HEAD N - MINISTRY OF FOREIGN AFFAIRS

Head N - Ministry of Foreign Affairs

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

Singapore's Foreign Relations

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

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

Mr Chairman, may I take my two cuts together on Singapore foreign relations and ASEAN? That will be five minutes then, Sir?

The Chairman: Yes.

Ms Indranee Rajah: With respect to Singapore's foreign relations, I would like to ask the Minister whether there had been any significant developments in our foreign relations as a whole. In particular, I would like to know where our relationships with the US and Europe stand and also our international standing. We are a small country but it has been said that we punch above our weight. It would be good if the Minister could update us on where Singapore stands in the international community and whether what we say in respect of international conventions, treaties and international affairs generally is taken note of by other countries.

ASEAN

I would also be grateful if the Minister could comment or give us an update on ASEAN. ASEAN is still a cornerstone of our foreign policy, so I would appreciate it if the Minister could let us know what is our current policy on ASEAN and, in particular, what are our plans for the ASEAN Chairmanship since Singapore would be taking the chairmanship of ASEAN. And also what it the progress on the ASEAN charter?

There has been much talk from time to time about ASEAN integration. It would also be appreciated if the Minister could comment on the feasibility of ASEAN integration, or what sort of progress is being made in that decision. I would also ask the Minister to comment on our bilateral relations with Malaysia, Thailand, Brunei, Vietnam and Indonesia.

2.45 pm

If I may just spend a few minutes on Indonesia because I had, in my Budget Statement, spoken about that. I had noticed that in the Sunday Times , there has been a further development or yet another episode emanating from our Indonesian neighbours. I must say, Sir, that it really is rather like a bad soap opera.

The latest salvo that has come from Indonesia can perhaps be described as the five Ps. The first "P" is that Indonesia took a stand on banning the export of sand on the matter of principle. They said that it was the environment. So that sounds quite noble and high minded. They wanted to protect the environment. It is a matter of principle. A few days later though, they emanated another statement which said that the ban was because of pressure. They wanted to pressure us. That sounds rather less noble. That is the second "P".

Then, on Sunday, I noticed that Indonesia's Maritime Affairs Minister, Mr Freddy Numberi, had said, and I quote, "The ban on sand exports will not be lifted till the Republic settles their border dispute. And even if Indonesia were to eventually allow sales to resume, it wants to renegotiate the price of the sand and determine which areas could be mined to avoid environmental degradation." And he said also, "Politically, we banned the export of sand because we wanted it to have a larger economic value, and we also wanted to settle our border disputes with Singapore." This comment about banning sand because they wanted to have a larger economic value is rather telling. Because what that suggests is its price, the third "P". So the first "P" - principle can perhaps be compromised, if the third "P" comes in, which is price. So the principle can be purchased. Of course, all this results in the fourth "P" for Singapore because we are puzzled. And if I could just wrap the whole thing up by saying that the entire Indonesian stand can be described as the fifth "P", which is that it is peculiar.

If the Minister could comment on these developments as well as the other bilateral relations that we have with our neighbours, which seem to be rather more smooth sailing with the occasional ups and downs. But bearing in mind that we live in a neighbourhood which is sometimes calm and sometimes exciting, it would be helpful if the Ministry of Foreign Affairs could give us an indication of whether we are sailing in smooth waters or whether we must experience a little turbulence here and there.

Dr Ong Chit Chung: Sir, ASEAN would be celebrating its 40th anniversary. ASEAN is at the crossroads and is time for stock taking. As Mr Severino, a former Secretary General of ASEAN, put it, ASEAN would have to face tough questions from both its citizens and the international community in the coming years. Is ASEAN the right vehicle for cooperation? Does it focus on the relevant problems? Are the appropriate instruments available? Some are indeed disappointed that ASEAN is not a strong economic entity. The pace of economic integration is far too slow and at its snail's pace. There is also the thorny question of membership. How do we deal with a wayward member like Myanmar whose conduct somewhat diminishes ASEAN standing? There are lots of ASEAN conferences and talks but little action. We wish ASEAN well. But it is in danger of being a NATO - No Action Talk Only.

Will the ASEAN Charter chartered by the Eminent Persons Group be a good roadmap for ASEAN in future? What is the outcome of the ASEAN Ministers' Retreat at Siem Reap, we wonder?

Mr Charles Chong (Pasir Ris-Punggol): Sir, ASEAN governments must surely realise by now that ASEAN's policy of constructive engagement and quiet diplomacy with the Myanmar's military junta over many years has failed to bring about any change for the better in that country. In fact, the situation appears to be regressing after many broken promises made to ASEAN and with hardly any progress made on their roadmap to democracy. Myanmar's military junta has done little to provide ASEAN with justification to continue defending it, and ASEAN's credibility has suffered much as a result of trying to defend the junta against international criticism.

However, ASEAN must also realise the limits of its influence, as evidenced by the snub received by its envoy, Syed Hamid Albar when he visited Myanmar earlier last year. Although ASEAN's influence on Myanmar appears limited, ASEAN governments must speak up and make it clear that what is happening in Myanmar is not acceptable to the other ASEAN members. ASEAN cannot simply ignore the tragedy happening in the member country and should review its policy of constructive engagement and stop using non-interference as an excuse for inaction. ASEAN's current constitution does not have any provision to suspend or expel rogue members. Could the Minister tell us whether the proposed ASEAN Charter currently being drawn up will address this shortcoming?

