so, will that affect Singapore?

Also, how does he see our bilateral relationships with China and India panning out this year? What are our challenges with these two countries and what plans do we have for engagement? Finally, could the Minister update us on Japan and our relationship with Japan, as it is our sixth largest trading partner?

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Singapore-US Relations

Mr Michael Palmer (Pasir Ris-Punggol): On 20th January 2009, the 44th President of the United States of America was sworn in. President Barack Obama was sworn in before a crowd of nearly two million people gathered in Washington. President Obama is the first of African-American to hold the office of President of the United States of America and his election into the office was a milestone of not only for America but for many countries around the world.

Until the start of his presidential campaign, we had heard very little if anything about President Obama. In fact, he was only elected as a junior United States Senator in 2005 and served only three years as a Senator before resigning to run for the office of President. His connection to Asia emanates from the time he spent in Indonesia as a child. President Obama attended local schools in Jakarta until he was 10 and then returned to the United States.

In respect of foreign policy, President Obama has said very little about his position with regard to ASEAN, or any of the ASEAN countries. Thus far, the bulk of his foreign policy position has been dedicated to the US troops in Iraq and their systematic withdrawal, the fight against terrorism and the Israeli-Palestinian conflict in Gaza. I do not believe he has publicly stated his position on ASEAN or Southeast Asia.

May I therefore ask the Minister to share his views on the following issues: How does he think US-ASEAN relations will develop under President Obama? While Singapore shared close ties with the US during President George W. Bush's administration, will ties remain close under the new President? Singapore was regarded as a hub for ASEAN during President Bush's term of office, with the President visiting Singapore three times while in office. Will Singapore continue to

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play that same role under the new President? Will the US-Singapore ties grow and improve under President Obama's presidency? Are there other areas which Singapore should be concerned about with the new US President in office?

Our Relationship with China and Taiwan

Mr Ang Mong Seng (Hong Kah): ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Chairman, since its liberalisation in 1978, China has been playing more and more important roles in international politics, economics and diplomacy over the past 30 years.

Singapore and China have built up very good bilateral economic trade and diplomatic relations. Last year, when PM Lee Hsien Loong visited Beijing, Premier Wen Jiabao described the relationship between China and Singapore as "friendly, cooperative and creative". It is very meaningful. Recently, with the world going into recession and the international situation going through many changes, Premier Wen Jiabao, during his visit to Europe, reminded countries all over the world not to look just after their own domestic well-being but to spare a thought for others as well. He emphasised that all countries, big or small, should complement one another through good economic and diplomatic policies. Only then, can we overcome this crisis.

Recently, there are significant changes on the economic and political landscapes. Obama has become the new President of the United States and Ma Ying-jeou has become the new President of Taiwan. There may be some new political and diplomatic developments. I would like to ask the hon. Minister, under such circumstances, what would be the new development trends in the economic trade and diplomatic relations between Singapore and China. How do we balance our relationship with China and Taiwan?

*Cols. 2275-2276.

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Middle East

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, the months ahead may see the interesting development in the Middle East, in terms of politics and economic development. The new leaders in the White House are putting out the olive branch to the Muslim world which may, hopefully, result in gradual rapprochement. But it will be naive to think a magic carpet solution to the issues.

The Middle Eastern economies have demonstrated sustained economic boom and immense opportunity in non oil, non traditional sectors, such as construction, retail, transportation, logistics, water treatment, infrastructure and city planning. But, today, as the world grapples with the fallout from years of mismanagement of financial policies, Middle East states, like Dubai, Qatar, Abu Dhabi and others who had benefited from the oil wealth are also beginning to feel the "heat", hotter than the desert heat. No doubt, they will see their wealth shrink because of their investment in various decaying financial assets, but their oil wealth has provided some comfortable cushion.

