DEVELOPMENT ASSISTANCE PROGRAMME (Setting up)

Mr Ong Kian Min asked the Minister for Finance whether the Government will consider setting up a development assistance programme, which is funded within our means and resources, to serve as a mechanism for providing (i) loans, grants, technical cooperation and other forms of assistance for meaningful projects in the region; and (ii) humanitarian aid, where the situation requires.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, Singapore is a small economy relative to the neighbouring countries in the region. The assistance that we can give through loans, grants and humanitarian aid would naturally be limited. Singapore should focus on areas where our help can be most effective. This would principally be in giving technical training, helping local companies establish economic activities in these countries, and offering humanitarian assistance where the situation requires. These are already adequately covered by well-established mechanisms. There is no need to start yet another development assistance programme.

Singapore provides training and transfer of technical expertise to countries in the region through the Singapore Co-operation Programme (SCP), administered by the Ministry of Foreign Affairs. It comprises of two programmes, namely, the Third-Country Training Programme and the Technical Co-operation Programme. Approximately S$16.25 million has already been allocated to the Singapore Co-operation Programme this year, a considerable portion of which has been channelled towards Indonesia and Vietnam. Training is concentrated on areas where Singapore has special competency and experience, such as maritime management, information technology (IT), airport management, environmental management, economic and trade development and financial services. In 1997 alone, approximately 800 public officials from Indonesia, Malaysia, the Philippines, Thailand and Vietnam benefited from this programme.

Singapore also provides help through the Regionalisation Assistance Schemes administered by the Economic Development Board for local companies venturing into the region. The Assistance Schemes comprise seven support programmes for Overseas Project Identification, Overseas Project Implementation, and two support funds for Joint Venture Feasibility Studies in third countries. The aim is to provide selective aid in the form of economic incentives - mainly grants and financing schemes - for local enterprises to undertake meaningful and viable development projects and other investments. These will in turn help generate employment and contribute towards economic development in these countries. In FY97, the Government spent approximately S$18 million on the Regionalisation Assistance Schemes.

In respect of humanitarian aid, the Government has offered support in cash and kind towards humanitarian relief in various disasters around the world. These have typically been on the scale of tens of thousands of dollars. None have been of the magnitude of the S$12 million worth of rice and medicine Singapore is offering Indonesia over and above the S$5 million raised by the Singapore Red Cross.

Mrs Lim Hwee Hua (Marine Parade): I would like to ask the Minister if the ringgit deposits held by the Singapore Government can be deployed towards these or similar purposes for projects, say, in Malaysia and, if not, what is the status of Singapore's ringgit deposits in light of the recent capital control measures undertaken by the Malaysian government?

Dr Richard Hu Tsu Tau: The question is slightly outside the ambit of the question. However, I do not think that the ringgit holdings should be used for specific purposes because we can fund all our aid projects from our normal pool of funds. On the question of the status of our ringgit deposits, the Prime Minister has already said that the Government has several billion dollars worth of ringgit in its reserves. Some of these ringgit are in the form of on-shore deposits placed with Malaysian banks in Kuala Lumpur. But the bulk of it is held in ringgit deposits in Singapore banks.

The GIC is currently seeking clarification from the Malaysian authorities on the status of our on-shore ringgit deposits and GIC is also discussing with our local banks on ways in which the ringgit deposits can be repaid to the Government. However, whatever the outcome of these discussions, I can assure the Member that the GIC will not suffer any capital loss on its ringgit holdings.