"U.K. bid to avert trade war starts bitter clash

British and French ministers clashed in the Council of the Organisation for European Economic Co-operation in Paris...".

The whole idea of getting colonies and fighting wars is to obtain a better economic standard for your people. Therefore, when it comes to the question of economy, even old friends - friends who have fought side by side with each other - will clash, to try and get the better of each other. That is what happens, Sir. Can you blame me, Sir, if the Federation think of their economy first? You cannot also blame them for that.

Sir, the hon. Member asked me, "Can the Minister honestly tell us whether entrep�t trade can be maintained?" I have said many times honestly that the entrep�t trade increase cannot be maintained, and if the hon. Member will refer to the Hansard of two years back, he will find it there. I am not trying to shield myself, Sir. That is the actual position today, and I have said it often and quite openly. Then he said. "How can the Minister say that if there is no merger with the Federation, then we die?" I never said we die, Sir; we will not die, but our economic future will not be bright. What are we going to do with that surplus population that is increasing year by year? We cannot absorb them in trade: the industrial expansion is not big enough to do so. So what do we do? If we are one unit with the Federation, probably some of this surplus population could settle down there.

The hon. Member said some politicians would promise anything to be returned to power. Sir, I have not done that. I have openly and truthfully stated that we have a bad economic future facing us. If I wanted, I could say, "Everything is dandy in our camp. We are all right." I can paint a rosy picture and get everyone to clap and say, "What a good Minister! So much has been achieved." That will pave the way for getting myself re-elected easier. But I have painted a gloomy picture in the past, even at the risk of being called an alarmist.

Sir, I have explained why the entrepot trade is bad. It is not because of the fault of this Government. The hon. Member asked, "Did the Government negotiate to improve international trade? Why cannot we have normal trade with Indonesia?" At this stage, I may take a bit of the time of the Assembly to say something about what my Ministry has been doing in this respect. Hon. Members will recollect that I led a trade mission to Indonesia in October 1955 and that we did initial an agreement between our side and the Indonesian side which was to be ratified by the Cabinets of both sides within three or four months of the initialling. However, before that could be done, there was a change in government in Indonesia and nothing came out of the agreement. Then about a couple of months back an official of my Ministry went to Indonesia and had informal discussions there with various government officials and trade and commercial leaders. As a result, the Indian Chamber of Commerce decided to send a trade mission to Indonesia in December in which the Singapore Chamber of Commerce and the Chinese Chamber of Commerce were going to participate. However, later on we came to know that there was not much response from the Indonesian side, and so the mission was postponed.

Hon. Members will also remember that when certain vessels were detained at Pulau Samboe and other places early this year, it was my Ministry which took up the matter very strongly, and as a result several vessels were released, I think in February or March. Again, Sir, the Scudai, the Hong Tat and a Siamese vessel from Pulau Samboe were released because we took up the matter with the Indonesian Consulate-General here. We are constantly in touch with the Indonesian Consulate-General here on trade. For instance, barter trade: Sir, when there was some trouble between the merchants here and those on the other side in the log trade, we tried to smoothen matters out. We have succeeded in a lot of instances when difficulties arose between both sides. There are times when we cannot release this sort of news, because neither side wants it to be released.

We have also taken up through our Trade Commissioner in the United Kingdom the question of freight on timber, copra and coconut oil at various times and we have partly succeeded in getting a reduction in the freight on copra. Sir, the hon. Mr Tan Siak Kew knows about that.

We have also taken up the question of the customs duty on coconut oil in the United Kingdom, but we have not succeeded in getting a reduction of that duty. But there again it is a question of unfairness. Coconut oil from Singapore has to pay a non-preferential rate when it enters the United Kingdom. That was not so in 1950, but after that, they suddenly decided on a non-preferential rate. All we could do is to write to them, to appeal to them, and to negotiate with them; but if one side is not willing to come down, what are you going to do about it? You have got to take it lying down, because there is no other way out.