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Sir, we have been a member of ASEAN since its inception some 40 years ago. ASEAN has expanded, not only in size, but also in scope of its work as a regional and economic bloc. Our ASEAN members are also riding on each other's development as we see the positive outcome of the region being seen as an attractive destination for investors, albeit occasional domestic challenges faced by individual members.

Sir, while individual member countries may have their own challenges and difficulties, we also see periodic tensions in bilateral relations between ASEAN members. We have had our fair share of bilateral challenges with our neighbours. Our relation with Thailand was affected recently by the Shin Corp episode and the former Prime Minister Thaksin's private visit here. Then with Indonesia, we had the sand ban issue with their leaders going back to enforce on the reasons for the ban. Whether their reasons are environmental or political or the other "Ps" that are mentioned by Ms Indranee Rajah earlier, our relations with them is a little bit strange.

It does not help when political leaders make statements that seem as though we are such bad neighbours. Then with Malaysia, we continue to be targets of various accusations from time to time. Sir, I acknowledge that we are not the only ones having periodic bilateral issues with our ASEAN countries. Relations in Thailand have their own border issues to deal with. Countries continue to dispute on territorial boundaries.

Sir, bilateral relations have often times become thorny issues between member countries. How do ASEAN members ensure that these issues do not affect the larger objectives and vision of ASEAN? The stability of the region is critical for us to attract investors and for ASEAN to be seen as an economic force to be reckoned with. We cannot allow intra-ASEAN disputes to affect investor sentiment for the region as we will all stand to lose. While we continue to look beyond ASEAN, we should ensure our attractiveness as an investor destination. We must work to impress upon our counterparts in ASEAN on the importance of ASEAN solidarity for our collective and mutual benefit.

In this regard, Sir, I would like to ask the Minister: how is Singapore managing its relationship with individual ASEAN member countries bilaterally, especially during periods when bilateral relations are strained? Sir, we are aware of the non-interference in domestic policies of ASEAN. However, is there a role for ASEAN in managing such bilateral issues?

Finally, Sir, I would like to ask the Minister what is Singapore's role to ensure that ASEAN continues to remain strong and able to glue the member countries together to rise above sensitive bilateral issues.

Ms Irene Ng Phek Hoong (Tampines): Through the Singapore Cooperation Programme, we have helped our ASEAN neighbours by giving technical assistance. We have also helped our ASEAN neighbours in their times of need as much as we can within our capabilities. An example is our tsunami relief effort. Singapore was among the first to rush to Indonesia's aid. We sent emergency relief and pledged $15 million for its reconstruction efforts. Singaporeans from all walks of life also donated a total of $88 million for tsunami victims.

More than half the projects are in Indonesia. Just to name some: we built 1,500 houses in Aceh, built and upgraded hospitals, training centres and schools, and also built a pier in Meulaboh. Hundreds of ordinary Singaporeans, from retirees to students, also pitched in, serving as volunteers. And this was not a one-off effort. After the earthquake in Central Java last May, Singapore was also among the first to help with emergency relief.

Singapore has also sought to spur growth in our neighbouring countries through economic cooperation. One of the most recent was the framework agreement to develop the Special Economic Zones in Batam, Bintan and Karimun. In Thailand, we have also worked hard with the various Thai governments over the years to build a constructive relationship based on mutual help and mutual benefit. In particular, we have encouraged our companies, including our Government-linked companies, to seriously consider Thailand as a key investment option. Hence, Temasek's investment in Shin Corp.

These are major expenditures and investments, both tangible and intangible. But Singaporeans witnessing the unfriendly actions of Indonesia and Thailand would be forgiven for asking if all these efforts to build a strong ASEAN community and to help our neighbours are a worthwhile effort.

Singaporeans do not expect gratitude from our neighbours and we certainly do not expect also to be constantly made the scapegoat for their own domestic troubles or the butt of bully-boy tactics.

In Singapore, we do not forget countries which have helped us in times of need. We also resist populist pressures to play the nationalist card against our friends just to win votes. In our early years of struggle for survival after independence, it cannot be said that Indonesia was helpful to us. On the contrary, Indonesia was engaging in konfrantasi against us.

To become a viable state, we were forced to leapfrog the region. Our economic success today is the result of our hard work, resilience and ingenuity, and not because of any sand that we might have imported from any country or the oxygen that they might have provided.

Sir, we have put the past behind us and we have been working hard towards a strong ASEAN. We want a peaceful and prosperous neighbourhood. And we know that this region needs a strong ASEAN to face up to the challenges of a rising China, India and the shifting geostrategic landscape. But until the bigger countries in ASEAN get their act together and treat other countries in ASEAN with mutual respect, it would seem that this would remain only a hazy dream.