Singapore has a good working relationship with the Middle East. Several high level Ministerial visits were made, including a tour by our President to Egypt and Jordan. However, as an article in the Arab English Language daily, Arab News , stated it was a good start but more must be done. I hope the Minister can update the House on the progress of our efforts to strengthen relations and open new platforms between the Middle East countries and Singapore. I believe some of the opened doors have resulted in mutual beneficial economic gains but I think not enough is done to promote cultural exchanges and the people-to-people contact, including tourism. Has Singapore companies benefited from the

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improved relationships with the Middle East countries? Has our companies penetrated the Middle East countries for all the opportunities that they provide?

Singapore having built its reputation as an international financial centre with world-class facilities can play a pivotal role in providing services and support to facilitate trade relationship between Asia and Middle East countries.

Sir, as a result of the warm relationship, the Middle East Institute, which is an autonomous research institute within the National University of Singapore, was established. To-date, several talks by distinguished speakers have been organised to benefit scholars with insights on the Middle East. I hope the Minister can also provide us with some update on how else can this Institute help in promoting a better understanding of Middle East. What are the other exchanges planned for the coming year with the Middle East countries?

Dr Mohamad Maliki Bin Osman: Mr Chairman, Sir, the Middle East was rocked by the escalation of violence in the Gaza Strip in December 2008. It was reported that the three-week onslaught of fire power resulted in over 4,300 Gazians wounded, some 1,300 killed and about 900 of them were civilians. On the Israeli side, it was reported that 10 Israeli soldiers and three civilians were killed with 500 wounded.

Sir, whatever the reason, violence cannot be condoned. The death of many innocent lives is a stark reminder that international disputes must be resolved through diplomatic and other means. The role of the international community is critical in this regard. The United Nations issued a resolution for the violence to cease immediately. Unfortunately, it seems to have fallen on deaf ears. Why

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did this happen? Is there a gradual role by the UN in ensuring peace in the Middle East? Sir, I would like to ask the Minister what else can a country like Singapore do. We have often taken the position that we encourage the disputing parties to exercise restraint. But is this insufficient? We have been compared to our neighbouring countries to have issued more strongly worded statements. At the international level, can there be a stronger international influence in finding immediate and longer term solution to the conflict in Gaza?

Sir, the Middle East conflict has been going on for a long time, with various attempts by different world leaders at brokering a peace agreement. We will never know when the next escalation of violence will occur and how many more innocent lives will be lost. And each time it happens, we will not know the extent of public sympathy or anger that may generate here or in the region. I seek the Minister's comments on what role Singapore can play in efforts by the international community to reduce the violence and manage the conflict in the Gaza Strip.

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Chairman, Sir, let me first thank Members of this House for their comments and questions on Singapore's external relations.

We live in dramatic times. In the coming months, the global economic crisis will cause millions of people to lose their jobs around the world. In some countries, mass unemployment will lead to political crisis. Over the next few years, there will be a major re-pricing of assets, of factors of production, of entire countries, even of ideas. Out of all this will emerge a multi-polar world with China, India, Russia, Brazil and other countries sharing power with the West and Japan. The US will,

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however, remain the leading power for a long time to come.

In this shifting configuration, we are presented with both threats and opportunities. The tides are changing in a complex and uncertain way. Unless we adjust comprehensively and reposition ourselves nimbly, we may miss the flow and be stranded high and dry.

Whatever the scenario, however, the strategic importance of ASEAN is unchanged. Indeed, ASEAN will become more essential to all the countries of Southeast Asia, as China and India re-emerge as major powers on the global stage.

Ms Indranee Rajah and Mr Hawazi asked about the progress of ASEAN; Mr Maliki expressed concern about the delay of the summit meetings. All worried about ASEAN's credibility.

