HEAD N - MINISTRY OF FOREIGN AFFAIRS

Column: 1498

ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 2005 TO 31ST MARCH, 2006:

(Paper Cmd. 2 of 2005): Order read for consideration in Committee of Supply [3rd Allotted Day].

Column:1499

[Mr Speaker in the Chair]

**** Head N - Ministry of Foreign Affairs -

The Chairman: Head N - Ministry of Foreign Affairs. Mr Ravindran.

Mr R Ravindran (Marine Parade): Sir, I beg to move,

That the total sum to be allocated for Head N of the Estimates be reduced by $100.

Regional Outlook

Sir, the Asian region is full of optimism and great hope due to the economic growth being back on track and the regional giants China and India showing good economic growth.

China and India. With the rise of China and India in the region, both will flex their muscles and be respected as emerging global powers. China, with its growing economic and military capabilities, will be a big factor in regional calculations. One view is that China will seek to avoid conflict in the region and focus on economic growth and internal stability. The other view is that a strong China will seek to adjust regional power arrangements to its advantage, risk conflict with neighbours and some external powers in the region.

On the other hand, India will seek to expand its economic and military might too and seek greater engagement with ASEAN and the region. China and India will seek, in their own way, a greater involvement in regional matters and will want to be acknowledged as emerging powers. Both countries are keen to secure economic and natural resources in the world, and rivalry with each other and other powers to secure these natural resources will pose a challenge in the region.

The question arises then: how does Singapore, as a country and as part of

Column:1500

ASEAN, go about engaging the two countries in a manner that fits their growing power and desire to be recognised as global powers, if not regional powers? How will it fit in with our overall policy of keeping all big powers engaged in a region to ensure our economic prosperity and a peaceful region?

North East Asia. Sir, the triangular relationship between the US, China and Japan will underpin the security and geo-strategic framework in North East Asia. But with relations between Japan and China not being at their best, Japan proposing to amend its constitution to give them the mandate for the self defence forces to be deployed overseas, North Korea blowing hot and cold over its nuclear policy, and the Taiwan issue surfacing intermittently, North East Asia will certainly remain an area for potential big power confrontation. I would like to ask the Minister for his assessment of the state of affairs in North East Asia.

Next, on ASEAN. While I am glad to see the group moving ahead with good steam, I would like the Minister to give an update on the state of ASEAN, the progress of the ARF and new initiatives to engage the various regional and global powers in the dialogue.

I am happy that Singapore is engaging as part of ASEAN the different regions through APEC, ASEM and, very recently, through the Asia

Column:1501

Middle East Dialogue (AMED) and the proposed East Asia Summit (EAS). I would like to ask the Minister for an update on these dialogues and the new initiatives we can expect to bring the regional blocs together. I would like to ask the Minister on what is Singapore's position on the participating countries to be invited for the East Asia Summit.

Next, on Middle East. I am glad that Singapore has taken a keen interest in the Middle East and the Arab world, with SM Goh Chok Tong playing a leading role in opening up a new frontier in our relations there. I certainly look forward to Singapore strengthening our relations with many Middle Eastern countries who share similar visions and look forward to closer links. I would like to ask the Minister for an update on the new initiatives we will be embarking to develop closer relations with the Middle Eastern countries.

Sir, we are playing a pivotal role in ensuring that South East Asia continues to be a place of peace and prosperity. Our leaders are working very hard to ensure that Singapore's interest is respected, our views are given careful consideration in many capitals, and our geo-political strategic outlook taken into account when policies are drawn up. We are respected as an independent and sovereign country. We are, most importantly, seen as being just and fair in our dealings on international matters and in international organisations. This is due to good leadership in the past and present, and also having a team of good diplomats who understand and defend Singapore's vital interest at all times. I would like to take this opportunity to compliment the Ministry of Foreign Affairs and our diplomats for keeping the Singapore flag and our reputation flying high in the international arena at all times.

Strategic Review of Key Countries

Ms Irene Ng Phek Hoong (Tampines): Sir, Singapore's relations with Malaysia and Indonesia are very important with implications on the mood and development not only of the three countries but also of the South East Asian region. As a region, we are living in challenging times. On the security front, terrorism and piracy still pose a danger. On the economic front, the region is facing increasingly intense competition from low-cost countries such as China and India. Those

Column:1502

countries hit by the tsunami disaster, especially Indonesia, face the costly prospect of reconstruction. And politically, some countries, including Malaysia, Indonesia and Singapore, have just undergone political transition. But I would argue that we are in a better position today than we have been for a long time to forge a closer partnership with each other to build a stronger region. First, all three countries - Malaysia, Singapore, Indonesia - have new leaders who are forward looking and who have emphasised their resolve to strengthen relations further. Second, all three leaders have been able to demonstrate through their actions that the specific disagreements between their individual countries and Singapore should not be allowed to define the broader relationship and over-shadow the many areas that we cooperate with each other.

But some old thorny issues remain, and they can set back the good progress made if we are not careful. With Malaysia, the old issues are a legacy from the Mahathir era, and I am glad that Senior Minister Goh Chok Tong and Malaysian Prime Minister Abdullah Badawi have met recently to discuss the steps to take the talks forward. But I note that now even Johore wants to have a public say in the negotiations, as Johore Mentri Besar Abdul Ghani Othman was quoted as saying, "The state wants to be heard on three key areas - reallowing Singapore military aircraft into Malaysian airspace, the water price review and the proposed bridge." Sir, I am not sure that this state-centric approach will help the two countries to resolve the outstanding issues with the larger regional cooperation in mind. Indeed, much of the focus of the Malaysian media and Johore politicians seem to centre around the issue of the bridge. Previously, it was a crooked bridge, but now the Malaysian proposal is for a straight one. While I do not see why the Causeway should be demolished for this, I would like to ask the Minister if

Column:1503

there is any merit at all to this idea of a straight bridge, and if it can bring any benefit to Singapore as well, and the cost, taking into account the long-term view and the larger picture of regional cooperation. Sir, we will stand firm on fundamentals but we must be broad-minded enough to accommodate Malaysia's interests where our own national interests are not diminished.

As for Indonesia, the issue of the extradition treaty, among other issues, is also an old one, but we seem to have moved forward on this. According to newspaper reports, PM Lee Hsien Loong was quoted as saying that Singapore would sign a treaty with Indonesia following his meeting with the Indonesian President. Sir, Indonesia has, for nearly a decade, sought an extradition treaty with Singapore, but we have been reluctant to do so. Certainly, concluding an extradition treaty will allow both sides to focus on more important and pressing issues. Can I ask the Minister why Singapore has decided to go ahead to work on this treaty now at this time after years of expressing reluctance to do so?

I would also like to ask the Minister's update on our relations with China, US and India which have also been evolving.

ASEAN

Mr Tan Soo Khoon (East Coast): Sir, the reputation of ASEAN as a credible and effective regional body is a challenge that has confronted the organisation for many years and has been discussed in this House quite often. ASEAN meetings are unfortunately viewed, whether rightly or wrongly, often by outsiders as talk shops where officials hand out statements, speeches, declarations, joint communiques and memorandums of understanding, and little of substance is achieved. One has difficulty, in fact, keeping track of the scores of documents that are churned out at ASEAN Summits.