Can I ask the Minister what are the prospects for an integrated ASEAN given this state of affairs? Can I also ask the Minister whether he thinks that the haze problem would be considered a major ASEAN problem that all ASEAN countries should solve together, especially with the help of our biggest neighbour, Indonesia? It would seem that if we want to strive towards an integrated community of peace and prosperity, we should have a clear ASEAN, a clear-minded ASEAN with fresh air that would draw in investments, rather than one that is clouded in smoke and haze and will cause investments to go away.

Mr Teo Ser Luck: I mentioned about Hong Kong having China as a mass market that backs them up so that they gain a competitive advantage. ASEAN as a whole should be more integrated and work more closely on various fronts to tap on the opportunities and face the threats of competition. Would the Ministry share what are the plans ahead for Singapore in both social and economic aspects within ASEAN? And what is the strategy in positioning Singapore and ASEAN in the new world for the years ahead?

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi): Sir, in the face of the growth of China and India as economic power houses, it is very important and urgent for ASEAN's 10 members to work more closely together to enhance their competitiveness and attractiveness to investors. I would acknowledge that the different stages of economic development among the member countries is a key challenge to ASEAN's economic integration but efforts must be put in to achieve it.

Singapore is the current Chairman of ASEAN. Can the Minister give an update on whether we are achieving the objectives, in particular ASEAN economic integration, that we set out to achieve for ASEAN when Singapore assumed the chairmanship last year? What are the problems and challenges that are yet to be overcome towards that end?

Sir, I would also like to ask the Minister whether we are moving towards political integration and what are the challenges and, if we are achieving, whether there had been an agreement among ASEAN member countries to achieve it.

Relations with China and India

Mr Michael Palmer (Pasir Ris-Punggol): Sir, in the last 10 to 15 years, China and India have become major powers in Asia and, indeed, the world in international politics and economics. There is no doubt that China and India would control to a very large extent the future growth of the region, including Singapore. ASEAN must ride the Asian economic wave that is being led by China and India. Singapore is poised to lead the way in riding this wave.

From the point of view of regional security and stability, both China and India would play key roles in maintaining the balance of power in Asia. Given the rapid growth of these two Asian superpowers, can the Minister address the following: What is the state of our relations with China and India?

What is the future of our relations with these countries? Aside from political and economic relations which are foremost on the agenda, would Singapore be involved in any cultural projects, such as the Nalanda project, given the rich culture and heritage of these two countries? In the event that relations between the US and China deteriorate and India aligns itself with the US, which way would Singapore go? Can Singapore afford to take a side in such a scenario? Now that Japan is developing a full army governed by its new Ministry of Defence, in the event that China-Japan relations deteriorate, what position would Singapore take?

Bilateral Relations with Neighbouring Countries

Dr Ong Chit Chung: Mr Chairman, Sir, recently, Singapore's immediate neighbours, Malaysia, Thailand and Indonesia, seem to have an axe to grind and are terribly unhappy about Singapore.

The Johor Menteri Besar, Mr Abdul Ghani Othman, blamed the floods in Kota Tinggi on Singapore's reclamation works. This is a ridiculous claim, unsubstantiated by facts, and also did not explain why floods occurred in so many other parts of Malaysia. And the same Menteri Besar is ambivalent, blowing hot and cold about Singapore investors participating in the Iskandar Development Region.

The Thais accused Singapore of spying through Shin Corp's mobile and satellite operations. Why should Singapore be interested in spying on Thailand? We have better things to do. And the Thai government was terribly unhappy when the former Thai Prime Minister Thaksin made a private visit to Singapore. If the Thai military government is self-confident, why should they be worried who Mr Thaksin visited or whom Mr Thaksin had dinner with?

And Indonesia abruptly banned the sale of sand to Singapore, out of anger. The Indonesian Fisheries and Maritime Affairs Minister, Mr Freddy Numberi, called Singapore a "United States puppet". He said that the ban on sand export would go on till border disputes are settled.

But we are not intimidated. We shall get sand from elsewhere, use better construction methods and come up with NewSand, like we did with NEWater. Indonesia is also terribly unhappy that we raised the haze issue at the UN during a debate on environmental issues.

Overall, Sir, what does it all mean? It means that our neighbours are simply jealous of our success. I would say they have developed a "red eye" syndrome, infected with jealousy and envy, seeing red over the little Red Dot.

The Chairman: Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended

at 3.00 pm until 3.20 pm.

Sitting resumed at 3.20 pm

[

Mr Speaker in the Chair: ]

Debate in Committee of Supply resumed.

Head N - Ministry of Foreign Affairs (cont.)

The Chairman: Head N - Ministry of Foreign Affairs. Mr Hawazi.

Mr Hawazi Daipi: Mr Chairman, Sir, recently, we have been reassured by the Minister that the fundamentals in our relations with our closest neighbours, namely, Indonesia, Malaysia and Thailand, are sound and are not affected by the current spats in our relationship now with two of them at least. However, in the case of our relationship with Indonesia and Thailand in particular, there seem to be almost daily events and statements from their government leaders that indicate that even strong fundamentals built over the years may not be that strong after all.

