ASIAN DEVELOPMENT FUND (Financial loan)

Dr Kanwaljit Soin asked the Minister for Finance if he will consider a change in Singapore's policy so that besides giving technical assistance to other Asian countries through the auspices of the Asian Development Bank, we begin to contribute a small amount as a financial loan to the Asian Development Fund for soft loans to Asia's poorer countries.

BG Lee Hsien Loong: Mr Speaker, Sir, Singapore offers technical assistance to developing Asian countries both on a bilateral basis such as through the Singapore-ASEAN Training Awards and the Indochina Assistance Fund, as well as multilaterally through international organisations like the ADB. Under these programmes, we have conducted courses in civil aviation and port management, among others, that are relevant to the needs of the developing countries.

We believe that this approach to assisting developing countries is more effective and better targeted than contributing soft loans to multilateral development agencies like the ADB and World Bank. Through our training programmes, we have been sharing our knowledge and skills directly with the countries to develop their human resources. We will have less control over the development impact of our contribution if the funds are channelled through a multilateral aid agency. Even if we start by donating a token sum to the ADF, as suggested by Dr Soin, the commitment will not be "one-off". It will grow with time as the funding needs of developing countries increase. We must ensure that the money we spend in aid, like all other items of public expenditure, is cost effective and produces the desired results.

Dr Kanwaljit Soin: Sir, does the Deputy Prime Minister remember that Singapore borrowed money from the ADF loan facility between 1968 and 1972? We were recipients of that. Should we not consider helping other countries since we have made use of that loan?

BG Lee Hsien Loong: We borrowed very small sums, Mr Speaker. We have prospered and developed through our own efforts by lifting ourselves up because really that is the way to prosper. If you want to do well, you do not do well through aid or cheap loans. You do well by working harder and uplifting yourself. You need assistance, technical training, that is helpful. We benefited from the Colombo Plan, and schemes like that. We believe that the best contribution we can make is similarly by offering technical training to developing countries in the region, and we have a substantial programme. Every year about 800 foreign people come to be trained in Singapore on various activities. Some longer, some shorter. And we believe that is the most cost effective way of doing it.

Dr Kanwaljit Soin: Would the Deputy Prime Minister agree that if you teach a man how to fish, he will still have to buy the fishing net?

BG Lee Hsien Loong: The best fishermen have very bankable propositions and have no difficulty raising money.

Dr Kanwaljit Soin: Sir, would the Deputy Prime Minister agree that to boost our international image, it would be proper for us to give some money as a soft loan because the other Tiger economies are also doing so, like Hong Kong, Taiwan and South Korea?

BG Lee Hsien Loong: Mr Speaker, Sir, in every country, the amount of aid and the disposition of the aid is a question. Is it being spent well? Does it achieve its objective in the target country? Does it further the interest of the donor country? So when we give assistance, I think we also have to ask similar questions. When we train somebody, we are helping him to acquire the skills, ability and the knowledge which will enable him to go back to his country and do something which should be of lasting importance to his country. His experience here, if it has been a happy one, and I think in many cases it has been, will make him, if not our ambassador, a friend of Singapore who will leave with his countrymen a good impression of Singapore and what Singaporeans can do to help.

We assist within our abilities. We may be not as undeveloped as we used to be, but we are not a country with resources to give away. So when we commit aid, it must be with a view to specific development outcomes and we believe that the scheme which we have is really the most effective one. Other countries have chosen to do it differently. Well, it is their choice. We do not argue that they should do it our way and I think they should not argue that we should do it their way.