Despite domestic political problems in some member states, the political will for a strong ASEAN among all 10 member states remains firm. Despite significant disagreements at first, we were able to draft the Charter and get it ratified at the end of last year. Despite doubts and difficulties, we are not only implementing the Charter in a determined way, we are also consolidating the larger regional architecture around ASEAN. I refer, in particular, to ASEAN+3, the EAS (East Asia Summit) which draws in India, Australia and New Zealand, and the ASEAN Regional Forum. In addition, ASEAN also plays an active role in ASEM (the Asia-Europe Meeting) and FEALAC (the Forum for East Asia-Latin America Cooperation). And last year, we held the first ASEAN-MERCOSUR Meeting of Foreign Ministers in Brasilia. This May, the first ASEAN Foreign Ministers' meeting with the Gulf Cooperation Council Foreign Ministers will be hosted by Bahrain. To coordinate the vastly increased workload, the ASEAN Secretariat, under the

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energetic leadership of Dr Surin Pitsuwan, is being strengthened and the ASEAN Charter is being implemented.

It is true that the Thai chairmanship of ASEAN has been affected by domestic political discord. The ASEAN Summit has had to be postponed from December last year to the end of February this year. That could not be helped. Because of the conflicting travel schedules of leaders, the Chair has not yet been able to fix the dates for the ASEAN+3 Summit and the EAS. This is not good because urgent decisions, like the increased currency swap lines under the ASEAN+3 Chiangmai Initiative, have got to be made. But we must persist in supporting the Thai government and making sure that ASEAN continues to push forward in the face of the global economic crisis.

Singapore's chairmanship of ASEAN from July 2007 to July last year turned out to be more eventful than we had planned for. We were able to progress the ASEAN agenda well enough, especially the drafting of the Charter. What intruded unexpectedly was the violent crackdown on peaceful demonstrators, including Buddhist monks, in Myanmar in September 2007. ASEAN Foreign Ministers were in the UN for the General Assembly at that time. We had to convene an emergency meeting to express our collective revulsion. We also supported the use of the Good Offices of the UN through the Gambari mission. However, the Myanmar government objected to Prof. Gambari meeting ASEAN leaders during the Summit in Singapore at the end of 2007, making it clear that Nay Pyi Daw wanted to deal with the UN and the international community directly. Thereafter, ASEAN stood aside until the tragedy of the cyclone Nargis hit in early May 2008. For two weeks, there was a standoff between a paranoid Myanmar government on one side, and foreign governments and international aid

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agencies on the other. Singapore, in the Chair, convened an emergency ASEAN Foreign Ministers' meeting and persuaded Myanmar to agree to the formation of an ASEAN Humanitarian Task Force and the Tripartite Core Group to oversee the flow of international assistance. That process worked very well, much better than anyone had hoped for.

With the help of ASEAN, some trust was thereby re-established between Myanmar and the international community. And all this added considerably to our workload in the Chair. Although political progress in Myanmar remains slow and difficult, ASEAN did make a significant contribution to the people of Myanmar, especially in preventing a second wave of deaths from famine and hunger.

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The credibility of ASEAN is a challenge to us in these trying times, and so it was too, during the Asian Financial Crisis when some commentators thought that ASEAN would become diminished. But in actual fact, under the pressure of crisis, leaders met, acted, and we became stronger as a regional organisation. This present economic downturn presents a fresh challenge to us and there are domestic political difficulties, there are bilateral political problems like Preah Vihear. But I believe because of the changes in the world, because of the rise of China and India, the countries in Southeast Asia have no choice but to stay united and proceed with even greater determination on the integration of our economies, closer political coordination, and a gradual outreach to young people, to make the ASEAN Community not only a legal reality, but a reality in our hearts and in our minds.

Mr Hawazi Daipi asked about our relations with Malaysia, Indonesia and Thailand.

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With Malaysia, our relations have improved considerably under PM Abdullah Badawi. In November last year, Foreign Minister Rais Yatim hosted the Singapore delegation for the Wisma Putra-MFA Games in Johor with great warmth. With the judgment of the ICJ (International Court of Justice), our bilateral dispute over sovereignty of Pedra Branca has been resolved, but to be sure, to neither side's complete satisfaction. Maritime boundaries around Pedra Branca are, however, yet to be delineated. We hope to do this expeditiously through the Malaysia-Singapore Joint Technical Committee, in a constructive spirit. Both sides have also been discussing the implementation of the Points of Agreement. On Iskandar Malaysia, the Joint Ministerial Committee has met a number of times with good results. With the economic crisis, it is all the more important for the two countries to cooperate for mutual benefit. And the recent decision to free up the KL-Singapore air sector to competition has brought down fares.