Column:1504

At ASEAN meetings, the underlying principle is that ASEAN must resolve problems and face challenges in the spirit of solidarity, cooperation and consensus building. These are nice words and the language that flows out at such meetings is inevitably couched in diplomatic language that sometimes tells you little.

A case in point is the issue of terrorism. It is a regional security issue that threatens all ASEAN countries. Yet, information and action from countries where the source of terrorism originates is difficult and slow to come by. Another case in point, hampered by the policy of non-interference in other member's affairs, Thailand's problems with Muslim insurgents in its south cannot be discussed at ASEAN level, although it is an issue that threatens to blow up and affect our member states.

12.15 pm

At each annual ASEAN summit, there is grandiose talk

of creating a common market and implementing a Free Trade Area. So many deadlines have been announced in the past - in fact, so many ideas and deadlines have been announced that I myself am confused whether, at times, ASEAN is talking about a FTA or a common market, or do they mean the same thing - the latest I hear is the creation of an ASEAN Economic, Social and Security Communities by 2020, but I thought that ASEAN first talked about a free trade area in 1976, and now after 29 years we are told we have to wait a further 15 years to attain some kind of economic community. So you can understand my confusion. Perhaps the next 15 years will allow time for ASEAN to set even later deadlines.

Another case in point that underlines ASEAN's credibility is Myanmar's membership. Even with the continual arrest of Aung San Suu Kyi by the military regime, ASEAN continues to pretend that

Column:1505

all is well and praises the efforts of the regime to bring about a transition to democracy. Here we have a person whose party won elections in 1990, and for 15 years has been under house arrest; so you have to really take it with a pinch of salt when the leaders of ASEAN make statements saying that what is happening in Myanmar is actually making progress towards democracy and political reform.

Now, the credibility stakes for ASEAN will be raised further next year because that is when Myanmar takes over the chairmanship of the organisation. Other countries have called Myanmar all sorts of names, some are so crude that I would not even mention them in the House. But already a number of ASEAN dialogue partners have said that they will not attend ASEAN meetings next year, including the ASEAN Regional Forum in Yangon next year.

So where does that leave ASEAN in the eyes of the world? Can ASEAN afford to be led by a member state which has little respect from the rest of the free world?

I believe that Singapore as one of the founding members of ASEAN - and certainly one of its more respected ones - can do much more to shake up the organisation and restore its credibility. We have to work with like-minded members to jolt Myanmar into action.

In the 1990s, ASEAN applied pressure on Cambodia and pushed the leaders towards reform by accommodating the opposition before it allowed Cambodia to join ASEAN. Likewise, we can do the same with Myanmar.

Without these concrete steps, I am afraid ASEAN will continue to be viewed as a paper mill churning out piles and piles of documents that attract little attention not only from outsiders, but

Column:1506

even from its own people. It is time for ASEAN to take concrete steps so that its legitimacy can be further enhanced.

The Senior Parliamentary Secretary to the Minister for Education and Minister for Manpower (Mr Hawazi Daipi): Sir, I share Members' - Mr Ravindran and Mr Tan Soo Khoon - concern over the future growth and influence of ASEAN. An enlarged ASEAN is already facing a problem of integration economically and politically because of the differing developments of the member countries. Now, ASEAN, collectively, has also to contend with new poles of influence and development, namely, China, and possibly in future India too.

How would ASEAN strengthen relations among its members, bearing in mind all these two major challenges? And how would ASEAN members collectively strengthen its role vis-a-vis China and India in future? Would including China and India in its regional initiative speed up the decline of its importance in the region, including in East Asia?

ASEAN + 3

Mr Chay Wai Chuen (Tanjong Pagar): Mr Chairman, Sir, I share some of the views expressed just now by Mr Tan Soo Khoon on ASEAN's regional bloc issues. My concern here is, with the prospect of this new framework that has been discussed or raised - ASEAN + 3, including dialogues with China, Japan and Korea - how does the Ministry look at this new enlarged framework in the context of further and future development of ASEAN?

Obviously, the initial discussion on ASEAN + 3 has been on currencies, capital flows and investments in the region. But something could perhaps be developed out of this to enable ASEAN to move towards a new level. We have seen the development of EU and over the last decade, the tremendous development. Of

Column:1507

course, there are problems always with integration but, at least, attempts are made truly and honestly forward in integrating economies, bringing down tariffs, and allowing free flow of factors of production, and so on.

My view is, with all these talks and dialogues which have been going on in ASEAN for years, leading not necessarily to very visible goal-posts, should we spearhead or really review what could be done? What is the Ministry's thinking towards this future development, and whether in the development of things in the world, if we continue to talk and not walk the talk, would ASEAN run the risk of being irrelevant?

ASEAN and Myanmar

Mr Ravindran: Sir, the removal of the Prime Minister of Myanmar, General Khin Nyunt, and a number of his closest associates in October and November last year, is seen as a setback for the process of national reconciliation within the country. There is no timeline for the roadmap to implement the promised changes and the proposed National Convention appears not to include the key partners to ensure a lasting solution.

The SPDC seems to be going nowhere and has failed to keep its commitment to its own population and to the international community.

Many members of ASEAN have expressed disillusionment over the developments in Myanmar. If I may quote the Foreign Minister of Malaysia, Mr Syed Hamid Albar - he was quoted as saying in 2004:

"If Myanmar does not address the problem, then not only Myanmar is going to be affected but the credibility and integrity of ASEAN as a whole is going to be affected."

In 2003, the Foreign Minister of Indonesia, Mr Hassan Wirajuda, stated:

Column:1508

"Burma is a dilemma for ASEAN, which must be tackled now."

Sir, Myanmar, if nothing changes, will become the Chairman of ASEAN in 2006. It will mean hosting of the summit of ASEAN leaders there. As it is, Myanmar has been a thorn in ASEAN's relations with the EU and the US. ASEAN's reputation has been tarnished by Myanmar's continued membership.

Sir, I am a member of the ASEAN Inter-Parliamentary Caucus for Democracy on Myanmar which is seeking to bring about democratic change in Myanmar. My colleague, Mr Charles Chong, is also on the caucus. So I would like to ask the Minister for his view on Myanmar becoming the Chairman of ASEAN in 2006 and whether there is any proposal being considered to bypass Myanmar as Chairman. If not, how is ASEAN preparing itself to handle the international fallout by allowing Myanmar to become the Chairman of ASEAN in 2006?

Relations with Malaysia, Indonesia and Thailand

Mr Leong Horn Kee (Bishan-Toa Payoh): Mr Chairman, Sir, it is important for any country to maintain close and cordial relations with its neighbours, but without compromising on its sovereign rights and interests. Therefore, I would like to discuss our relations with our three closest neighbours, namely, Malaysia, Indonesia and Thailand.

Senior Minister, Mr Goh Chok Tong has recently met with Malaysia's Prime Minister Abdullah Badawi. We read from the newspaper reports that they had a very good and fruitful meeting. However, no details were released on the progress of their discussions on bilateral issues. In particular, I believe Singaporeans are interested to know whether we have made progress on the water agreement discussions. Singaporeans are relieved to

Column:1509

hear from our leaders that we have sufficient water and would not need to renew the 2011 Water Agreement with Malaysia; and by 2061, Singapore would have developed more water resources. The other issue of public interest is Malaysia's proposal to build the so-called "crooked bridge" to replace the present bridge, and now it is going to be a straight bridge but still a new bridge. All Singaporeans feel that the existing causeway is serving us perfectly, so why the need to spend about $1 billion to build either a crooked or a straight bridge?

