DEFENCE EXPENDITURE (Review)

Dr Lee Siew-Choh asked the First Deputy Prime Minister and Minister for Defence whether, in the light of the easing of tension all over the world, the Government has any plan to review the present expenditure on defence.

BG Lee Hsien Loong (for the First Deputy Prime Minister and Minister for Defence): Mr Speaker, Sir, the Government constantly reviews its defence expenditure to ensure that it gets the best value for every dollar spent. It strives to keep the SAF lean and efficient, in order to make best use of scarce manpower and limited funds for the security of the nation.

The momentous changes in the strategic situation in Europe, and the corresponding reduction of tension between NATO and the Warsaw Pact, have not been followed by any similar upheaval in the Asia Pacific. The US Defence Secretary, Mr Dick Cheney, said recently in the Philippines that while some cuts in the US military forces in Asia were being considered, the numbers would be relatively modest, as he did not "see the equivalent kind of change in Asia and the Pacific that we've seen in Europe".

In any case, Singapore has never based its defence policy on countering an opposing military bloc, unlike NATO and the Warsaw Pact. Our policy has always been to deter all potential aggressors, whoever they may be, from attacking or intimidating us.

Even if improved relations between the US and USSR lead the two superpowers to reduce their military forces in the region, it does not follow that other regional causes for tension and conflict will therefore disappear. These are regional causes, unrelated to the US and USSR.

The outcome of the Cambodian conflict is not yet certain, even though the war appears to be drawing to a close.

The territorial disputes over the Spratlys and Paracels islands have nothing to do with superpower rivalry. They are actually disputes over who owns the oil or gas which may lie undiscovered in the waters surrounding these islands. These disputes have been muted by the US presence in the region, including their military bases in the Philippines, Japan and South Korea.

If the US significantly cuts back its military forces in the region, this will not be a signal for Singapore also to reduce our forces. It will be reason for concern over a potentially destabilising change in the regional balance of power, one which may lead to other significant powers playing a more active role in the region.

Singapore is not alone in this view. The Malaysian Government shares this perspective. For example, Prime Minister Dr Mahathir Mohammed has said that it would be premature for the US to consider withdrawal from the bases in the Philippines, despite the apparent reduction in regional tensions brought on by heightened prospects of a Cambodian settlement and new peace overtures from the Soviet Union.

The Malaysian Armed Forces' Chief of Intelligence, General Datuk Abdul Rashid Raja, also recently expressed concern over the Spratlys and the Paracels, and the possibility that China may become more aggressive if the US reduces its role in the region. He said "the situation around us is not stable yet. The smaller countries still cannot feel secure yet. America's presence is certainly needed at least to balance other powers in the region". This is the Malaysian Armed Forces' Chief of Intelligence. He was interviewed in Utusan Malaysia on 2nd February 1990 and the report was carried in the Straits Times last week.

No other ASEAN country is slashing its defence expenditures, demobilising its armed forces, or acting on the assumption that it no longer faces any external security threats. It would be foolhardy for Singapore alone to do so. The Government therefore intends to maintain the limit on defence expenditure at 6% of the Gross Domestic Product. This figure has remained unchanged for many years. The money is needed to train troops, to operate, maintain and upgrade equipment and weapons, and to pay regular servicemen salaries commensurate with what they can earn in other civilian jobs. All this costs more each year.

With prudent financial management, the Government has always been able to fund all its other expenditures besides defence, without having to sacrifice any projects. However, this does not mean that MINDEF should automatically spend the entire 6% of GDP available for defence each year. The GDP is much larger now than it was a decade ago. A large part of the SAF has already been built up. MINDEF now has more flexibility to time the upgrading and replacement of SAF equipment and weapons, in order to get the best possible value for money. Depending on the SAF's needs, in some years we may not require to spend the entire 6% which has been set aside for defence. This will happen more often if the cost of military equipment does not escalate too fast, and if the economy continues to grow rapidly.

Dr Lee Siew-Choh: Does Singapore envisage any territorial disputes with other countries surrounding it in ASEAN?

BG Lee Hsien Loong: Mr Speaker, Sir, Singapore has no territorial ambitions. But I am sure the Members will have heard of Horsburgh Lighthouse or Pedra Branca belonging to Singapore over which from time to time issues have arisen with the Malaysian government.

Dr Lee Siew-Choh: Does it mean from what the Minister says that this dispute could lead to possible clashes and war in future?

BG Lee Hsien Loong: Mr Speaker, Sir, the Singapore Government does not intend to go to war with anybody, and the SAF is required whether or not we own Pedra Branca.

Dr Lee Siew-Choh: If other ASEAN countries should reduce their defence expenditure, would Singapore do the same?

BG Lee Hsien Loong: Mr Speaker, Sir, that is a purely hypothetical question.

Dr Lee Siew-Choh: It is the Minister who has been giving us a lot of hypothetical issues. In fact, what I ask the Minister is whether there is any way of reducing defence expenditure without jeopardising the security of Singapore.

BG Lee Hsien Loong: Mr Speaker, Sir, we seek such ways all the time. Mindef works very hard at making sure it only spends money on what it needs. And if the Member has any further ideas on how to improve our defence capability and save money, we will be happy to hear from him.

Dr Lee Siew-Choh: May I suggest then, Sir, that the Minister form a high-powered committee to investigate into how we can reduce such defence expenditure and make the report public to the people of Singapore.

BG Lee Hsien Loong: Mr Speaker, Sir, every year during the Committee of Supply, the defence budget is up for debate. And every year Members have raised queries as to what we are doing, whether we need to do it, how we can do better. Dr Lee is a Member of this House and I look forward to hearing from him during the Committee of Supply.