When Prime Minister Lee Hsien Loong met Malaysia Deputy Prime Minister Najib in Lima last November, he expressed the hope that bilateral relations could be raised to an even higher level. Deputy Prime Minister Najib responded positively and PM Lee suggested the development of an iconic project in Iskandar Malaysia to express this common aspiration.

Our relations with Indonesia are also very good. Apart from the ET/DCA (Extradition Treaty/Defence Cooperation Agreement) issue which both sides agreed to set aside for the time being, Indonesia and Singapore cooperate closely on a wide range of issues. Just last month, President Yudhoyono inaugurated the Batam/Bintan/Karimun Free Trade Zone drawing the two countries closer together. To facilitate to-ing and fro-ing, Singapore will establish a Consulate in

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Batam this year. Relations between the TNI and the SAF are excellent with regular joint exercises conducted by all three services. We are completely on the same side in our fight against terrorism. We work together on fighting bird flu in Tangerang in West Java and fighting forest fires in Jambi. On ASEAN and the regional architecture, Indonesia and Singapore share almost identical positions. And recently, after six rounds of negotiations, both sides agreed on the delineation of our sea border in the western part of the Singapore Strait. Foreign Minister Hassan Wirajuda and I will be signing the agreement within a few weeks. This agreement would have to be ratified by the Indonesian DPR (House of Representatives).

We must continue broadening and deepening our relations with Indonesia in the coming years. In contrast to the Soeharto era, Indonesia's power structure has become much more complex. In Jakarta, we need better links to the legislative branch of the government. Our MPs should get to know their DPR counterparts better and develop personal relationships. Indonesia has a lively media which we must be ready to engage. Indonesia has also devolved much power to the provinces and kabupatens (regencies) and it behooves us to build stronger links to the provinces and kabupatens that are closer to Singapore. We should also pay attention to people-to-people links including exchanges among scholars, students and artists. Whatever the outcome of the elections in Indonesia in the coming months, the relations between Indonesia and Singapore will remain strong because both sides need it.

As for our relations with Thailand, they are back to normal. We have to deal with whoever is in authority. We do not know how long the political uncertainty will continue. But whatever the domestic political situation in Thailand, we have to rise above it and keep formal bilateral

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relations on an even keel because that is in the best interest of both countries. All of us know that there is considerable mutual affection between Thais and Singaporeans. Many of us know Prime Minister Abhisit personally. Singaporeans visit Thailand by the hundreds of thousands every year. We were very touched last year when Princess Ubolratana chose Singapore to screen the international premiere of her movie "Where the Miracle Happens". Princess Sirindhorn visits Singapore regularly in connection with her work on technology for the handicapped and on philanthropy.

Ms Indranee Rajah and Ms Irene Ng asked about our hosting of APEC in November this year and how Singaporeans can benefit from it. This will be a major event because the leaders of 21 economies in the Asia-Pacific will be attending, including new leaders like President Barack Obama of the US and President Dmitry Medvedev of Russia. The world's media spotlight will be on Singapore that week. It is important that we host the meeting well. At the last APEC Economic Leaders' Meeting in Lima, Peru, it was heartwarming the way ordinary people joyously greeted visiting delegations, waving from motorcars and sidewalks. And as Ms Irene Ng said, we should try to do the same in Singapore so that the meeting in Singapore becomes a memorable experience for all those who come. In addition to the APEC Economic Leaders' Meeting, we expect some leaders like China's President Hu Jintao to make bilateral visits to Singapore just before or after.