On Indonesia, the Indonesian President, Susilo Bambang Yudhoyono visited Singapore recently. He was thankful for the fast response and great help given by Singapore during the recent tsunami disaster. He has called our Prime Minister "his good friend". President Yudhoyono signed an Investment Guarantee Agreement (IGA) with Singapore and has urged Singapore businessmen to invest in Indonesia. Both sides agreed to work on an extradition treaty. I share Ms Irene Ng's queries on the purpose of this treaty.

Sir, Indonesia is a close neighbour with a population of 238 million people. It represents a huge market which Singapore can do business with. Therefore, it is encouraging to read about the positive attitude of the current Indonesian President towards Singapore. This is a sharp contrast to his predecessors, one of whom called Singapore "the Little Red Dot".

As for Thailand, Prime Minister Thaksin Shinawatra has performed well in his country's recent general elections. However, he is facing some difficulties in dealing with the Muslim fundamentalists in South Thailand. Thailand is another potential business partner with a huge population of 65 million people. Premier Thaksin is now one of the most senior

Column:1510

leaders in ASEAN. Whether he would succeed in solving the problems in southern Thailand as well as our relations with our neighbours, like Malaysia and Indonesia, will have a bearing on the geopolitics and progress of ASEAN as an economic and political bloc.

Mr Chairman, Sir, we know that politics by its nature is always in a state of flux. I would like to hear from the Foreign Affairs Minister what he sees as the near and medium term developments that will affect Singapore's relations and interests vis-a-vis our three closest neighbours, namely, Malaysia, Indonesia and Thailand.

Singapore-Indonesia-Malaysia Relations

Mr Ravindran: Sir, our relations with our two closest neighbours are of great significance to us. The feeling among regional observers is that ties are now warm and will only get better. With new leaders at the helm of the three countries, there is a sense that there is good personal chemistry between our Prime Minister Lee Hsien Loong, Prime Minister Badawi and President Bambang Yudhoyono.

We have shown that we are true friends of Indonesia in the overwhelming manner the Government and the people responded to the tsunami victims in Aceh. I was very impressed by the very large Singapore turnout for the business dialogue and the lecture delivered by President Bambang recently. It shows that the business community shares the optimism in the relations between the two countries.

The new Indonesian government is focusing on economic growth to generate jobs and ensure stability for the country. I am happy to note that we have concluded the Investment Guarantee Agreement with Indonesia and that we are in discussion with the Indonesian government on some of the bilateral issues, such

Column:1511

as the extradition treaty and on delineating the borderlines between the two countries. I would like to ask the Minister to give us an update on the state of relations between the two countries and whether there has been any progress on other outstanding bilateral issues. In particular, I would like to ask the Minister how Singapore is working with Indonesia in helping in the economic priority areas outlined by the new Indonesian government.

Sir, our relations with the Badawi government look warm and there is a sense of optimism that many of the bilateral issues with Malaysia will be resolved. The many commercial deals between the companies in the two countries signal that there is good support for this process from the relevant quarters. The numerous visits by Ministers and civil servants from both ends augur well for even better relations. I would like to ask the Minister for an update on the state of relations on the bilateral talks on unresolved issues and his assessment on new areas of cooperation between the two countries.

The Chairman: Your time is up, Mr Ravindran. Mr Hawazi.

Mr Hawazi Daipi: Sir, like Mr Ravindran and Mr Leong Horn Kee, I would like to have an update on bilateral relations with Malaysia and Indonesia. I believe our relations with these countries - our closest neighbours - are the most important to us. Recent developments have given much hope for even improved relations with both countries. New leadership in all the three countries has shown resolve to improve bilateral relations. But, we all know, bilateral issues remain unresolved.

Beyond the pleasant atmospherics, what is the prospect for the resolution of bilateral issues with Indonesia and Malaysia, particularly on the issue of

Column:1512

future water supply from Malaysia? What new initiatives beyond current bilateral issues and relations that can be pursued with both Indonesia and Malaysia that can help us strengthen our relations with them even further?

12.30 pm

The Chairman: Dr Ong Chit Chung, you have two cuts.

Take them together. 6 minutes.

Singapore-Malaysia Relationship

Dr Ong Chit Chung (Jurong): Sir, Singapore-Malaysia ties constitute a very important component of our foreign relations and our relationship with Malaysia has taken a positive turn after the assumption of leadership by Prime Minister Abdullah Badawi.

Water, Sir, is no more an intractable problem or issue as far as we are concerned. We can move ahead on this. The reclamation issue at the Straits is largely settled. The Pedra Branca issue is brought to the International Court of Justice. However, there is still a host of issues to be negotiated, for example, CPF payments to Malaysians, the use of Malaysian air space by the Singapore Air Force, the Malayan railway land and the bridge at the Causeway.

I would like to ask the Minister how these issues are to be tackled and what is the timeframe he has in mind. Will they be negotiated item by item or will they be negotiated as a package? Is the Minister hopeful that these issues will be concluded amicably and in good time? What is the outcome of Senior Minister Goh Chok Tong's recent second meeting with Prime Minister Abdullah Badawi?

Prime Minister Abdullah Badawi said that there are some low-lying fruits which are easy to reach and should be picked first. May I ask the Minister what, in his

Column:1513

view, are these low-lying fruits, and on whose trees are these low-lying fruits? And who are going to pick them first? Are they ripe for the picking?

A veteran Johor politician, Datuk Shahrir Abdul Samad, has recently suggested that the Malaysian proposal for the crooked bridge, which was Dr Mahathir's initiative, be dropped. But he was immediately attacked by his fellow politicians. In my view, Datuk Shahrir Abdul Samad's position is logical and very sensible, and very much what anyone with some common sense would support. Even the opposition PAS commented that the bridge was a wasteful project and was not necessary at all.

I would like to ask whether the Minister agrees with Datuk Shahrir and lends his important support to such a sensible move.

May I carry on, Sir?

The Chairman: Yes.

Singapore-PRC Relationship

Dr Ong Chit Chung: Thank you. Sir, Singapore has firmly, consistently and clearly supported the one-China policy. Singapore was amongst the first to make it a policy to recognise Beijing as the rightful and only authority for "one China".

Come what may, Singapore has not shifted from this position. We have never been swayed by Taipei or the pro-Taipei lobbyist groups throughout the world. We were therefore perplexed by the storm created over an unofficial private visit by our then Deputy Prime Minister to Taiwan.

Sir, both Singapore and China have much to gain through close economic cooperation and investments and mutual understanding and respect. We are a small country compared to the PRC,

Column:1514

which is a rising economic power. But countries, big and small, should always respect each other's sovereignty and interests. I am therefore glad that the storm has subsided and calm has prevailed.

I read recently that the PRC Ambassador to Singapore commented that the Singapore-PRC relationship is back to normal. I hope that the relationship is not only back to normal, but will grow and deepen over time. Singapore can invest further in the PRC, leveraging on the PRC's resources, manpower and markets, and thereby help to create more jobs in the PRC, while PRC can send thousands upon thousands of their tourists to Singapore, which I am sure we would all welcome.

