ECONOMIC DEVELOPMENT BOARD BILL

Order for Second Reading read.

6.26 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read, a Second time." I have His Excellency's recommendation that the Bill be proceeded with.

Sir, in part I of the People's Action Party long-term statement of policy - The Tasks Ahead - we set out on page 25 in the Chapter on our Economic Policy, the proposal to establish an Economic Development Board which will plan, co-ordinate and direct the industrialisation of the State. On coming into office, the Government set about the task of establishing the Board. The model of organisation and pattern of legislation of economic or industrial development boards of our Asian neighbours and of smaller countries further away, were studies in detail. The important function of the Board in the determination of our economic future did not permit us merely to copy or to graft. We were searching for an organisation which would fit itself into the economic situation and structure of Singapore. Economically, Singapore today is in a crucial stage of transition. On the one hand, we have to do our best to maintain and expand our trade, which has sustained Singapore so long and so well. At the same time, using the profits and the organisation of trade as a spring board, we have to industrialise quickly and efficiently so that, in the near future, we shall be able to sell to our neighbours the products of our labour instead of merely the services of our entrepot skill. Countries around us are increasingly pursuing, and justifiably so, a policy of direct trade. In this expansion of direct trading relations, Singapore can hope to play its role by being the supplier of manufactured products labelled "Made in Singapore". Being strategically located, the savings in freight would be one factor which will enable us to sell quickly and cheaply.

To bring about this economic transformation, on which our survival depends, the Government cannot adopt a purely laissez faire attitude. Nor can it play a simple administrative role of just maintaining civil stability and providing the basic essential services. To initiate the road to industrialisation, the Government has to play a positive and direct role. The Economic Development Board which we seek to set up under the authority of the Bill now before the House will be the agency of Government to direct this transformation of Singapore's economy.

It has taken the Government nearly two years to prepare for the establishment of the Economic Development Board. To some this may appear to be an unduly long period. But I myself do not accept this view. This is going to be one of the most important steps to be taken by the Government. It is obviously necessary that measures of such importance should be made only after careful thought and preparation. May I outline some of the preliminary steps which we have taken before creating this Board?

The first major move that the Government made was to ask for teams of international experts to investigate the potentialities of expansion in certain specific industries. Members are already aware of the work that is now being carried out and will soon be completed by the U.N. Industrial Mission headed by Dr A. Winsemius. Why is this step necessary? Could we not have gone ahead without seeking the opinion of experts. The answer is that in attempting any major transformation of the economy, it is well to have available the opinion of the best brains that we can get hold of. For the economic position of Singapore is unique and the experience of other and larger countries in Asia which are now attempting to industrialise themselves, offers us no guidance whatsoever. The reasons are simple and have been repeated ever so often. We do not have, as they have, natural resources which can provide the raw materials for industrialisation. In itself this is not so important as these raw materials are accessible from neighbouring countries. But more important than this is the size of the domestic market which imposes a limit to the extent of industrialisation based on it. In this respect, we differ fundamentally from the larger countries such as India and Pakistan, or even the medium-sized countries in Asia such as Thailand or Burma. These countries have the advantage that the home consumer demand is large and therefore the question of an adequate market for the products of industry does not present a problem in such an acute form that it does to us.

There is the further added complication of the free port status of our island State. While adjustments can be made here and there to this free port status, no precipitate action in the interest of rapid industrialisation can be contemplated which would cause such a major dislocation of the economy that the gain through industrialisation would be outweighed by the loss of our standing as an entrepot market.

These considerations do not apply to other Asian countries which are attempting to industrialise. Their problems and difficulties stem from other causes, on which I need not embark here. But, faced as we are in this unique position, it is necessary to seek advice from experts abroad. We lost little time in doing so, and in Singapore today we have, in addition to the U.N. Industrial Mission, another Mission to study the establishment of a steel industry in Singapore. Both these Missions contained men of ability and experience and they have given us new insights into the nature of the problem facing us and the solutions that we can apply.

We have now reached the stage when we can take this major move to establish the Economic Development Board. The acute difficulties in recruiting staff to the Board, which will need industrial economists, engineers, and other expert personnel, which we have experienced, have been partially solved. As I announced in the Assembly on a previous occasion, we have been able to get experts from countries abroad such as India and Israel, and with these as the nucleus we propose to press ahead.

I will now deal with some of the major functions of the Board. First, the Board will investigate and evaluate industrial opportunities. The market potential, availability of raw materials, production costs, capital requirements and other technical factors, will be worked out and assessed. When an industry is considered feasible, industrialists will be invited to consider the establishment of such an industry, with financial and technical assistance from abroad if necessary. It may be that the industrialist may possess the know-how but lack the capital. The Board will then assist him financially by direct loans and advances, or underwrite and guarantee the issue or equity capital by the enterprise concerned.