We will be celebrating the 20th anniversary of APEC in Singapore. I remember vividly the first meeting in Canberra 20 years ago. That same week, the Berlin Wall fell. Many of us had a sense that one chapter in history was being closed and a new chapter was being opened. By happy chance, at the

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same time as we hold APEC this year, a 16-foot stretch of the Berlin Wall will be unveiled at Bedok Reservoir near Temasek Polytechnic on the 20th anniversary of the fall of the wall in Berlin on 9th November, and we will have a big party.

As Chair of APEC, Singapore has the responsibility to push forward the APEC agenda, particularly promoting economic cooperation in the Asia-Pacific and resisting protectionism. With the sharp economic downturn, protectionist sentiments will rise in many countries. As we all know, the chance of the Doha negotiations being concluded in the near future is small. In trade matters, like riding a bicycle, there is always a danger of falling off when you are not moving forward. An important item for APEC is the proposal to establish as a long-term goal – a Free Trade Area of the Asia-Pacific. In fact, this is the only way to operationalise the Bogor Vision of the Asia-Pacific becoming a region for the free flow of trade and investment by 2020. The Trans-Pacific Strategic Economic Partnership, which is a proposed FTA of a number of APEC economies, will help us get there. The US, Australia and Peru will be negotiating membership with the present members, which are Brunei, Chile, New Zealand and Singapore. Vietnam has expressed interest too. When the 21 leaders meet in Singapore this November, we can be sure that their preoccupation will be the global economic crisis because all economies are seriously affected by it and by the end of the year, that crisis will bite hard in every economy. If we host the meeting well, both in substance and in form, Singapore's international reputation will be enhanced, and this will be good for our economy – precisely the point Ms Irene Ng made.

Both Ms Indranee Rajah and Mr Michael Palmer asked whether a new Administration in the US will mean a

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change in our relations and ASEAN's relations with the US. Singapore's relations with the US are excellent and should remain so under the Obama Administration. Whatever others might say of the previous Administration, from our perspective, US policy on East and Southeast Asia under President George W Bush was constructive and good for the region. We expect stability of the core positions under President Obama. We do know and we have been in contact with a number of the key officials in charge of East and Southeast Asian policy in the new Administration. Singapore's FTA with the US continues to be a model for other countries and has helped us attract investments into Singapore and create jobs. Our Strategic Framework Agreement with the US also enhances the security of the region.

As for US relations with ASEAN, we might well see an improvement under President Obama. Because, as Mr Palmer said, he lived for four years in Indonesia as a young boy, President Obama has a feel for the region which goes beyond what is contained in briefing documents. You know, when Ambassador Chan Heng Chee greeted President Obama at a social function in Washington DC last week, he replied in Bahasa Indonesia to Ambassador Chan's surprise and she had to quickly search her mind for Malay words in response. When Prime Minister Lee met then-Senator Obama in May 2007, he fondly recalled following his mother to Singapore for occasional shopping trips from Indonesia. We look forward to welcoming Secretary Hillary Clinton to our ASEAN Ministerial Meeting in Bangkok in the middle of the year and President Obama for the APEC Economic Leaders' Meeting in November. At her confirmation hearing in the Senate, Secretary Clinton laid out a position on ASEAN which we are very comfortable with.

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While we position ourselves for an increasingly multi-polar reality in the world, the fact is the US will remain the pre-eminent pole for a long time. Without the US in the lead, multi-polarity can be unstable and even dangerous. Without the US driving the G-20 process, the reform of global institutions cannot be accomplished. Without the US staying deeply embedded in East and Southeast Asia, the region can be destabilised, affecting prospects for peace and development. And as for the dangers of the US turning protectionist, this will be an ongoing struggle within the US body politic itself. We read recently how, in passing the stimulus bill in the House of Representatives, a clause was added to buy American steel first. But because countries protested and the White House stated its position, when the same bill went to the Senate, the Senate said that it would be subjected to all international agreements being observed. That is a good sign, but we expect this to be a continuing fight in US domestic politics because of rising unemployment.