Then the hon. Member expressed his happiness at my introducing measures to protect the soap industry; but what I can gather from the earlier part of his speech is that he was against any sort of protection or any sort of impediment to the free flow of trade. So I was rather surprised when he said that he was happy that I was going to introduce measures to protect the soap industry. Sir, that is a question that is being considered by the Protection Advisory Committee now, and I cannot anticipate their findings nor their recommendations to me. But that is certainly a matter which is being considered. In fact, we have received applications from about eight parties altogether on different items for protection, and all of them are being attended to.

The hon. Member said that my Ministry has nothing to boast of for 1958. Sir, I have never boasted. I have worked, and I can say this without boasting, that if my officials had not worked as hard as they have, there might probably have been a further fall in trade, because the negotiations which they had carried out might not have borne fruit; in which case the assistance which was given to trade would not have been there and as a result there would have been a decline in that particular trade.

Then the hon. Member asked me, "If the Minister fails to achieve a Pan-Malayan economic unit - which is an ideal - what will he do?" Sir, I have said a couple of weeks back that I do not believe in letting things slide. I believe in fighting hard to survive, and all the measures which I have introduced in this House - the protection policy on which, incidentally, a Bill has been introduced; the Customs (Amendment No. 3) Bill, which was introduced on 12th December, 1958; the Pioneer Industries Bill; the Industrial Expansion Bill and so on - are designed to meet a situation where we have to stand on our own feet. The effect of these Bills will be felt, probably not today or next year, but a couple of years hence, because developing an industry is not something that can be achieved overnight. It takes time. A man who thinks today of starting an industry would probably have his factory ready after three years. First he has to make a market survey; he has to find out about his raw materials, labour and various other factors; and he has got to satisfy himself that the Government in power - or if there is going to be a change in government in the near future, that the government coming in would be favourable to his industry. It is only then, when he is satisfied with all the angles, that he starts taking concrete steps to set up an industry. The ordering of machinery and putting up buildings will take another year at least.

But my main point is this, Sir, that we must try and stand on our own feet, and the only solution I can see is to try and industrialise as much as possible. Now there will be a conflict between the trading interests and the industrial expansion interests. That is bound to occur. That is why I have stressed selective protection. We have to balance the two - which is the more beneficial to us in that particular item. There cannot be a rule of thumb procedure in such matters.

3.30 p.m.

And the last point that the hon. Member made was, "Will the Government declare its policy about the Bank of China and whether it is going to close it down?" I am not aware, Sir, that the Government has ever said anything about closing down the Bank of China, and I do not see from where the fears of the hon. Member arise.

There is one point, Sir, which the Member for Tanglin raised, and that is, he mentioned that the Pioneer Industries and the Industrial Expansion Bills have been approved by this Assembly and asked how many new industries are going to be opened up. Firstly, those Bills have not yet been approved by this Assembly. They only have passed their Second Reading and they have not received their Third Reading and will not receive it until 14th January, 1959. So they have not passed into law yet. Therefore, you cannot have applications under those Bills yet. However, in anticipation of those measures, I have received about eight applications and we have replied telling them to await the passing of the Bills. We cannot tell them yes or no at this stage, because, legally, once the Bills become law, they have to apply under the law; and there are certain procedures which the Minister has to carry out, such as gazetting and so on, and therefore the Minister cannot prejudge the issue and say, "Yes, when the Bills become law, I will give you pioneer industry status." That is not right for the Minister to do. Sir, we have told them to hold their horses and to apply only when the Bills become law.

Mr Lim Cher Kheng: Sir, if I am not mistaken, the Minister for Commerce and Industry has categorically admitted that (1) the entrep�t trade of Singapore cannot be maintained: (2) he is determined to introduce protection measures not only for the soap industry but also for other selective industries; (3) the Singapore Government will definitely not follow the Federation of Malaya in taking drastic measures against the Bank of China.

Sir, I think it would be quite unfair of me to give such a lengthy criticism of this Ministry and never make any constructive suggestions. So I have these suggestions to put forward.