I wish to ask the Minister on his reading of Singapore-PRC relationship, how we can manage this relationship and move forward. Are there any concrete or practical plans to deepen the relationship between Singapore and PRC?

Dr Teo Ho Pin (Holland-Bukit Panjang): Sir, as a small sovereign country, Singapore has adopted the correct foreign policy to make friends with as many countries as possible and develop win-win relationships. This policy of strengthening bilateral relations with countries, especially the growing economies, like China and India, will become more crucial as globalisation brings countries closer. Although Singapore always tries to develop bilateral relations based on mutual respect and mutual benefit, we do encounter occasional hiccups in bilateral relations due to changing circumstances, such as change in political leadership and domestic situations in various countries.

Sir, the recent private visit by Mr Lee Hsien Loong to Taiwan is an example of how bilateral relations could be affected due to changing circumstances in other countries. Despite Singapore maintaining

Column:1515

a consistent one-China policy, the visit had caused some uneasiness in China. Sir, sometimes our actions and viewpoints are not clearly understood, or deliberately being misunderstood by others, thus causing strains in bilateral relations. In a volatile world, we must always be careful and sensitive in maintaining and further strengthening our bilateral relations with other countries. We must also put in more efforts to better understand and respect the national interests of other countries.

Sir, I would like to suggest a simple strategy which we can adopt in strengthening bilateral relations with other countries. That is to practise what a Chinese phrase states: duo cheng zan, shao pi ping . What it means is "More compliments and less criticisms". Sir, compliments will normally help to strengthen ties, while criticisms tend to strain relationships. If all Singaporeans adopt this simple philosophy, I believe we can avert many awkward situations where political leaders or people of other countries have to defend their political or national positions at the expense of bilateral positions.

Sir, I wish to make the following suggestions on strengthening our bilateral ties with China. First, we should encourage more interactions between Singapore and China at all levels - political leaders, Government officials, business community and people. Networking at all levels will help strengthen friendships among our people and thus deepening bilateral ties. We can provide more scholarships for students and teacher exchanges. Second, we must facilitate more business partnerships among businessmen of the two countries to conduct businesses both in Singapore and China. Third, we can tap on the network of our Chinese clan associations in Singapore to further develop ties with community-based organisations in China. This will further promote understanding of

Column:1516

both our cultures and values. Fourth, more dialogues or exchange of views or experiences can be conducted through the Internet, such as online social network or e-forum to connect the people of the two countries.

Sir, although it is difficult to measure and quantify the strength of bilateral relations, I would urge the Government to establish some indicators where we can measure the progress of our efforts in foreign relations. These could be in the form of a number of people involved in various exchange programmes, number of visitors, surveys on mutual understanding of peoples of different countries or the value of business partnerships or projects.

Sir, I wish to seek the following clarifications from the Ministry: (1) What is the status of bilateral relations between Singapore and China? (2) What initiatives are taken by the Government to further strengthen bilateral relations? (3) Are there plans to further improve people-to-people relations of both countries?

Singapore-PRC-Taiwan Relations

Mr Leong Horn Kee: Sir, this issue of our relations with PRC and Taiwan is rather sensitive. It is important that the matter be understood properly.

China is an important trading partner, not just for Singapore but to the rest of the world. Its economy is growing at a very fast pace. I understand that the greater China, including Hong Kong and Macau, is already Singapore's largest trading partner, overtaking the USA. Some analysts have projected that, by 2025, that means, 20 years' time, China will become the world's largest economy, surpassing the USA.

Singapore has always maintained cordial relations with both PRC and Taiwan. However, last year, we encountered some relations problems with

Column:1517

PRC when PM Lee Hsien Loong visited Taiwan on a private trip. Last month, in February, it was reported that China has said it wanted to move forward its relations with Singapore and welcome PM Lee Hsien Loong to visit China frequently. This call was made by Chinese Premier Wen Jiabao after a meeting with our Foreign Affairs Minister, Mr George Yeo, when he visited China. It was also mentioned that China is interested to have a bilateral free trade agreement with Singapore under the framework of the ASEAN-China Free Trade Agreement. These are encouraging developments. In fact, as said by Dr Ong Chit Chung, the Chinese Ambassador to Singapore, Mr Zhang Yun, was reported to have said that, recently, China's relations with Singapore has completely returned to normal. It said here, " Zhang Yun da shi: xin zhong guan xi wan quan hui fu zheng chang " - Singapore-China relations completely back to normal.

While we wish to maintain cordial relations with PRC because of its economic potential, we also have to preserve our sovereign rights to deal with other countries and entities. For example, we have on-going relations with Taiwan. I am curious to note that Taiwan President Chen Shuibian was reported to have said that he agreed to cooperate with the Taiwanese Opposition leader James Soong to work towards better cross-straits relations with China. Actually, both China and Taiwan have huge stakes in peace across the straits. It was reported that Taiwan invests about US$3 billion each year in mainland China. And China is now the biggest purchaser of Taiwanese goods. About 500,000 Taiwanese live in Shanghai and the Yangtze River Delta.

Given the recent events and developments with respect to China and Taiwan, I would like to hear from the Minister an

Column:1518

update on our relations between ourselves and China and Taiwan.

Peace Prospect in the Middle East

Mr Hawazi Daipi: Sir, I would like to commend the Ministry of Foreign Affairs for continuously looking for new ways and new areas of cooperation with the world. In the process, we safeguard our interests and we enlarge our role. Our move to strengthen relations with the Middle East, both at bilateral and regional level, is a case in point. Senior Minister Mr Goh Chok Tong has had a number of successful visits to Middle Eastern countries in the past one year. Singapore and, of course, the regions, both Asia and Middle East, can benefit from this improved political and economic relationship. But much of it depends on whether peace prevails in the Middle East. There has been some prospect. Apparently, to me, Israel and the Palestinian authority have renewed negotiations for peace. The Gulf states are developing at ferverish rate. But there are of course a few questions over Iraq and the possible US attack on Iran. I would like the Minister to give his assessment on the prospect for peace in the Middle East and how we can benefit from possible peace in the region.

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Sir, let me thank Members for their thoughtful and helpful comments about our foreign policy. Let me first reply to Mr Ravindran and Ms Irene Ng on changes in the strategic landscape, the impact on Singapore and our response to these changes.

The last 15 years have seen a steady dissolution of the old Cold World War Order. Gradually emerging in its place is a new configuration, the full shape of which is still not very clear. Globalisation has thrown up new challenges and opportunities for all countries. Global terrorism, particularly Jihadist terrorism, is a dangerous counter current which we have to confront together with other countries.

Column:1519

Exciting changes are taking place in Asia, Europe, the Middle East and South America. Without wanting to sound too optimistic, the regional and global landscape is looking brighter with reasonably stable relations among the major powers, the slight easing of tension in cross-straits relations, an improvement in Indo-Pakistan relations and some positive developments in the Middle East.

Asia is, on the whole, doing well. The economies of East Asia have largely recovered from the Asian financial crisis. Despite SARS and the recent tsunami, our economy has shown remarkable resilience. We are becoming more integrated. The rise of China and India is the big story, as many Members have pointed out, in fact, probably the biggest ever in human history. Already, China has overtaken the US as the largest export market for an increasing number of Asian economies. China has just become Japan's largest trading partner.