Ms Indranee Rajah, Mr Hawazi Daipi and Mr Ang Mong Seng asked for an update of our relations with China. China will become increasingly important to our well-being in Singapore as its economy and influence grow. In December last year, we commemorated the 30th Anniversary of Deng Xiaoping's visit to Singapore around the time he launched China on its new path of reform and opening up, a decision which was historically decisive for China and the world. Over the years, we have built up our links with China and our China account is now considerable. A few months ago, we concluded our FTA with China, which complements ASEAN's FTA with China. And later this year, both sides will be celebrating the 15th Anniversary of the Suzhou Industrial Park, which has become one of the most successful parks in China. That project deepened mutual understanding, created

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trust and facilitated cooperation across a wide range between the two sides. The new Tianjin Eco-City Project will take our bilateral relationship to a new plane.

During this economic downturn, China's economy will continue to grow. Last week in Davos, Premier Wen Jiabao reported that China would strive to achieve 8% GDP growth this year. MFA will work with MTI and the various economic agencies to open up more business opportunities for Singapore businesses in China in the coming months and years.

Mr Ang Mong Seng asked about the state of cross-strait relations and Singapore's relationship with both sides of the Taiwan Strait. Under President Ma Ying-jeou, cross-strait relations have improved considerably. " San Tong " (三通) benefits not only Mainland Chinese and Taiwanese but everyone else in the region.

I was in Xiamen last month and could feel the sense of optimism about the future. Within Singapore's "One China" policy, we maintain good unofficial relations with Taiwan. We will benefit from the new situation and will try to make a positive contribution to cross-strait relations.

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2011 marks the Centennial of " Xinhai Geming " （辛亥革命）, the great Republican revolution which transformed Chinese society worldwide. Singaporeans played a significant role in that revolution and subsequently paid a heavy political price for it when the Japanese came. The Singapore Chinese Chamber of Commerce and Industry will organise a big celebration at " Wan Qing Yuan " (晚晴园), a monument revered by Chinese on both sides of the Taiwan Strait. In 2011, at about the same time, Singapore will also be hosting the World Chinese

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Entrepreneurs Convention. The Convention was initiated by Singapore's Chinese business leaders and launched by then-Senior Minister Lee Kuan Yew in 1991. We are delighted to play host again in Singapore after 20 years.

Ms Indranee Rajah also asked about our relations with Japan and India. Mr Hawazi Daipi asked about our relations with India.

Our relations with Japan and India are very good. As maritime nations, Japan and Singapore share common interests in many strategic areas. We appreciate Japan's positive contributions to the economic development of Singapore and Southeast Asia. We support the inclusion of Japan and India as permanent members of the UN Security Council.

This year, President and Mrs Nathan will be making a state visit to Japan following the successful visit of Emperor Akihito and Empress Michiko to Singapore in 2006. These visits symbolise the close relationship between our two countries.

With India, our relations continue to grow in a multi-faceted way – political, economic, defence and cultural. Like China, India will continue to grow at a good clip during this economic downturn. At Davos, Indian Commerce Minister Kamal Nath expected India's GDP to continue growing at 7% to 7.5% this year. Like for China, we will work hard to open up new opportunities for our businesses in India both at the centre and in the states, capitalising on our position as one of India's major investors. We also want a strong reflection of India in Singapore. Over 3,600 Indian companies now operate out of Singapore. Last year, the first overseas meeting in the region of Non-Resident Indians, Pravasi Bharatiya Divas, was successfully held here strengthening our links to the worldwide ethnic Indian network.

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Mr Zainudin wanted an update about the state of our relations with countries in the Middle East.

As Members would have noticed in media reports, the flurry of high-level bilateral visits between Singapore and the Middle East continues unabated, and President Nathan will soon be visiting the Middle East again. It is an important new frontier for us. Despite a drop in the price of oil and the collapse of real estate bubbles, the region will stay wealthy because the cost of producing oil and gas is very low. I remember one Kuwaiti Minister telling me that it only costs US$1-US$2 to extract a barrel of oil in Kuwait; no need to pump because the oil is already under pressure and will gush out on its own.

