NEW INVESTORS AND INVESTMENTS (Particulars)

Mr Inderjit Singh asked the Minister for Trade and Industry (a) if he will indicate the number of new investors and amount of investment Singapore attracted from January to May 1998 and how these figures compare to the projected figures; (b) what is the outlook for new investments for the rest of the year; and (c) whether we lost any investors because of the high property cost and the high land rentals charged by the Jurong Town Corporation and the Housing and Development Board.

The Second Minister for Trade and Industry (BG George Yong-Boon Yeo): Mr Speaker, Sir, based on the latest figures, 107 new projects in manufacturing were committed from January to June 1998. These investments are expected to generate a value-added of $2.6 billion and employment of 10,500, of which 41% of the jobs are for knowledge and skilled workers. The fixed asset investments totalled $3.9 billion.

In the exportable services sector, 48 projects were committed as of June this year. When fully realised, they will yield a value-added of $823 million and create 2,600 jobs, 66% of which are for knowledge and skilled workers. These projects are expected to record a total business spending of $723 million.

A large proportion of investments this year are based on decisions made last year. Investments for the rest of 1998, 1999 and beyond will depend on further developments of the situation in Asia.

When companies evaluate whether to invest in Singapore, land cost or rental is only one out of many factors that are taken into consideration. Other factors such as capabilities, wage rates, infrastructure support and market potential are important considerations as well. Certainly, the appreciation of the Singapore dollar against the regional currencies has affected our cost competitiveness vis-a-vis other regional countries. This may have been one of the factors that have caused some companies to re-evaluate their investment plans. However, slower regional growth is the main factor that will cause a slowdown in investments that cater mainly to markets in the region.

Mr J. B. Jeyaretnam (Non-Constituency Member): May I ask the Minister whether any of the companies, who had made their decisions to invest here last year, have reconsidered their decisions and declined to come in at the present moment?

BG George Yong-Boon Yeo: There are some companies which have extended their decision-making process to take into account the current regional economic situation. But it is not clear at this point in time how much reduction in investments we will encounter this year as a result of it.

Mr Inderjit Singh (Ang Mo Kio): Sir, I would like to ask the Minister whether we have lost any investor who has cited land cost as a reason.

BG George Yong-Boon Yeo: Mr Speaker, Sir, as I said earlier, land cost is only one of many considerations. Whether land cost as a specific reason has caused an investment to be rescinded, I am not aware of.

Mr Inderjit Singh: Can I ask the Minister whether he feels that the land cost in Singapore is excessively high compared to our competitors, for example, in Taiwan where it is about four times cheaper, and in Kulim, Malaysia, which is about 20-30 times cheaper than in Singapore, and will this continue to be a serious problem for us to attract new investments in the future?

BG George Yong-Boon Yeo: Land cost is a factor, as I said earlier. Our objective in the coming months and years should be to lower our overall cost position. But as to the specific measures that we should take, I think we should wait for this afternoon's statement by the Finance Minister.