In the case of our relations with Thailand, our use of their territory for regular military training is being questioned. As for relations with Indonesia, their flip-flopping on the reasons for the ban on sand export to Singapore does not augur well for strong bilateral ties. In fact, by the actions taken by the Indonesian navy to stop barges carrying granite stones which were heading towards Singapore, there seems to be a ban on the export of granite to Singapore too. If there is any concern in Indonesia about the possibility of sand smuggling under the guise of granite export, we should work towards joint inspection of the barges carrying granites, unless Indonesia intends to also block the export of granite to Singapore.

Sir, we must maintain a close relationship with all countries, including the US and other external major powers, that can enhance our safety and security and that of the region too. In this context, like fellow Member, Dr Ong Chit Chung, I am puzzled by the comment made by an Indonesia Minister that Singapore is a "puppet" of the US, and would thus like the Minister to comment on it. Can the Minister give us an update on the state of affairs of our relations with our three close neighbours and those outside Southeast Asia? Can the relationship that can be mutually beneficial be moved forward despite the current bilateral issues?

Middle East

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, with the rapid development and growth of the Middle East, Singapore has, in recent years, begun to give more attention to the region. What is the progress of our Middle East engagement efforts? Are we too late in realising the economic and other potential of this region? Can the Minister also update the House on the progress of our Free Trade Agreement negotiations with the Middle East countries, if any? How would these Free Trade Agreements translate into tangible economic and social benefits for Singaporeans?

Mr Chairman, Sir, I have heard feedback about how we have for a long time paid little or no focused attention to the Middle East region. Similarly, some have lamented on how little knowledge that we have about the culture and traditions of the Arabs and the Arab nations.

If this is true, Sir, what are the new initiatives and efforts that will be done to remedy this situation? In the long term, it would be beneficial for us to develop and enhance knowledge and capabilities on Middle East civilisation, language and culture. As more of our political leaders and businessmen meet and interact, I am confident more relations will be built and more goodwill could be garnered. Nevertheless, Sir, we should not ignore the people-to-people interaction. The Arab and the Muslim community in Singapore could play a role to further develop these contacts.

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Chairman, Sir, allow me first to thank Members for their questions on Singapore's foreign policy, although there are not many cuts this year.

Overall outlook

To answer Ms Indranee Rajah and others, the overall international and regional outlook for Singapore remains favourable. The big international relationships which affect us have improved. Sino-US relations are on an even keel. As a result of this, cross-Straits relations are stable, at least for now. The US has recognised China's helpfulness in finding a solution to the North Korean nuclear problem. Under Prime Minister Abe, Japan's relations with China have become less frosty. China's relations with India are also getting better. Both sides are engaged in serious border talks and trade between them is growing smartly. All this is good for community building in the region

- APEC, ASEAN + 3 and the EAS (East Asia Summit).

3.30 pm

The Middle East, however, remains worrying. The situation in Iraq continues to deteriorate. The standoff between the international community and Iran over its nuclear programme is reaching a head. Against the backdrop of growing division between Sunnis and Shiites, the Middle East is one area where conflict can suck in all the world's major powers. We will be directly affected in Southeast Asia as well. Without forward movement in Palestine, Iraq and Iran, the problem of jihadi terrorism can only get worse. But it is not all gloom; there are some positive developments as well. For example, Saudi Arabia is now playing a helpful role in bringing Fatah and Hamas together to form a unity government in Palestine. Although the Mecca Agreement falls short of the conditions set for an internationally-recognised Palestinian government, it nevertheless represents a step forward. It is good that the US is also now prepared to engage Iran and Syria through a regional conference on Iraq.

While we have little influence over the larger forces at play, we can help stabilise our immediate environment in Southeast Asia. Ms Indranee Rajah, Dr Ong Chit Chung, Ms Irene Ng, Mr Charles Chong, Dr Maliki, Mr Teo Ser Luck and Mr Hawazi Daipi raised ASEAN and the importance of ASEAN integration. Building a stronger ASEAN is indeed a core element in our foreign policy. By the next Summit this November, the ASEAN Charter, which is being drafted, should be ready for our Leaders to sign. We will strengthen all three pillars of ASEAN, for political-security cooperation, for economic integration and the strengthening of our socio-cultural linkages.

A strong ASEAN enables us to negotiate more effectively with our major partners like the US, China, Japan, India, Europe and Australia/New Zealand. ASEAN is already playing a leading role in the construction of a larger architecture of peace and cooperation in the region. We have an inner concentric circle consisting of ASEAN and the three Northeast Asian countries of China, Japan and Korea, what we call ASEAN + 3. And we have, in addition, a larger concentric circle, the EAS, which also includes India, Australia and New Zealand. Launched in Kuala Lumpur in December 2005, the EAS had a successful second meeting in Cebu.

Dr Ong Chit Chung asked about the ASEAN Formal Ministers' Retreat in Siem Reap last week. We had a good meeting and we were able to advance the ASEAN agenda significantly. Later this year, Singapore will be in the ASEAN Chair for its 40th Anniversary as pointed out by Ms Rajah, Dr Ong and Mr Hawazi. We will also be celebrating the 30th Anniversary of our dialogue relations with the US and the EU. ASEAN's relations with both the US and the EU are becoming stronger. With the US, a Plan of Action was signed last July to implement the ASEAN-US Enhanced Partnership. With the EU, negotiations for an EU-ASEAN FTA will soon be launched. The EU has also indicated its desire to accede to ASEAN's Treaty of Amity and Cooperation. Singapore is a strong advocate of stronger EU involvement in ASEAN. We hope that both the ASEAN-US and ASEAN-EU Anniversaries will be celebrated at the Summit level.