Secondly, where necessary, the Board will itself participate in establishing industries, where private participation is not forthcoming or insufficient. This may happen when an industry requires substantial investment outlay and expert technical know-how.

Thirdly, to provide prepared sites for industries, the Board will have the power to lay out industrial estates, where the basic requirements of industry, such as power, water, roads, railways and such other facilities will be laid on.

Finally, the Board will assist industrial enterprises by giving technical advice. A technical consultant service will be organised which will advise an industrial enterprise with regard to both economic and purely engineering problems.

An industrial research unit which will be sited in the Polytechnic is in the course of establishment with the assistance of the New Zealand Government. This unit will be able to give valuable assistance, especially to medium-scale industries, in the way of solving their production and engineering problems. At a future date we intend to set up a productivity centre to improve the efficiency of management and to raise the output of workers through the application of modern techniques. The relation between the industrial research unit and the future productivity centre of the Economic Development Board is something which will have to be resolved. I do not wish to anticipate what the Board itself will want to do. This will have to await the establishment of the Board.

Though the Board will have power under clause II to raise its own capital by the issue of bonds and debentures, a substantial part of the Board's assets will be made available by the Government. It is expected that over the Plan period 1961-1964, the Government will contribute from current revenue a total of $100 million for the operation of the Board. This will be done under the provisions of clause 10 of the Bill.

Under clause 16, the Board will have compulsory powers to acquire land. This is necessary as the development of industrial estates and sites, which is one of the functions of the Board, must proceed expeditiously to channel industries into suitable areas where the economies of scale in the provision of basic services can be enjoyed.

The Board as constituted under clause 5 includes a full-time Chairman and a Director, the Chairman of the Housing Board, and five members to represent respectively banking, manufacturing, commercial, labour and professional interests. Representation and participation in the running of the Board has been so distributed that the whole community can become a part of the national effort to industrialise, which task would be the Board's supreme responsibility.

Finally, the Bill will repeal the Singapore Industrial Promotion Board Ordinance, 1957, and the assets of the present Industrial Promotion Board would be vested in the new Economic Development Board. The new Board will have a hundred-fold more resources at its disposal, with which to provide the means for the take-off into industrialisation.

Now, Sir, a word about the future. The powers of the Board as I have described them fall into two broad categories. First, there is the industrial promotion effort and the rendering of technical services and assistance to industries. Then there are the financial activities of the Board such as the provision of loans or participation in share capital. It is the experience of other countries that the latter functions, that is, loan operations and share participation in industries, are better performed by a separate Industrial Finance Corporation. We may well find this to be the case in Singapore. But as a first step, it does seem unnecessary to establish two separate statutory bodies when not much is known as to the details and scope for what they would actually be doing and how much demand there would be for the services and resources that they will provide. This knowledge can only come about through actual experience, and if it is proved necessary in the future to separate these two functions and allot them to two separate authorities, then we shall proceed to do so. In the initial stages at any rate, a certain degree of centralisation would appear to be advantageous.

In this Bill, we provided for the formal powers and the general modus operandi of the Economic Development Board, It is obvious that the setting up of the framework itself by no means provides a guarantee of success. Successful industrialisation depends on many other factors - maintenance of political stability, industrial peace, and a general effort by everyone to work harder and with greater skill. This means that the success or failure of our venture basically depends on whether every citizen in Singapore is prepared to make his contribution to the national effort.

Sir, I beg to move.

Question proposed.

6.46 p.m.

Tun Lim Yew Hock: Mr Speaker, Sir, on the question of industrialisation, we have given our views at previous sittings of this Assembly, and they are quite well known. But I think it is worth while to repeat here the most important factors that can contribute to a successful industrialisation policy.

The Minister for Finance himself said nearly two years ago that the success of any industrialisation plan depends on a common market, and this morning, in reply to a question from the Opposition, it was made known for the first time that there had been only-

Dr Goh Keng Swee: Sir, on a point of information.

Mr Speaker: If the Member will give way.

Tun Lim Yew Hock resumed his seat.

Dr Goh Keng Swee: The Member for Cairnhill quoted me as saying that, the success of our industrialisation depends on a common market. May I ask him, Sir, to quote chapter and verse so that my words can be judged in their exact context and in accurate terms?