First, is it difficult for this Government to negotiate with the Federation of Malaya, to sit down at a table quietly to plan and agree on what type of industries the Federation of Malaya are going to promote and what type of industries they will allow Singapore to carry on with? In other words, if the Federation of Malaya decide to carry on with the textile industry, then in an agreement let the Federation of Malaya supply textiles to Singapore and Singapore must not allow textile factories to be set up. If the Federation decide that Singapore can carry on with the light industries, for example, matches, then Singapore can carry on and Singapore matches will be allowed to be imported into the Federation of Malaya without any tariff, and the Federation of Malaya also will not set up any match factories. In other words, although politically we cannot merge straightaway - it is a long-term policy - what I would like to emphasise is that politically, economically and historically, we must be one unit. Unfortunately, not at our own wish, we have been cut into two, but at least what I have suggested can be achieved. So the question is whether the Minister for Commerce and Industry will be able to approach the Federation of Malaya and come to an agreement to develop particular industries.

Sir, the second suggestion is to raise money which is badly needed to boost up industrial promotion. How are we going to raise the money? We should not rely only on our chicken feed national revenue, but we can find other means. I think quite a number of countries, even those as rich as Britain and America, have industrial or development bonds. The bond issues will be for a particular industrial development. Sir, we must fully utilise Singapore's position today. When the unemployment problem is brought up, many people think the solution is to merge with the Federation, and then our people can get into Malaya. But, Sir, many Federation workers are seeking jobs here, and many Federation businessmen like to invest in real property in Singapore. Singapore is nearest to the Federation of Malaya. How about Indonesia, Thailand, Hongkong and the Philippines? There are many, many wealthy businessmen who, either for racial conflict reasons, racial discrimination reasons, or political reasons, become refugees and they seek every way to set up a permanent home, and they are more practical than our people in Singapore. They know that Singapore will remain quite long under the Union Jack, and therefore there is political safety at least in Singapore. So many, many wealthy men seek to settle down in Singapore. And if I am not mistaken, many applications have been in the hands of the Minister for Commerce and Industry and if they can conform to the conditions laid down for setting up industries here, then they can be accepted and their applications for a permit to stay here permanently can be issued. Therefore, Sir, if the Government can issue such bonds, they can use the money for development. Many times I have quarrelled with the Ministry of Labour and Welfare which is in charge of immigration. It is quite stupid to say, "As soon as you have set up an industrial factory, then I can issue you a permit for permanent stay. You can bring in as many wives as you want." But these people are not sure that, after settling down here, they can sell their factory if they have to. So the purpose of encouraging the setting up of industries here goes like a circle, round and round and round. Sir, if the Government can fully and wisely utilise the situation and issue industrial or development bonds then I do not think there would be any difficulty at all of getting many investors to come here, because (I would like to be straightforward) they are refugees from the unstable neighbouring countries. But we must make sure that those bonds are not transferable. If they have faith in this country, if they want to enjoy the benefits of our social services in this country, then those bonds cannot be transferred. If you buy a certain amount of bonds, your permanent stay permit can be granted.

Sir, I earnestly and sincerely put forward these suggestions in support of what the Minister for Commerce and Industry has promised - that we are going to stand firm and we are going to fight for survival alone.

Mr Lim Choon Mong: Mr Speaker, Sir, Singapore will be better off if it is part of the whole of Malaya as one political and economic unit, but as far as we know, it is not going to be possible for some time to come, because of many factors, the main thing being the political situation in Singapore. When we talk about Singapore we always recall to our minds that it is an entrepot, it lives on trade, and that is why a great deal of discussion has taken place from this morning until now, centering on the most important subject of this island.

However, I want Members of this Assembly to note that Singapore, by itself, must adopt certain attitudes if it is going to survive. It is just a middleman. From the West, we have the big countries to supply us with goods. Around us, we have other countries supplying us with raw materials. We are a centre for distributing manufactured goods to them. We are in a very vulnerable position. If the West or the big manufacturing countries refuse to co-operate, we cannot survive. If the countries around us are going to ship direct to the various manufacturing countries, we too will lose a great deal of our trade. No matter what it is, we have to think clearly what we must do in order to retain our position here as the middleman. It is easy to say, "Let us encourage entrepot trade. Let us encourage manufacture." But all this will be of no avail if the other countries are going to go out of their way to sabotage us.