While in the Chair, we will do all we can to move ASEAN forward. A peaceful ASEAN can play a major role in maintaining the larger peace in Asia. If I may answer Dr Maliki, Dr Ong and Ms Irene Ng directly, it does not mean that, with a strong ASEAN, there will be no more problems or conflicts among countries in Southeast Asia. There will still be. But a sense of regional solidarity and a habit of consultation and cooperation will set our disagreements within limits and facilitate their solution. To respond to the comments made by Dr Ong and Ms Irene Ng, ASEAN still has a very positive role to play. The most important objective is to maintain the peace in the region. If we are able to keep the peace for another generation, the entire region, which encompasses more than half the world's population in Asia, will be transformed beyond recognition and hundreds of millions of people will be brought out of the depths of poverty.

Let me now move to our bilateral relations in ASEAN. Ms Rajah, Dr Maliki and Dr Ong Chit Chung commented on our relations with Malaysia. On the whole, our relations with Malaysia are good and getting better. I agree with the recent remarks by Foreign Minister Syed Hamid, quoted in the Straits Times that, "our bilateral ties with Singapore have never been better. That doesn't mean all our bilateral issues have been resolved, but we are moving on to a more mature track. We are able to segment areas where we think we can move forward and areas we cannot, and move on the areas we think we can move ahead". I welcome this new phase in our relationship with Malaysia. In May, Prime Minister Lee Hsien Loong will visit Malaysia with a delegation of Cabinet Ministers for a retreat with Prime Minister Abdullah Badawi and his colleagues. This will be the first Retreat between our Leaders.

Close cooperation between our two countries will benefit our peoples. Personally, I was delighted, when it was announced that Genting made the successful bid for the Sentosa IR project. We look forward to working with Malaysia on the Iskandar Development Region in South Johor on the basis of mutual respect and mutual benefit. I am pleased to inform the House that the National University of Singapore will be conferring on the Sultan of Johor an honorary doctorate in April on the occasion of his official visit to Singapore. At Siem Reap last week, I expressed our intention to establish a Consulate in JB to Syed Hamid who welcomed it.

Singapore's relationship with Vietnam is growing from strength to strength. Vietnam has made remarkable progress in the last decade. It has been the fastest growing economy in ASEAN all through the Asian Financial Crisis. We have been working with Vietnam to deepen our economic cooperation. The Connectivity Agreement which we signed with Vietnam in December 2005 has raised our economic relationship to a new level by allowing both countries to leverage on each another's strengths. Last year, PM Lee was invited by Vietnam Premier Dung to celebrate the 10th Anniversary of the Vietnam-Singapore Industrial Park which has been a signal success. The two PMs also witnessed the launch of the VSIP II in September 2006. We look forward to Vietnam playing a growing role in ASEAN. Our relations with Cambodia and Laos are also in good shape.

Dr Ong, Mr Hawazi, Ms Rajah and Dr Maliki asked whether problems in our bilateral relations with Thailand and Indonesia will affect ASEAN's development. Well, I certainly hope not. With Thailand, our relationship is strong enough to weather the uproar over Prof. Jayakumar's private dinner with former PM Thaksin. As Thai Assistant Army Commander, General Saprang, who is a member of the Council for National Security (CNS), said in his interview with the Straits Times published on 21st February 2007, "misunderstandings between the two countries have come about because of Thaksin's business. The problem can be resolved fairly ... and won't blow up because the cause of the problem is not Singapore, but Thaksin". In other words, we are just being embroiled in their own domestic political conflict. I share General Saprang's sentiments. As close and friendly neighbours, it is right that both sides take into account each other's sensitivities whenever possible. We value our friendship with Thailand and the Thai people. It is good that both countries view Temasek's purchase of Shin Corp as a commercial transaction. The Thai Government has stated publicly that it is mindful of the rights of international investors and will not take action which is discriminatory in nature.

As for Indonesia, which was raised by, I think, all MPs, our relations were improving until recently. In October 2005, PM Lee held a retreat with President Yudhoyono in Bali. They agreed to negotiate an ET, an Extradition Treaty and a DCA, or a Defence Cooperation Agreement, in parallel and to be concluded as a package. We have made good progress on both the ET and the DCA. There are a few difficult issues remaining, but the gaps can be overcome. We have also agreed to cooperate on the development of Special Economic Zones (SEZ) in the Riaus, and to work together regionally and internationally to combat the haze.

Unfortunately, despite these positive developments, other issues have recently emerged that could sour relations and affect bilateral cooperation. On 5th February 2007, Indonesia banned the export of land sand to Singapore. Various reasons have been advanced by Indonesian politicians and legislators, some quite wild and strange. I like the five "Ps" which Ms Indranee Rajah used to describe the cacophony which we are now hearing.