But the rise of China and India will also bring about a shift in the global and regional balance of power and create new tensions. We need new institutional arrangements in the world and in the region to accommodate the peaceful re-emergence of these two giants. For Singapore, we now have an unprecedented opportunity to increase significantly our international space. Singapore, as we know, was established by the East India Company from India for the China trade in the 19th century.

There is a new East-West trade flowing, indeed, a much larger one, for which we are well positioned geographically and culturally. Step by step, we are recovering all the links which created modern Singapore - our links to Southeast Asia, China, India, indeed, the entire subcontinent and the Middle East. If we continue to make the right moves in the public and private sectors, our international, political, economic and cultural space will be greatly expanded in the coming years.

Column:1520

12.45 pm

The key elements in our foreign policy must be:

(1) Working with our neighbours to integrate ASEAN. And ASEAN, for all its imperfections, remains, as pointed out by Mr Tan Soo Khoon and others, very important to us;

(2) Strengthening our links to the advanced economies of the US, Japan, Europe, Australia and New Zealand. We do not talk about them very much at this COS, but they remain very important to us;

(3) Building new links to Northeast Asia, South Asia, the Middle East and South America;

(4) And also supporting better global governance through the UN and the WTO.

Let me touch briefly on each of these elements.

ASEAN

ASEAN is a "paper machine", as Mr Tan pointed out. Sometimes, it is understandable that we should be impatient with its elliptical processes, that we seem to spend a lot of time talking, backtracking and then moving forward again, not always moving in a straight upward course. But if we take a step back and look at ASEAN in its historical development, it has been very good for all of Southeast Asia. When President Soekarno was leading Indonesia, ASEAN was not possible because he had a certain view of the Nusantara in the region. Under President Soeharto, Indonesia promoted regionalism, and so ASEAN was born. ASEAN was only possible because Indonesia, the largest country, showed restraint, accommodating countries big and small. So, Brunei when it became independent, immediately was asked to join ASEAN.

Column:1521

During the Cold War, when Vietnamese divisions crossed the Mekong and threatened us, ASEAN was galvanised to action at the UN and other international forums and helped maintain the peace which enabled us to develop economically for many years. Then, when the Indo-China war ended, to our initial surprise, one of the first things that Vietnam did was to ask to apply to join ASEAN. And even though it is by no means a perfect organisation, relations within the region have been kept soft. We do not have armies massing along borders.

If you compare ASEAN as a regional grouping with similar groupings in South America or other parts of the world, we are probably the most successful grouping among developing countries. And when we are suddenly seized by big issues like SARS or the tsunami, the instinct to coalesce is now deep in us.

So while I agree with Mr Tan that we should push harder and bring forward our deadlines, I would not discount or under-rate the importance of ASEAN to all of us in Southeast Asia. If we look ahead to the future, as we see the re-emergence of China and India presenting us with new challenges, we see ASEAN as becoming even more important in the future. When the leaders met in Bali, they issued the Second Bali Concord. Yes, there were high-minded expressions of our desire to form the ASEAN Economic Community, ASEAN Security Community and an ASEAN Socio-Cultural Community. But even though these are broad statements, there will be follow-up. Bit by bit, our lines of communication will interconnect, our standards will be harmonised, our tariffs are coming down, and a habit of consultation will define the way we interact with one another in Southeast Asia. That habit is very important. During the Asian financial crisis, when Indonesia went through a very trying period and many of us worried about

Column:1522

whether ASEAN would remain viable, the meetings that we had programmed for kept us going together, and maintained a certain steady course of action.

Therefore, Sir, a strong integrated ASEAN is at the heart of our overall strategy in our foreign policy. Without such an ASEAN, Singapore would find it much more difficult to take advantage of the new opportunities in the world. Worse, a weak ASEAN means that Southeast Asia would be balkanised, and new security problems would appear. For this reason, Singapore is a tireless supporter of ASEAN's political, economic and social integration.

Mr Tan Soo Khoon asked what is the difference between the Free Trade Area and the Economic Community. The Free Trade Area expresses a common desire to bring tariffs down. Tariffs are coming down all over the world anyway. But the Economic Community takes us a step further into the areas which go beyond tariffs, to services, to the harmonisation of standards and increasingly, to the settlement of disputes in an institutional way. And although this was not noticed by many people, at Bali, the leaders made an important decision: for the first time, trade disputes would be referred to independent dispute settlement panels instead of being resolved by Ministers, because with Ministers, problems tend to be blurred and ambiguous decisions made. Little by little now, because disputes will go to these panels, the way agreements are drafted legally will become very important, and in the coming years, an ASEAN jurisprudence of resolving trade disputes will grow.

We are studying closely the early steps taken by the Europeans - the Coal and Steel Community, the Common Market, and the European Community. I don't think we will ever become like the European Union, but the coming steps of ASEAN may follow quite closely the early steps of the European Community.

Column:1523

Within ASEAN, as many hon. Members have pointed out, we need to build stronger relations with our immediate neighbours, in particular with Indonesia and Malaysia. And let me now touch on each in turn.

Indonesia

As Mr Ravindran and Mr Leong Horn Kee pointed out, President Yudhoyono's recent visit to Singapore was a great success. He gave a lecture and a business seminar and both were very well attended. Many guests had to be turned away. President Yudhoyono wants Singapore to be a major partner in Indonesia's economic development. Now, between MTI and Indonesia's Economic Ministries, many things are being cooked. President Yudhoyono thanked us for the assistance we rendered to Indonesia after the tsunami. On a number of strategic issues, like the East Asia Summit, we share common positions. We have stepped up bilateral cooperation across a wide field. Recently, Minister Tharman Shanmugaratnam was in Indonesia to sign an agreement on cooperation between our education institutions - so start early, start with young people, so that we will know each other better.

However, there are a few bilateral issues which are complex and would take time to resolve. One such issue is the extradition treaty raised by Ms Irene Ng and Mr Leong Horn Kee. It is not an easy agreement to negotiate, which is why we avoided it for many years. Then about two years ago, PM Goh and President Megawati decided that it was time to begin working on the extradition treaty. And we are committed to concluding expeditiously an extradition treaty with Indonesia which is in line with the provisions of our domestic laws and beneficial to both sides. But the negotiations will have to define clearly the offences which are extraditable. And we want terrorism to be included. We must

Column:1524

take care to ensure that an agreement meant to further bilateral relations will not end up causing serious misunderstanding later. Because once an extradition treaty is in place, the courts in each country may have to sit in judgment of the judges, prosecutors and police of the other country. So, rather than papering over our differences, in rushing to conclude an agreement, we had better be very careful about the details so that when the agreement is in place, it will enhance bilateral relations, not cause new problems for the future.

We have also started technical discussions on boundary delimitation between the two countries. Both PM Lee and President Yudhoyono do not want existing bilateral issues to overshadow the overall positive relationship and hinder the progress of new initiatives which are mutually beneficial, such as air services and tourism cooperation. And as pointed out by some Members, the signing of the Investment Guarantee Agreement during President Yudhoyono's recent visit to Singapore sent a good signal to investors on future bilateral cooperation.