Let me just quote one important section of this. I will talk about shipping. I have always been interested in shipping and I have always said that it is the most important line that we must depend on. We know that goods may be shipped from the West to Singapore to be distributed to South-East Asia, but if the big shipping lines under the control of the nations of the West are going to by-pass Singapore, then we will not have the entrepot trade that we are now having. There will be a ganging-up of all these shipping companies in order to make sure that their interests are not affected. I will also say this. If you ask what is the freight from Singapore to the United Kingdom, you will be quoted a certain rate. If you ask for the freight rate from, say, Borneo to the United Kingdom, it will not be a great deal more. In fact, it will be much cheaper. They do it this way. It is not possible for the large shipping lines to send large ships to the small countries in South-East Asia to collect enough freight. Therefore they make use of Singapore as a collecting centre.

3.45 p.m.

The freight from Borneo, Sarawak or any of the neighbouring countries to Singapore will be done by the subsidiary lines. They can pass the goods on to them. They handle it for the large shipping companies and, all in all, the cost is less.

Singapore, in this instance, is being made use of by these large shipping lines for their own interests! The large shipping companies, to make sure that no shipping lines should establish themselves firmly in Singapore, undercut their rates. They tell the shippers of their goods, "You have to ship with the companies we appoint, otherwise we shall not accept your goods at these reduced rates." Now this hits at the existing industry - our local shipping.

There are, of course, many other ways whereby the West can force Singapore to render service to them without repaying this island anything at all. If a company refused to do what they tell them to do, they would gang up, get the manufacturers together, and say, "We will cut you off from there." I remember a story that was said before the war about a large European company that stifled the growth of a local company. This local company was going to import goods and distribute everyday-use wares imported from Australia. The local company knew that the goods were sold at very high profits and that they could make-do with even lesser profit and yet reap a good harvest. They started a company. First, this large European company informed the suppliers, "You are not to supply goods to this company. If you do, we shall boycott you: we shall not buy from you." Some companies agreed and withdrew supplies. Other little companies kept on supplying, so it was not quite effective. They went a step further. The director of the large European company also had an interest in shipping companies and he, therefore, told the shippers, "You must not carry any goods supplied to this company in your ships; otherwise we will boycott your ships." In that manner they were able to stifle the growth of the local company.

I am talking about this, Sir, because I feel that there are only two ways whereby we can keep our own entrepot trade. The first way is to be very courteous and polite to all the people around us, to do what all the manufacturers want us to do, and make whatever profit they permit us to make. The second way is to adopt a more independent attitude and say, "If you are going to compete with us, we will put up stiffer opposition, and we will try to help ourselves." We have one reason why they must rely on us, and that is that, geographically, we are centrally situated. We have good port facilities that attract the sending of goods to us. If the large shipping lines are going to undercut our local trade, then we can say we will put up our storage and handling fees for the transhipment of goods, and we will help our local shipping companies to establish themselves. Shipping is the most important industry in Singapore. If we can establish a Singapore-owned network of shipping running regularly throughout the whole of South-East Asia, we will be able to face up to the competition from the West. We can do that by giving our own local shipping protection in the matter of handling at our harbour here. Then we have a system that is ready for distribution of goods or for the collection of goods. If we are not able to do that, then we must adopt the attitude of kowtowing to all around.

Are manufacturing companies in the West, powerful organizations that almost dictate policies to their Government, going to help us? No, they are only utilizing us for their own ends! I think to adopt the attitude of becoming more independent and more self-reliant would be better, and the Ministry of Commerce and Industry should encourage this form of shipping. There are a few local shipping companies in Singapore. They have put forward their complaints to the Minister, asking him to help them so that they may not go out of business. I think the Minister should help them seriously, because if he does not, then our network of supplies and transport would be jeopardized. I feel that this network should be further strengthened by the addition of more ships to our own shipping companies, by expanding the routes so that they not only ply between Singapore and Hongkong, Borneo and Sarawak, but also ply as far down as Australia. If they can do that, possibly with Government help, even make it like the one proposed by the Minister for Commerce and Industry - a local cigarette factory with local interests in it - it will help our local trade: it will help our entrepot trade. Short of that, there is no remedy.

