ECONOMIC DEVELOPMENT BOARD (AMENDMENT) BILL

Order for Second Reading read.

5.38 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

This Bill seeks to amend the Economic Development Board Act so as to provide for:-

(a) the appointment of two Deputy Chairmen instead of one Deputy Chairman at present;

(b) the appointment of a member of the Board to act on behalf of the Chairman outside Singapore in relation to any matters or class of matters;

(c) the appointment of not less than four and not more than ten members of the Board (apart from the Chairman and the Director) instead of six as at present; and

(d) the manner in which the fixing of the common seal of the Board is to be authenticated.

The Bill also makes clear that the Annual Report of the Board will be based on its operations of the preceding financial year.

These organisational changes are necessary to enable the Economic Development Board to step up its industrial promotion efforts at home and abroad.

Since its establishment in 1961, the Economic Development Board has been able to attract considerable foreign investments into industry in Singapore. Foreign investments and fixed assets in the manufacturing sector rose from $10 million in 1964 to $2,930 million by the end of 1974, an average annual increase of 40%.

High oil prices, inflation and massive unemployment, even in industrialised countries, have slowed down our ability to attract foreign investments in industry into Singapore. Industrial investment commitments in 1974 amounted to $829 million, less than the figure of $957 million the year before. Though the prospects of foreign investments into Singapore are currently less encouraging, the international division of labour will go on inexorably. Industries in Japan, Europe and North America, which find that they can no longer compete if they continue manufacturing in their own countries, will seek to locate their operations overseas in countries where the factors of production are more in their favour.

Singapore, located in the midst of a rapidly growing region of great mineral and agricultural potential, is one of perhaps no more than a dozen countries in the world in which multi-national and even smaller-sized companies will consider it in their interest to position themselves to face the future, changed irreversibly by the oil producers of OPEC.

The oil producers' successful change of the terms of trade so much in their favour and so swiftly marks an economic watershed. It presents Singapore with immediate as well as long-term opportunities. The more urgent search for oil has greatly benefited Singapore's marine and offshore-oil-rigs construction and logistics industries. In recent months, the Economic Development Board's investment centre in Houston, which is noted for the number of US oil industry companies located there, has been most active. In the long-term, the higher price of oil will raise the cost of sea or air transportation substantially. Energy and mineral intensive industries would have to be located nearer the sources of raw materials or nearer the markets for their products. Singapore, with its well-developed human and physical infrastructure in the midst of a resource rich and populous region, is well placed to compete for such industries.

The relatively higher price of energy should help also to improve the competitive position of our established industries. The textiles and garments, electrical and electronic, and woodworking industries have played and will continue to play a significant role in Singapore's industrialisation. Value added by these three groups of industries rose from 21% in 1970 to 31% in 1974 of total value added by the manufacturing sector. They have been able to do this because, these industries have been continually improving their design and quality through heavier investment in machinery and technical training. Value added per worker in the textile and garment industries more than trebled from $1,960 in 1965 to $6,900 last year. Similarly, value added per worker in the woodworking industry, which progressed from simple sawmilling to wood-moulding, almost doubled from $4,170 in 1965 to $7,100 last year. Value added per worker in the electronics industry rose from $7,000 in 1965 to $18,000 last year as the industry advanced from component assembling to instrumentation and testing.

I have quoted these value added figures at some length because of a tendency to dismiss the so-called cheap textile and electronics industries. These industries far from declining should, in fact, grow even stronger. In future, all manufacturing industries spurred on by the higher price of oil would have to compete on the basis of organisation and equipment rather than simple unskilled labour. A relatively earlier start and nearness to energy sources would enable Singapore to compete on equal, if not better, terms with countries further away from Southeast Asia.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill.-[Mr Hon Sui Sen].

Bill considered in Committee; reported without amendment; read a Third time and passed.