Malaysia

On our bilateral relations with Malaysia raised by Mr Ravindran, Mr Leong Horn Kee, Mr Hawazi Daipi and Dr Ong Chit Chung, in fact virtually by every MP, they have improved since Mr Abdullah Badawi took over as Prime Minister in October 2003. After a lapse of many years, we resumed the annual games between Singapore's MFA and Malaysia's Wisma Putra. I had to pick up my golf clubs again. Datuk Syed Hamid said, "Look, instead of the Singapore team versus the Malaysia team, we have combined teams." So I partnered him and he was a very good partner, giving me mulligans. He encouraged me to relax and so, I played better than I expected.

During PM Lee's introductory visit to Malaysia last October, the two leaders

Column:1525

agreed that Singapore and Malaysia should explore new areas of cooperation and look ahead rather than be held back by old problems. Yes, the old problems have got to be tackled but let us see them in perspective and let us not hold everything hostage to these old issues. That is a practical, constructive approach which will benefit both sides.

Senior Minister Goh has met Prime Minister Abdullah Badawi twice since to discuss the outstanding bilateral issues. And the most recent meeting took place just a few days ago. They had a constructive discussion - I am choosing my words very carefully - and agreed on the steps to move discussions forward. Both sides also agreed not to publicise the details of the discussions at this juncture. I know many of you want my views on the "straight" bridge, the "crooked" bridge, the Causeway, water, airspace, the railway agreement, and so on. But I have nothing new to add. Prof. Jayakumar has briefed this House fulsomely in many previous sessions. Those considerations continue to apply. Our positions have been clearly and openly stated and well known to the House. But at the same time, there are discussions going on; it is best that we do not politicise them. As Ms Irene Ng said, it does not take very much for some of our friends across the Causeway to make all sorts of comments at the drop of a hat. They are not necessarily helpful to bilateral negotiations even though we may be very tempted to respond quickly to them. But, for the time being, since both sides are having good discussions, let us be a little patient and

let this continue. In the end, the solutions must benefit both sides and not disadvantage either side. I fully agree with Syed Hamid that the recent talks went well.

1.00 pm

Our political and economic links with Thailand, the Philippines, Brunei and

Column:1526

Vietnam have also grown stronger. PM Lee had good meetings in his introductory visits to these four countries. Thailand shares our desire to "fast-forward" ASEAN. We were very honoured by the exceptional hospitality extended by the Thai King and the Thai government to President Nathan during his recent state visit to Thailand. And as Mr Leong Horn Kee pointed out, we have deep economic relations with Thailand.

As for the problem of Southern Thailand, that is a complex problem. I was very pleased to read a few days ago that Prime Minister Thaksin has appointed former PM Anand Panyarachun to chair a committee to study this problem in depth and to make recommendations to Bangkok.

On the Philippines, when PM Lee was in Manila, President Arroyo expressed a strong desire to boost economic ties between the two countries. And we were delighted when His Majesty, the Sultan of Brunei, accepted an Honorary Doctorate from NUS in January expressing the warm and easy relations between the two countries. Our relations with Vietnam have also become increasingly substantive. In recent years, Singapore has become a major investor in Vietnam. The Vietnamese Government would like to see better connectivity between our two economies.

Mr Tan Soo Khoon and Mr Chay Wai Chuen raised concerns about the danger of ASEAN becoming irrelevant in the face of new challenges in the world. What is our strategy in ASEAN? Our strategy in ASEAN is to make Southeast Asia the fulcrum for a new architecture of peace and cooperation in Asia. And it is a new Asia - from an Asia long colonised by imperial powers, each part reporting to the metropolitan power, the East Indies reporting to Holland, Singapore, Malaya to London and so on; to an Asia which became independent after the war, during

Column:1527

which big countries like China, India, Vietnam and Indonesia withdrew to rediscover themselves; and now after the Cold War, their re-entry on the world stage. It is a huge and magnificent re-entry. What we are seeing now in China, Vietnam, India and Indonesia - the old links all being restored - people moving up and down, rediscovering their own past and past connections. I have been watching when I was in MTI, the restoration of links between India and China, and how the trade ties have been shooting up exponentially. Even seemingly insoluble problems, like their border demarcation, are being seriously discussed now at the highest levels. So, in this new Asia, which is an opportunity and also a challenge that is being watched closely by Europe and America, we are trying to create a new architecture which best maximises the life chances for all of us in ASEAN.

What are our strategies? We are 10 countries, very different from each other, disparate, but situated between the two great civilisational areas of East Asia and South Asia. Historically, we received influences from both. We threaten nobody and therefore we can be friends with everybody. Our strategy is to put ourselves at the centre, so that others who want to deal with each other come through us. Because the climate here is warm and balmy, and the culture is cosmopolitan, people can interact freely and in an informal way.

Take, for example, the relations among the three Northeast Asian countries of China, Korea and Japan - all Confucian societies, eyeing each other suspiciously, having relations which are tense and formal. There is no regular forum where their leaders meet, except when they come down to our summit meetings - ASEAN + 1, ASEAN + 3. In recent years, they have institutionalised the + 3 Breakfast Meeting on the side where the three leaders meet in our "house".

Column:1528

We have good relations with North America, the Sub-continent, Australia and New Zealand. That is what we must always try to have because the greater the number of major powers in our house, the more comfortable our lives will be, the greater will be the options available to each and every one of us.

Mr Hawazi Daipi spoke of the increasing economic competition from China and India and its impact on ASEAN. Will it weaken ASEAN or will it strengthen ASEAN? I believe it will strengthen ASEAN, because when we watch these two countries loom larger and larger, there is a certain worry that if we do not act, we would be at a serious and severe disadvantage.

If you look at ASEAN's history, it is always the external challenge which unites us. First, there was Soekarno in Indonesia, then the Cold War and the Indo-China War, then crises like SARS and the tsunami. And for the future, we must be able to carve out our own place in the sun. So I believe that the emergence of China and India will have a very good, positive effect on the ASEAN construction. Each of us by himself is too small to be treated on any basis of equality by the great powers. But united, we have got to be taken seriously.

In the end, the key is not what we said or the agreements we sign but our economic competitiveness. At the last ASEAN Summit in Vientiane, the ASEAN 6 agreed to advance their integration in 11 priority sectors from 2010 to 2007. But I agree with Mr Tan Soo Khoon that a lot more needs to be done. Strategically, we should be patient, but tactically we should be impatient. We must also help the newer member states to catch up. Singapore has been giving technical assistance to new ASEAN member states through the Initiative for ASEAN Integration.

Column:1529

Singapore has been playing an active role in strengthening ASEAN's links to all the major powers. All the FTAs that we negotiate with the major powers have this as a long-term objective. ASEAN's Dialogue Partnerships, the ASEAN + mechanisms and the ASEAN Regional Forum were all founded on this principle: to put ASEAN at the centre, to make it the "hub" so that from here, there are many "spokes" to the wider region and beyond.

Mr Chay asked how Singapore's interests are being served in an ASEAN + 3 framework. Well, by linking ASEAN to Northeast Asia, for example, we benefit from their economic development. If you look at their economic weights, they are much bigger than we are. In fact, the collective GDP of ASEAN is only one-tenth that of Northeast Asia. So we should latch on to others, Northeast Asia, Japan, US, Europe, Australia and New Zealand in order to maximise the opportunities available for our own companies and individuals.