I certainly feel, Sir, that only after that is established can we consider other measures to help ourselves. One of these would be what the Minister has told us - the establishment of factories locally. And if we are going to establish those factories locally, we will face competition again from the West. They will not let let us go at that. They will dump their goods here. You might say that China has dumped goods here. But you also have evidence of European companies in Malaya dumping goods here, in order to kill local industries. If we have local companies which affect the interests of the West, I know these European companies will also dump their goods here in order that these local companies may be killed and that they will have a clear field for all that they manufacture. We are only called upon to do a job for them. If we do not fulfil their purpose, then they will cut us off. It is clear to us that because we have not been co-operating very fully with them, they are trying to cut off part of our trade and they are going to use Hongkong and other ports for their purpose. Instead of transhipping in Singapore, they are transhipping from Hongkong. Although the distance involved will be further, yet they are happier because Singapore will be brought to her knees and will have to co-operate with them! The Minister should fully realise the intentions of these people, and measures should be taken so that our local people are assisted in all possible ways in order that they may help Singapore to retain its prosperity. An answer from the Minister will oblige.

Mr R. Jumabhoy: Sir, I would like to ask the hon. Member for Serangoon this: "How much does one ocean-going steamer cost?" Can he give me an answer to that?

Mr Lim Choon Mong: Mr Speaker, Sir, I wonder what the Member for Telok Ayer, the President (or office-bearer) of the Indian Chamber of Commerce, was talking about when he asked for the cost of one ocean-going steamer. Nothing in this world starts off with a big bang. Everything must start in a natural way. I would just like to ask him a question in reply to his, "What is the capital of his company?"

The Chairman: Order. I think that is completely irrelevant.

Mr Lim Choon Mong: All right, Sir. I would say, take any big firm in Singapore that is locally-owned. What I know is that they came to Singapore with just a basket and a change of clothes. Today they may be millionaires or multi-millionaires. Things can be done that way.

Mr J. M. Jumabhoy: Sir, I forgot to mention earlier that we had carried out a preliminary survey of industries. We were so encouraged by the results of the survey that we are now carrying out a full-fledged survey of industries, covering nearly 700 industrial and manufacturing concerns each employing 10 persons or over. We expect to complete this survey in two months' time. The survey has indicated possibilities of further expansion of a number of industries and the assistance required from Government so that these industries could expand.

Coming to soap, Sir. Soap production has gone up, in fact. The figures are: January /August 1955, 173,000 cwt.; the same period for 1956, 170,000 cwt.; the same period for 1957, 165,000 cwt.; and the same period for 1958, 199,000 cwt. Sir, actually soap production has gone up.

Now coming to the point raised by the hon. Member for Changi: first, is it difficult to negotiate with the Federation of Malaya on what industries they should have and what industries we should have? I answered him, Sir, that we have had negotiations with them. We have raised this question before with them, and I am sorry to say at this stage, Sir, that it has not yet been found possible to have a formula of that sort. The hon. Member must realise that the question of merger is more a political question than an economic one. Then he raised the point whether we could issue industrial development bonds to raise money for industries. I do not think that the rich persons in Singapore are anxious to invest in such bonds which only yield 5, 6, 7, or 8 per cent. They want to go in for bigger profits; but it would be tantamount to selling immigration permits to refugees who have got money - if you force them, "You buy half a million dollars worth of bonds, and you will get an immigration permit." That is not the right way to trade on your immigration permits.

As for the expansion of shipping - the point raised by the hon. Member for Serangoon - our companies are still too small to undertake longer voyages, but I hope in time they will expand.

Mr Lim Cher Kheng: May I, Sir, just make a point of clarification? I have not suggested the selling of our immigration permits. I only said that since they have applied for a permit for permanent stay here and have also promised to invest their money here, why should we not utilize that promise and get them to buy government issue bonds?

Mr Lim Choon Mong: Sir, I asked the Minister for Commerce and Industry what measures he had regarding shipping and I have no answer to that as yet.

4.00 p.m.

The Chairman: Order. Moment of interruption.

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

Mr Hart: Sir, I beg to report that the Committee of Supply have made progress on the Appropriation Bill and ask leave to sit again tomorrow.

Mr Speaker: Tomorrow it will be.