On 16th February 2007, the Jakarta Post published an article which quoted the DEPLU's (Indonesian Department of Foreign Affairs) Director General for Asia, the Pacific and Africa saying that the ban on land sand exports to Singapore was a way to put more pressure on us to move faster on ET and border demarcation. MFA issued a statement on 19th February to say that, if this was indeed DEPLU's position, it was unfortunate and contravened the earlier agreement by the two Leaders and would further complicate border negotiations. On 21st February, Foreign Minister Hassan clarified that the land sand ban was not intended to pressure us. He reiterated environmental concerns and conceded that our reclamation would not change the sea boundaries between Singapore and Indonesia because what was under discussion was far away from our reclamation areas.

Last week, I met Minister Hassan during the ASEAN Foreign Ministers' Retreat in Siem Reap. He repeated to me that there was no linkage between the ban on land sand and other bilateral issues. And he explained Indonesia's environmental concerns. I told him that our offer to work with Indonesia on these concerns was still on the table. On sand, I acknowledged Indonesia's prerogative to stop its export, subject, of course, to international rules. I told him we were disappointed but we would find alternatives.

Early last week, another issue arose. We received reports that the Indonesian Navy was interdicting and detaining tugboats and barges carrying granite chips from Indonesia to Singapore. As of this morning, some 12 tugboats and 12 barges have been detained, most of which fly the Singapore flag. Mr Hawazi and others raised this specific problem.

I asked Foreign Minister Hassan whether there was a ban on granite exports to Singapore as well. After checking, he assured me that there was no such ban. He said there were only some existing administrative verification procedures to be complied with for granite exports. He invited us to witness the verification process to ensure its transparency. I welcomed this.

Minister Lim Hng Kiang also spoke to Indonesian Trade Minister Mari Pangestu to clarify the matter. She also confirmed that there was no ban on granite exports and acknowledged that several barges carrying granite chips from Indonesia to Singapore had been detained by the Indonesian Navy.

This morning, MFA delivered a TPN to the Indonesian Embassy in Singapore to confirm what Foreign Minister Hassan had assured me in Siem Reap and to ask the Indonesian Government to take immediate action to release the vessels that are still detained.

It is not clear to us what caused the recent events which threatened our bilateral relations. We know, for a fact, that President Yudhoyono values good bilateral relations as we do. On ET and DCA, we are not far from a solution. This was also Minister Hassan's view when I met him. And we have agreed that negotiations should now be elevated to the ministerial level so that they can be jointly concluded on the basis of "an overall balance of benefits" agreed to between Prime Minister Lee and President Yudhoyono.

Mr Chairman, Sir, from time to time, we must expect countries to pressure us in the hope that we will then give way to their demands. Singaporeans know that if we give in to such pressures, we would only invite more such pressures. However, we are always prepared to build good relations with them on the basis of mutual respect and mutual benefit. We should still help them when they are in difficulty not because we expect gratitude or reward, but because that is the right thing to do. I do understand the sentiments expressed by Ms Indranee Rajah, Ms Irene Ng and Dr Ong Chit Chung, which are sentiments shared by many Singaporeans but we have to take these ups and downs in our stride.

3.45 pm

Moving on to the rest of ASEAN, Singapore treasures its close ties with the Philippines and Brunei. The leadership of President Arroyo was a decisive factor in the success of the last ASEAN Summit in Cebu. We were touched by the warm welcome accorded to President Nathan during his State Visit to the Philippines last month. With Brunei, our relationship is intimate and problem-free. Later this year, Prime Minister Lee will be visiting Brunei to launch jointly with the Sultan a commemorative currency note to celebrate the 40th Anniversary of our Currency Interchangeability Agreement.

Dr Ong Chit Chung and Mr Charles Chong asked about our attitude towards Myanmar. It is sad that the country is not moving forward, at least not in a way obvious to foreign observers. By right, Myanmar should be in the Chair of ASEAN this year. We have decided that in ASEAN, we should give Myanmar more space to work out its own internal problems. This also means that ASEAN stopped having a common position at international forums, like the UN and the ILO. Mr Chong asked whether the ASEAN Charter should have provisions for actions against member states in the case of serious violations. This is a subject still being discussed but not with specific reference to Myanmar.

Bilaterally, we continue to maintain good relations with Myanmar and we wish the Myanmar people well. I will be making a bilateral visit to Myanmar next month. It is not for us to tell them what to do but we support ASEAN's consensus calling on the Myanmar Government to adhere to its own Roadmap to Democracy and for the release of Ms Aung San Suu Kyi.

To answer Ms Rajah and Mr Palmer, our bilateral relations with China, Japan and India are excellent.

With China, the Joint Council for Bilateral Cooperation co-chaired by Chinese Vice Premier Wu Yi and DPM Wong Kan Seng covers a wide field. Last year, both sides agreed to launch negotiations for a China-Singapore Free Trade Agreement within the framework of the ASEAN-China Free Trade Agreement. Suzhou has become an icon of our close partnership. China welcomes the extension of our involvement from the coastal regions to the West and the Northeast, and both sides have been making bilateral visits at a high level.

Our good relations with Japan were highlighted last year by the visit of the Emperor and the Empress. Following the custom of the Imperial Household, the visit was carefully crafted in great detail to express the depth and the warmth of our friendship. This month, Prime Minister Lee will be making an official visit to Japan. With economic recovery, Japan's role in ASEAN's economic development is growing again.