Tun Lim Yew Hock: I am not able to quote the exact words, but it was clear from the Minister's speech at the time when he proudly acclaimed in this Assembly that he had thought of the wonderful plan for a common market which was vital - I think the word used could have been "vital" - to the success of any industrialisation plan. And then with titters from the Government Benchers that they, the bright boys of the P.A.P., would then have discussions with the Federation Government. That was nearly two years ago. And only this morning, as a result of a question asked-

Dr Goh Keng Swee: Sir, on a point of information.

Mr Speaker: If the Member will give way.

Tun Lim Yew Hock: No. It was only this morning, in reply to a question from the Opposition, that we became aware of the fact that after the ministerial meeting some two years ago there had been discussions at official level. Three meetings took place between June and August 1960. After that, there have been no more meetings but a lot of correspondence has been exchanged on various points that require further clarification or elucidation. But anyway, it was admitted this morning that after August 1960 there had been no further meetings, official or otherwise. When the Development Plan of the Government was brought up for debate at the previous sitting of this Assembly, no murmur whatsoever was made of the fate of the discussions on the Common Commodity Market. And today, it is significant that in moving the Bill the Minister pointed out the difficulties or the prerequisites for the success of the Bill; but he forgot his great brainchild - the Common Commodity Market with the Federation of Malaya. May I therefore ask him, in his reply, if he would stand up and say that there is no hope of a Common Market? Perhaps the people of Singapore can be resigned to that fate instead of being kept in suspense whether or not such a Common Market is to come into being.

The Minister himself said that there are many things needed to guarantee the success of the Plan. That was towards the end of his speech. First of all, he said there must be political stability. There has been a lot of political instability, if political stability is to be measured in terms of 39 against 12 Members, then they can call it political stability. But the way I look at political stability is that it is a Government that knows its mind. It is a Government that knows how to look after all interests and not just indulge in class hatred. It is a Government that has Ministers who do not stand up and proudly say, "If a company or such and such a union does not behave, I will see to it that all immigration passes will be withdrawn. So look out!" That is not political stability. That engenders political instability. Of course, Sir, I do not say that the Minister for Labour and Law was wrong in feeling so exasperated when he was told of what had happened by his colleague who was then and who still is the adviser to this newly-formed Oil Workers Union. But if he really has the interest of the workers and the country at heart, there is certainly another more effective way to settle the problem. Surely he could send for the employer and give him a ticking-off in his office and say, "Look here, you should not do this; you should not do that; you should not do the other," instead of doing it P.A.P.-style - "Either or!" Industrial peace! Ever since the P.A.P came into power, there has been more industrial unrest than there has ever been before.

Mr Byrne: Rubbish!

Dr Goh Keng Swee: Rubbish!

Tun Lim Yew Hock: Sir I can understand that the truth sometimes hurts, and hurts rather deeply.

Mr Byrne: Remember the Hock Lee riots!

Tun Lim Yew Hock: The hon. Minister for Finance himself can - may I be so bold as to suggest to him? - look up the statistics from his colleague, the Minister for Labour and Law, and he will be able to see whether there have been more strikes or less strikes. Of course, there should have been less strikes because the T.U.C. is a P.A.P. controlled T.U.C.! I do not know whether it is a good thing for great P.A.P. trade union leaders to be at the same time political leaders and try to mix politics with trade unionism. While they are here, they say, "We represent the Government," and while they are in the A.U.P.E., they say, "We represent the workers." And the poor man there [Indicating] keeps on telling his colleague, "I want more and more money to be returned to the civil servants in respect of the arbitrary pay cut." But when he sits here, he says, "I am in favour of the pay cut." I do not know whether it is a good thing for industrial peace. I do not know, because the P.A.P. have great brains and they know what they are doing!

If we want a successful industrialisation programme to be carried out, it is vital - it is accepted by the Government - that the conditions must be of such a character that there can be no fear of confidence in the Government being lost. The Minister has brought up the question of market potential. He himself has admitted that Singapore has a very small market potential, but that because of the situation in Singapore there are great prospects of selling goods manufactured in Singapore overseas. Perhaps the Minister is not aware that it takes a very, very long time to sell a new product.

Sir, we do not oppose the Bill, because we feel that something has to be done to help the country to solve the unemployment problem, but we do urge upon the Government to be more realistic in their approach to the problem and to see to it that all interests must be well and truly balanced.

6.56 p.m.