But the key is to have a deep solidarity. Yes, from time to time there are problems. There are always bilateral problems between neighbours, just as we have issues with Malaysia and Indonesia. And Thailand has issues with Malaysia, Cambodia and Myanmar. And Vietnam has problems with others and so on. This is normal. This is part of state craft. So long as there is a deep sense of solidarity, and on major issues we stick together, then this construction of putting ASEAN as the hub in Asia can be achieved. And Singapore as a hub in ASEAN which is a hub in Asia, is the best possible world for us, which is why ASEAN's interests and our interests completely coincide.

The East Asia Summit (EAS), to be held in KL at the end of the year, presents another opportunity for ASEAN to be the hub. But, as pointed out by Mr Ravindran

Column:1530

and Ms Irene Ng, this is only provided we conceive the EAS well. If the EAS has a membership no different from that of ASEAN + 3, then it will weaken ASEAN. Proposals to have the EAS discuss the big issues leaving ASEAN + 3 to discuss the small issues will weaken ASEAN further. It is also important that the EAS should not be seen by the US, India, Europe and others to be an exclusive East Asian closed grouping because if it is perceived to be such a grouping, it will create all kinds of unnecessary problems for us. For these various reasons, Singapore supports the inclusion of India, Australia and New Zealand in the EAS. Their inclusion will keep ASEAN at the centre and put it beyond doubt that we are externally-oriented and inclusive in our deep construction.

Myanmar

Let me now, with a heavy heart, talk about Myanmar. I listened carefully to the points made by Mr Ravindran and Mr Tan Soo Khoon about Myanmar's chairmanship of ASEAN next year. We have a problem. Although we have not formally discussed this in ASEAN, I know that many of the Foreign Ministers in ASEAN worry about it. Syed Hamid and Pak Hassan Wirajuda have expressed their views openly; most of the others have not. Myanmar reconvened its National Convention on 17th February 2005. It is not yet clear what the way forward would be. And as Mr Tan Soo Khoon pointed out, Aung San Suu Kyi remains in detention. We do not want to interfere in the domestic affairs of other countries. We recognise that the domestic situation in Myanmar is complicated; there are many ethnic groups, there are insurgencies, there are private armies and, in the end, it is for the people of Myanmar themselves to decide on their own destiny. Unfortunately, the much-publicised Roadmap has no timeframe and therefore it is of limited utility and the good efforts of the UN to facilitate and

Column:1531

advance the national reconciliation process in Myanmar have so far yielded very little.

The reason why we are concerned is that what happens in Myanmar affects ASEAN as a whole and our relationship with our Dialogue Partners. Last year, ASEAN countries took a firm position with the EU that Myanmar could not be excluded from the Asia-Europe Meeting in Hanoi. We stood our ground and we succeeded. But subsequent developments in Yangon undermined our position. I hope that the ASEAN spirit of consultation and consensus will enable us to find a solution for next year. Unless the Myanmar authorities handle the situation carefully, ASEAN's credibility and cohesion would be jeopardised. The Foreign Ministers will be meeting in retreat next month in Cebu, Philippines, and I expect that they will be discussing this subject behind closed doors.

US, Japan, Europe, Australia and New Zealand

Mr Ravindran asked about our relations with the US and the EU. Our relations with the advanced countries are on the whole excellent. They remain the most important source of investment and knowledge for us. Our ties with the US are broad and deep, founded on common strategic interests and reflected in our extensive defence and economic cooperation. The FTA we concluded has raised our relationship to a new level. We work closely together in the war against terrorism. Our relations with Japan are also strong and multi-faceted.

Japan remains a key source of investment and technology for Singapore and the rest of ASEAN. Our relations with the EU will be enhanced by the EU-Singapore Partnership and Cooperation Agreement which is currently being negotiated. As the EU gives more attention to Asia, Singapore's importance to Europe will grow. Our links to Australia and New Zealand have deep roots in history. As they become more

Column:1532

and more a part of Asia, their links to Singapore become more valuable. Our economic interests in Australia are becoming quite substantial. President Nathan will be making a state visit to Australia next week.

1.15 pm

China

Let me move on to China, which interests many MPs today. Let me give a broad summary on the current situation. As Dr Ong Chit Chung and Mr Leong Horn Kee pointed out, the PRC Ambassador here said recently in a media interview that ties between Singapore and China have been fully normalised after the setback last year. I agree with Ambassador Zhang that our bilateral relations are back on track. We now have a better understanding of each other's core interests and this has laid a strong foundation for building an even stronger relationship in the future.

Dr Teo Ho Pin asked what initiatives are being taken by the Government to further strengthen bilateral ties with China. I had a good visit to China just before Chinese New Year. I had lunch with Foreign Minister Li Zhaoxing and called on Premier Wen Jiabao. I also called on my old colleague Minister Bo Xi Lai, who is now in the Commerce Ministry. Before that I visited Liaoning where I was pleased to meet Party Secretary Li Keqiang whom I used to know when he was the First Secretary of the Chinese Communist Party Youth League. They were all warm and friendly.

A series of high-level exchanges are being planned for this year. We are looking forward to the visit of the Chairman of the National People's Congress Wu Bangguo in May, and as you know Wu Bangguo ranks number two in the Standing Committee. PM Lee and other Singapore leaders will also be visiting China later this year. I have

Column:1533

agreed with the Chinese that the second meeting of the Joint Council of Bilateral Cooperation (JCBC) which is under the direct supervision of PM Wen and PM Lee will be held in Singapore in the second half of the year, and the JCBC has a full agenda covering many things. So all the points which Dr Teo and others have raised will be included.

When I called on Premier Wen in Beijing, he also asked for the acceleration of the negotiation for a bilateral FTA within the framework of the ASEAN-China FTA. So I think we will follow up. When I met Secretary Li Keqiang in Liaoning, he asked for Singapore's strategic participation in the development of Changxing Island near Dalian and Yingkou, as part of their overall effort to rejuvenate China's Northeast. They want us to repeat Suzhou in the Northeast. But I do not think we should just replicate an old model because industrial parks are no longer so unique or special, but we should think of other ways to be helpful and to work on projects of cooperation that would benefit both sides.

Singapore's links to China continue to grow strongly. Last year, bilateral trade reached S$53 billion, making Singapore China's largest trading partner in Southeast Asia. Dr Teo also asked for people-to-people links and I think these should be expanded. Just this morning, I received a request from a Buddhist organisation to write a message because even among the monks there is more " lai lai, wang wang "

来来往往 (exchanges) and we should encourage all such similar contacts.

Mr Leong Horn Kee asked about our assessment of cross-straits relations. Although there are small signs of improvement, like the direct air links during the Chinese New Year period, the despatch of Vice Ministers from the Mainland to attend Koo Chen-foo's funeral

Column:1534

and the recent ten-point agreement between Chen Shui-bian and James Soong, which Mr Leong and Mr Ravindran referred to, the situation is still tense and delicate, and we should not underestimate how tense and delicate the situation is. The US said recently that it is opposed to China's enactment of an anti-secession law even before the actual legislation has come out. China protested the recent joint statement by the US and Japan on the Taiwan Straits. But in the end, the key to peaceful cross-straits relations is good US-China relations. We hope that all sides will exercise restraint in their actions so as to preserve the peace and stability across the straits which is so important to all of us in the region.

Mr Leong Horn Kee asked about our relations with Taiwan. Let me say that we have a one China policy and we have no official relations with Taiwan, but we have good relations with Taiwan.