To answer Mr Palmer, we are relieved to see the sun come out in the relations between Japan and China although the clouds have not completely dispersed. Prime Minister Abe made an important move in visiting Beijing first when he assumed office, and Prime Minister Wen will be returning the visit to Japan in April 2007.

As for India, raised by Ms Rajah and Mr Palmer, our bilateral relations have never been better. We are now cooperating on a wide front, including in security and defence. Our artillery and armour units conduct joint exercises regularly, including live-firing exercises. The two air forces have been conducting a series of bilateral exercises, out of Kalaikunda in West Bengal and, for the first time last year, in Singapore. Following the signing of the Comprehensive Economic Cooperation Agreement in June 2005, bilateral trade jumped 40% last year.

In a modest way, we have been promoting good relations between India and China and between India and Japan. We try to add value where we can. And these are the three most important countries in Asia. If they develop strong bonds of cooperation, the whole of Asia will benefit and Singapore will prosper. For this reason, we worked hard for an EAS that included India. But we need more than economics to bind us together. We need also to develop cultural ties, the ties that in past periods created the maritime silk route. For example, with the support of the Buddhist community in Singapore, MFA has been working with India, China, Japan and many other Asian countries to promote the Nalanda project which Mr Palmer referred to.

Mr Palmer asked whether there is a danger that Singapore might be caught in between should conflict break out between the big powers, for example, between China and US, or China and Japan. There is always such a risk. What is important is for us to be clear about our own position. While we have friendly relations with the major powers, we are never their agents. And we must always be autonomous and have our own core. Let me answer Ms Irene Ng and Mr Hawazi Daipi. If there is a puppeteer, it is the people of Singapore whose collective interest we advance.

Dr Ong Chit Chung referred to our relations with the US, with whom we have an FTA and a Strategic Framework Agreement. Last year, President Bush made his second official visit to Singapore. No other country can match the US in its comprehensive capabilities. When the Boxing Day tsunami hit us, it was the US military which did the heavy lifting in countries all along the Indian Ocean rim. The SAF was only able to play a significant role because we were within operational range of Aceh.

We also recognise the importance of Russia to our region. Our political and economic links to Russia are getting stronger. There are now many direct flights between Singapore and Moscow. We are also working together on the development of Special Economic Zones.

Mr Chairman, Sir, Mr Zainudin Nordin asked for a progress report on our Middle East account. We have made significant progress since our policy shift to engage that region some three years ago. Last year, the Saudi Crown Prince made a very successful official visit to Singapore. The story of the young boy who walked up to the Prince at the lounge of the Fullerton Hotel, chatted him up and who was then given a string of beads by the Crown Prince, touched the hearts of many Singaporeans. Prime Minister Lee also had a good visit to Saudi Arabia in November last year. We were pleasantly surprised and honoured when the Saudis proposed to send more than two hundred scholarship holders to study in our universities annually.

Our relations with the other Gulf states - Qatar, UAE, Oman, Bahrain and Kuwait - are also blossoming and becoming more multi-faceted. We enjoy a good brand name and, generally speaking, our companies and our citizens are sought after by all these countries. Some of our companies have secured sizeable contracts. I hope more of our businessmen will seize opportunities in that market.

Negotiations for an FTA with the GCC countries, which consist of all the countries that I have mentioned, have begun and should not take too long to complete. Not only are there opportunities for us to trade and invest in each other's economy, there are also good prospects for us to work together in third countries. Flushed with cash reserves from high energy prices, and feeling somewhat less welcome in the West nowadays, some of the GCC countries are looking for opportunities to invest their money in China, Vietnam, Malaysia and other countries in our region. Some have asked to partner us in entering these Asian markets, especially China, as they believe that we are more familiar with this region. And, as Minister Tharman mentioned in his Budget Speech, Singapore is also becoming a centre for Islamic finance to service the growing economic links between the Middle East and East Asia.

I spoke about the strategic importance of Iran earlier. Senior Minister Goh Chok Tong will be visiting Iran in a few days' time. On Iran's nuclear programme, Singapore has always taken a firm position. We acknowledge Iran's right to develop nuclear technology for civilian purposes but this must be done under the supervision of the IAEA. It is necessary for Iran to comply with its obligations under the Non-Proliferation Treaty and the IAEA safeguards regime. Since Iran has explained that its nuclear programme is a peaceful one, we hope that it will abide by UN Security Council Resolution 1737 and reduce what IAEA Director-General El Baradei called the 'confidence deficit'. We believe that Iran can play an important positive role in bringing peace and stability to a troubled region. Doing so would be in the interest of Iran and the rest of the world.

Beyond the Gulf, Singapore's relations with Egypt, Jordan and the Maghreb are all warming up. Last year, we established diplomatic relations with Libya. And I hope to visit Libya this coming May to explore opportunities for cooperation.