Mr Rajah: Mr Speaker, Sir, I just want to dwell on one or two points. The first point is something which the Minister himself made in his speech. He said that it is necessary, in the existing economic circumstances which Singapore finds itself, for the Government to play a positive and direct role in the economic development of Singapore in order to stem the difficult unemployment situation. Sir, he then went on to develop that by saying how these positive and direct steps will be taken. While he was making his speech, I was looking at the Bill which he had placed before the Assembly. I was looking particularly at clause 12 of the Bill which sets out seriatim the powers of the Board. I may be wrong, Sir, I may be a pettifogging lawyer. But sometimes it is necessary that pettifogging lawyers do propound their views, because it is eventually the Courts that decide these things, and the Courts are presided over by lawyers who might not necessarily be pettifogging but are yet lawyers.

Looking at clause 12. Mr Speaker, Sir, I get the impression that there is nothing in it which would enable the Board to play the positive and direct role in industry which the Minister has indicated should be done if the economy of this place is to reach some sort of stability. As far as I can see, all the powers are given either to underwrite the issue of stocks and shares of industrial enterprises or to guarantee loans raised by industrial enterprises, or to grant loans to industrial enterprises, or to sell shares, and manage and invest in shares of industrial enterprises, or to acquire land, or:

`to act as agent for the Government or, with its approval, for any other person in the transaction of any business with an industrial enterprise in respect of loans or advances granted or debentures subscribed by the Government or such other person;'.

So that, in effect, the role which the Board would play as envisaged by the Bill, Mr Speaker, Sir, seems to be this: to come to the help of an industrial enterprise in circumstances when that industrial enterprise cannot stand on its own feet and needs or solicits the help of Government. "Industrial enterprise" is expressly defined in clause 2 which says:

`[It] means any sole-proprietorship, partnership, company or co-operative society wheresoever registered or incorporated under any law for the time being in force relating to companies, co-operative societies or businesses and engaged in mining or in the manufacture or processing of goods;'.

So that, in effect, Mr Speaker, an industrial enterprise is either a partnership or a registered company or some society which has a statutory entity, which indulges either in mining or in the manufacture or processing of goods. Sir, as I see the Bill, there seems to be a divergence and a cleavage between what the Minister has said on its Second Reading and what in effect will be the legal powers of the Board. There are other matters, Mr Speaker, which I will raise in Committee.

The second point which I wish to touch upon, particularly as a matter of principle, is clause 15 of the Bill which is charting a new course in legislation. Mr Speaker, I have repeatedly complained in this House about what the present Government is doing to our courts of law: that it is taking away from them matters which normally under any democratic government should go to them, and matters which having gone to them should be left in an unfettered manner for them to do justice to according to the law of the land.

So, imagine my surprise, Mr Speaker, when I received this Bill. In going through clause 15, it seems to me that the P.A.P. Government, that is, our present Government, has gone one better than it has been doing up till now. It is seeking to make our courts of justice a rubber stamp. Yes, Mr Speaker, I use the words deliberately - a rubber stamp. Clause 15 goes on to say that if certain applications are made to the Court, certain orders shall be made by the Court; certain interim injunctions shall be given; and certain orders shall issue from the Judges. Mr Speaker, Sir, this is the first time I have seen legislation which places a mandatory obligation on a Judge in the way of what he shall decide or shall not decide. It is all the more heinous because the very things that they are going to the Courts for are powers which are already vested in the Board itself under clause 13. In those circumstances, I cannot see why clause 15 is necessary whereby the Courts become a rubber stamp.

Now, this is a matter of principle. Mr Speaker. This is not an isolated matter which only affects this Bill only. The independence of the Judiciary, Mr Speaker, Sir, is one of the corner-stones on which parliamentary democracy rests. If we destroy the confidence of the public in the independence - I repeat the word again - independence of action and of thought of our Judges, then our whole concept of parliamentary democracy as we understand it must surely fall. If clause 15 is passed into law, and if our Judges become rubber stamps, I submit, with respect to you, Mr Speaker. Sir, that the administration of justice in this country will be held in contempt, and any justice which becomes a matter of contempt will lose the respect of the people. Once our Judges become objects of contempt in the eyes of the public, then the main essential on which our democratic concepts rests will be undermined.

Mr Speaker: Dr Goh, in reply?

Dr Goh Keng Swee: Mr Speaker, Sir, I do not think the Opposition have made any valuable contribution to the debate on this Bill. But first let me dispose of the Member for Hong Lim.

Tun Lim Yew Hock: The Member for Fairer Park.

Dr Goh Keng Swee: The Member for Cairnhill. Sir, he has given a completely subjective, highly inaccurate and completely malicious account of what our-

Mr Speaker: Order. I did notice that the Minister for Finance was fuming in his chair. But I do not think that entitles him to use unparliamentary expressions in this Assembly. To allege that an hon. Member of this House has been guilty of some malicious act is unparliamentary. That should be withdrawn.