Particularly in these difficult times, we must explore new openings in the Middle East. Many countries there want closer cooperation with us, seeing lessons they can draw from Singapore's developmental experience. They also appreciate our integrity and our forthrightness. The appointment of Prof. Shih Choon Fong, former President of NUS, as the President of the new King Abdullah University of Science and Technology is a compliment not just to him but to the Singapore education system. When the new Libyan Ambassador called on me recently, he expressed a strong hope that our bilateral relations will flourish. The signing of the Free Trade Agreement between Singapore and the Gulf Cooperation Council (GCC) in December last year, which is the first to be signed by the GCC with any country or region, benefits both sides. We have to continue building up our knowledge and expertise on the Middle East. Mr Zainudin talked about the Middle East Institute which is gradually building up layers of expertise. It will take time as this is a long-term undertaking, but it is making

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good progress. Together with MTI, we will build up our stock of Arabic speakers and send more officers to the countries which offer us the most opportunities. With the developed countries in recession, we will give particular emphasis to new opportunities in the Middle East, in addition to China and India. These will be our areas of concentration.

I shared Dr Maliki's abhorrence at the unending cycle of violence in Palestine, in particular recently in Gaza. When Turkey's Prime Minister Erdogan stormed out from the panel in Davos last week, he expressed the anger which many people feel about the lives lost in Gaza when the Israeli Army moved in to stop the firing of rockets by Hamas into Israeli towns and villages. Singapore has good relations with both Israel and the Palestinian Authority in Ramallah. While we understand the legitimate right of Israel to self-defence and understand the fear they face when rockets could suddenly explode in their midst in the middle of the night, we were however dismayed by the disproportionate response. We hope the present ceasefire will hold. We support a two-state solution with the Palestinians having their own sovereign state on the West Bank and in Gaza. This can only happen if Hamas is prepared to work with Fatah and accepts the PLO's (Palestine Liberation Organisation's) commitment to renounce violence and recognise Israel. And Singapore has stated this position repeatedly at the UN and in various media releases.

With the world in disarray, Mr Chairman, MFA expects this to be a busy year. The international configuration is changing dramatically. We have to be alert to changes that could affect our well-being, avoiding dangers and seizing opportunities. We must continue to nurture good relations with all our neighbours and with all the major powers, and I thank Members of this House for their full and consistent support.

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Mr Zainudin Nordin: Sir, point of clarification. Would the Minister be able to elaborate the benefits from the GCC-Singapore FTA? Are there many Singaporean companies which would benefit from that and what kind of anticipation that we are expecting from the growth of businesses between Singapore and the Middle East countries?

Mr George Yong-Boon Yeo: MTI will be briefing businesses about the opportunities which will flow from this FTA. We are seeing a greater flow of Middle Eastern funds into Singapore. As Members know, Islamic finance is growing nicely. Singapore is a strong jurisdiction and in times of crisis, there is always a flight to strength and we should exploit this opportunity. Under the FTA, there is also recognition of MUI's halal certification, and we see here a new opportunity for many of our food exporters. In fact, I have been asked to officiate at the launch of a seminar precisely on halal exports to the Middle East in a few weeks' time. And there are many opportunities. Our businesses are now all over the Middle East. They are well regarded. We are considered a brand name. We must continue to protect our reputation, establish a good track record, and I believe many benefits will accrue to our businesses and to Singaporean individuals in the coming years in different countries in the Middle East.

Ms Indranee Rajah: Mr Chairman, I would like to thank the Minister for his very comprehensive replies to our questions, which have given us a deeper insight to Singapore's foreign relations. And since he has mentioned that the world is in disarray and it appears that his Ministry has its work cut out for it, we wish the Ministry the very best as well.

Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

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The sum of $367,261,400 for Head N ordered to stand part of the Main Estimates.

The sum of $80,000,000 for Head N ordered to stand part of the Development Estimates.

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