To deepen our knowledge of the Middle East, we will establish an institute to study the Middle East focusing on West Asia and North Africa. It will complement the existing Southeast Asian, East Asian and South Asian Institutes. Our Arab community in Singapore is an invaluable bridge we should use to re-establish links with that region. Many of our Arabs are Hadramis who are an unusually talented and entrepreneurial people. Recently, Minister Yaacob and I had lunch with members of the Arab Association to discuss how the Government can facilitate the Association's efforts to reinvigorate our Arabic heritage, including the teaching of the Arabic language.

Mr Chairman, Sir, with the unfolding of our second wing, Singapore's external engagement has grown dramatically in recent years. Singaporeans and Singapore companies can now be found all over the world, including Africa and Latin America. It is the job of the Foreign Ministry to help expand that external space for Singaporeans in this new phase of our national development. It is an exciting phase and one which I hope more Singaporeans would consider being a part of.

Ms Indranee Rajah: Sir, I would be grateful if the Minister could elaborate a little more on the ASEAN Charter. What, for example, would be the value or the importance of having the Charter as opposed to the current situation? Is it intended to be something more than just a statement of broad principles? Does it have any teeth to it? And what would happen in the event there were disputes or differences of opinion on how it is to work? Would there be a dispute resolution mechanism? Or, basically, how would one implement that Charter?

Mr George Yong-Boon Yeo: Sir, the ASEAN Charter is intended to be a legal document, a mini-constitution for ASEAN integration. It would be drafted as a legal document. It would have provisions which will put upon its member states certain obligations. Should there be disputes, there will be provisions for dispute settlement. It will cover all three pillars of ASEAN - political-security, economic, socio-cultural.

We had the Eminent Persons Group meet for a year and they put up ambitious recommendations which the leaders have accepted. We are now, on the basis of those recommendations, drafting the Charter. It is a very important undertaking. If you look at the constitutions of many countries, if you look at the UN Charter, once these documents are drafted, they are not easy to change. They will affect structures and systems for years to come. The moment of conception is always the most important. We are now tinkering with the DNA of the egg, which is why from Singapore's perspective, we need to pay close attention to the drafting of the Charter. Prof. Tommy Koh is our representative on the drafting committee, and Second Solicitor-General Walter Woon is assisting Prof. Tommy Koh.

Dr Ong Chit Chung: Sir, I would like to ask the Minister, in discussing the ASEAN Charter, will the ASEAN Charter take a stronger position on Myanmar? Or would Singapore and ASEAN consider taking a stronger position on Myanmar now that Myanmar does not seem to listen to any advice?

Mr George Yong-Boon Yeo: Sir, the ASEAN Charter should contain provisions for the leaders to take action against a country that is in gross violation. The problem is this - among the leaders, they operate on the basis of consensus. But in such a situation, there cannot be consensus. This is the problem that we have posed to the High Level Task Force, which is the drafting group, and we told them that in this extreme situation, a provision should be drawn up. It is important that we separate this from the issue on Myanmar, which does not come close to that situation. I appreciate why Dr Ong Chit Chung and Mr Charles Chong feel strongly about the situation in Myanmar. I think many of us share the same sentiments. But sometimes, difficult cases make bad law. We should not use the example of Myanmar to settle what should be a long-term provision for ourselves in ASEAN.

4.00 pm

Ms Irene Ng Phek Hoong: I would like to ask the Minister for his update on ASEAN’s commitment to combat the haze, especially since it is expected to get worse due to the El Nino effect. It is worth mentioning that the biggest victims are the Indonesian people themselves. But suffering with them are also people in this region, including Singaporeans.

Can I ask the Minister whether ASEAN has done enough to combat the haze as a regional grouping? Or does it need international help to make sure that the problem is solved once and for all?

Mr George Yong-Boon Yeo: ASEAN Environment Ministers have been meeting. They have drawn up plans to combat the haze this year. We do expect the situation to be bad because of the El Nino effect. For sure, ASEAN by itself cannot combat the haze. We have been trying for 10 years without much effect. So we do need international support and assistance in overcoming what is really a global environmental problem.

Ms Ellen Lee (Sembawang): Sir, the Minister said that there were difficulties in the negotiations with Indonesia. Could he highlight what those difficulties are, and what exactly is in the package that was supposed to be discussed between Singapore and Indonesia, particularly in the ET?

Mr George Yong-Boon Yeo: By their very nature, they are not easy agreements to negotiate - Extradition Treaty and Defence Cooperation - but we have made good progress. The officials have met many times. We have been negotiating in parallel and the remaining issues are quite well crystallised now and I hope that when the Ministers meet, which means the Foreign Ministers and the Defence Ministers together, I hope we will be able to reduce the gaps so that they can be settled when our Leaders meet. So I would not say that the issues are too difficult. I say that they are difficult but they can be overcome.

Mr Zainudin Nordin: The Minister mentioned about the setting up of an Institute that focuses on the Middle East. May I just have an idea of the timeframe that we can expect this Institute to be set up?

Mr George Yong-Boon Yeo: We hope to have it launched this year.

Ms Indranee Rajah: Mr Chairman, I wish to thank the Minister for his comprehensive reply and, on behalf of the GPC, we would like to wish him another three "Ps" - patience and perseverance which will hopefully result in progress. With that, Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $316,405,000 for Head N ordered to stand part of the Main Estimates.

The sum of $83,610,000 for Head N ordered to stand part of the Development Estimates.