Dr Goh Keng Swee: I withdraw the objectionable epithet, Mr Speaker.

Sir, what the Member for Cairnhill has done is to say that we, the Government, had made certain claims as to the virtue of the Common Commodity Market proposals. Speaking purely from memory and when challenged to quote the actual remarks which I had made, the Member for Cairnhill was completely unable to do so. Therefore, I shall dismiss his remarks as being purely a political tactic to discredit the Government. We had made no such claims and I challenge the Member for Cairnhill, when he gets his copy of Hansard and sees his own remarks in cold print, to compare his statement of what I was supposed to have said on the Common Market with what I did actually say about it. And let him come again and defend the propositions that he has made before the Assembly.

The Member for Cairnhill made a second point about the importance of political stability and the various ways in which the P.A.P. Government had failed to achieve it. This again is so obviously untrue that it does not call for any detailed comment. All I need say is that we need no lessons on how to maintain political stability from the S.P.A. or the former Labour Front members who, during their brief and inglorious term of office, had provided an object lesson on how to bring about a state of complete political instability and chaos. If we need any lesson from Members of the Opposition bench, it is on how to bring about political instability through sheer incapacity to govern Singapore wisely, firmly and justly.

The third point made by the Member for Cairnhill is that during the tenure of office of the present Government, far from achieving industrial peace, what has happened is that there has been a record of strikes, and he said that statistics of labour disputes will bear this out. Sir, I am a statistician by profession and I have made a particular effort to keep correct the statistics of man-days lost as a result of strikes - statistics which are furnished by my colleague, the Minister for Labour and Law. May I remind the Member for Cairnhill that when his Government was in power, we then achieved the all-time record of industrial disputes, that in the year 1956 no less than one million man-days of work were lost through strikes? That was an absolute record which exceeded the most riotous days of the post-war era when the Malayan Communist Party openly challenged the then colonial Government.

Now, I turn to the comments of the Member for Farrer Park. I am unable to follow the legal arguments that he made, namely, that the provisions of clause 12, taken in conjunction with the provisions of clause 2, will not enable the Economic Development Board to perform the function of direct and positive participation in industry. Sir, may I refer him to clause 12 which empowers the Board:

`to grant loans or advances to, or subscribe to stocks, shares, bonds or debentures of industrial enterprises;'.

This is continued in paragraph (d), which empowers the Board:

`to manage, control or supervise industrial enterprises by nominating directors or advisers or otherwise collaborating with them or entering into partnerships or any other arrangement for jointly working with them;'.

Clearly, these two paragraphs empower the Board to participate directly and positively in the management and establishment of industry, whether existing ones or new ones. But it may be that the point that the Member for Farrer Park was making is that in clause 2 industrial enterprise is so defined as to include only existing enterprises and not new ones. I do not know whether that was the point he was making. With respect, Sir, if that was the point, then may I just say that this is really a legal quibble, because there are many ways of bringing into existence enterprises of one form or another, so that once their legal existence is established by the simple process of administration under any law, then the Board will have the power to perform the functions which I have enumerated. But I do not think the Member for Fairer Park was making a substantial point there. His principal attack was against clause 15, which he said reduced the courts to the position of being a rubber stamp, and undermined the independence of the Judiciary.

Sir, clause 15 is not a clause which was created de novo by us. I cannot recollect offhand the actual precedent on which this clause was based. But to the best of my recollection, it was either in the Industrial Finance Corporation Ordinance of the Government of Pakistan or some similar Ordinance in the Government of India. I would say. Sir, speaking purely as a layman with perhaps some trepidation in these matters, that the courts would be reduced to a rubber stamp only if the decision in any dispute between the Board and the other party can legally under this Ordinance be resolved only in favour of the Board, and there is nothing in clause 15 to provide for this. All that clause 15 provides for is that certain steps should be taken in regard to the attachment of property to ensure that the assets against which loans are made shall be conducted in a proper and orderly way. Further, there is provision for safeguards in that the orders which are made under this clause are interim orders and that the Economic Development Board will have to show cause. I think these are adequate safeguards, and to say that this provision undermines the independence of the Judiciary is really carrying matters too far. The independence of the Judiciary, as I understand it, means that a Judge, when he makes his decision in any matter placed before him, should be able to do so without pressure or duress from the Government. For instance, the appointment, dismissal and disciplinary action in regard to Judges, should be removed as far as possible from the authority of the Executive do not think, Mr Speaker, Sir, that the Member for Fairer Park has made out a case in support of his contention.

Question put, and agreed to.

Bill accordingly read a Second time.