India

Now let me turn to India, the other giant re-emerging, mentioned by Mr Ravindran and Ms Irene Ng. In the early 90s, when Prime Minister Narasimha Rao took India on a new course of development, we decided to position ourselves strategically for that new India, knowing full well that it is a process which will be long and winding. This morning I read the op-ed piece written by the Indian Finance Minister, Palaniappan Chidambaram, whom I have known for many years. He had just given a budget which was very well received by the Bombay Stock Market in which he talked about how, despite a bad monsoon last year, India achieved a growth rate of close to 7% and how India is now set on a new path to economic growth into the future. He said India has paid the fixed cost of democracy and so in the early years had a low growth rate, between 3% and 4%, but now they are set on a much faster growth path.

Column:1535

Our links with India are excellent, almost a love affair. And regardless of the administration, it is likely that in a few months we will conclude the comprehensive economic cooperation, which is our FTA with India and that would put our bilateral relationship on a higher plane.

We are also actively involved in strengthening India's links to ASEAN. You know, our High Commissioner, See Chak Mun, when he was posted to New Delhi, I told him, "Chak Mun, you are going to have a busy time." He smiled. That used to be quite a sedate posting and a hardship posting. Today it is a different Delhi and when I met Ambassador See recently, he said, "Boy, there is a constant procession of visits of political and business leaders in both directions." And I thought that expressed in a graphic way the state of bilateral relations today.

Reaching out to new partners

With globalisation, opportunities once too remote are now open to us. Since the change in our policy towards the Middle East less than two years ago, our links to that part of the world have grown rapidly. As Mr Hawazi Daipi said, the Middle East is a significant opportunity for our businessmen. But it is a complex region and we need to build up our knowledge of it. There are still many things which we do not understand and the risks should not be underestimated. We have got to watch political and economic developments carefully. Led by the Gulf States, many countries in the Middle East are now experimenting with economic liberalisation and some are looking towards Asia. More than most Singaporeans realise, we are often held up as an economic model for them to follow. My old Harvard Business School Professor Richard Vietor told me last year that whenever he conducts courses in the Middle East, they would insist that the

Column:1536

Singapore case be included. There are many things that we have to do to advance our interests in the Middle East. SM Goh Chok Tong's visits to Iran, the UAE, Egypt, Jordan, Bahrain and Saudi Arabia have opened new doors for us. The Asia-Middle East Dialogue (AMED) which SM Goh initiated, builds another bridge between the Middle East and our part of the world.

Mr Hawazi Daipi asked for my assessment of peace prospects in the Middle East. Well, although the clouds have by no means dispersed, we are beginning to see some silver linings. The outcome of the elections in Iraq was better than expected. There was a good turnout in spite of terror attacks and brutal intimidation by the insurgents. Some Sunni groups, which had earlier boycotted the elections, are now thinking of joining the process to draw up a new constitution.

There is also progress in Palestine, in the Israel-Palestinian peace process. The recent summit in Sharm el-Sheikh between Israeli Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas Abu Mazen was an important step forward. A ceasefire is now in place, it is still very delicate and both sides have taken small steps to rebuild trust and confidence. But we could be sure that there are trouble makers who want to sabotage the peace process. These are early days, and many things could still go wrong.

On Iran's nuclear issue, Teheran has agreed to suspend its uranium enrichment activities temporarily while its talks with the UK, France and Germany continue. Well, we hope that the talks will be successful. Iran needs to cooperate fully with the International Atomic Energy Agency (IAEA) and restore international confidence. The recent report of a fatwa by Grand Ayatollah Khamenei against Iran developing nuclear weapons could be significant.

Column:1537

Farther away, developments in South America bear watching. China has recently established strategic partnerships with Brazil and Argentina, which will involve investments of billions of dollars in infrastructure. In the coming years, trade between South America and Asia will grow and we should position Singapore for some of that flow. The FTAs we are discussing with Chile and Peru should help us. Our shipyards have become major players in Brazil's offshore oil industry and much of the frozen chicken meat in our markets now comes from Brazil.

Global governance

As a small country, we have a strong interest in promoting good global governance based on clear rules and the equality of nations. The proper functioning of international organisations like the UN and the WTO is very important to us. For this reason, we support the reform of the UN and the early conclusion of the Doha Development Agenda. Now that UNESCO is much better run, we have decided to rejoin it, first as an observer and later, in two or three years' time, as a full member. I am happy to report that the World Intellectual Property Organisation (WIPO) has recently decided to establish a regional facility in Singapore.

Seizing opportunities

In this new world, being small and being a city state is no longer such a great disadvantage. In fact, there are many advantages because we are spry and quick to exploit opportunities. We have a chance now to grow our links in all directions and enlarge our security and economic space. We do not know how long this period of history favourable to us will last. In the meantime, we should work hard and quickly to build new structures which keep the spaces open to our people. This is the reason why Singapore plays such an active role in

Column:1538

regional and international organisations. Our FTAs and other bilateral and regional arrangements also help us to preserve these spaces and to open new ones.

It is very important for our companies and for individual Singaporeans to follow up to exploit these new spaces. Foreign policy is a means, not an end in itself. Our job in the Foreign Ministry is to help create a framework and environment that enables our entrepreneurs to fan out, seize opportunities and take calculated risks. Some have already done so with success. I hope many more will follow.

Mr Tan Soo Khoon: Mr Chairman, I am glad that the Minister shares the same distress as Members of this House have over the situation in Myanmar. But I would like to ask him whether ASEAN or, more specifically, whether Singapore will advocate the position, within ASEAN, that unless Myanmar engages in very drastic political reforms, and immediately, and very specifically it means the release of Aung San Suu Kyi, then Myanmar should give up its chairmanship of ASEAN next year.

The second question I have for the Minister is, assuming nothing happens in Myanmar, what does he see as the prospects of the ASEAN Regional Forum next year since a number of countries have indicated that if no changes happen in Myanmar, they will not take part in the ARF.

Mr George Yong-Boon Yeo: I am in sympathy with Mr Tan Soo Khoon's view and impatience. But it is not the ASEAN way to put things in such a stark and confrontational manner. I am sure we will have meetings behind closed doors. Our words will be suitably lubricated with courtesies and acknowledgements of respect. But, I think in the end, I agree with Mr Tan that some hard messages have got to be put across because ASEAN and the ARF are being affected by what is

Column:1539

happening in Myanmar. If these are just domestic political problems, with no impact on the world outside, then it is for the Myanmar people to resolve them themselves. But there is an impact on us.

1.30 pm

Mdm Halimah Yacob (Jurong): Sir, a point of clarification. Apart from the issue of political democracy, a long-standing concern about Myanmar is forced labour. I would like to ask the Minister what influence do we have to try and transmit the message that forced labour is not desirable in Myanmar, and what role can we play in that respect, as we are an important member of the ASEAN community. There is international concern about the use of forced labour in Myanmar.

Mr George Yong-Boon Yeo: Mr Speaker, Sir, I think this is an issue best taken up through international organisations, like the ILO.

Mr Leong Horn Kee: Sir, the Minister said that I mentioned about two countries - Taiwan and the PRC - but it is not intended. I looked through my written speech but I never said that. But if I had said that in some off-the-cuff remarks, then I take it back, and it is not intended to mention Taiwan as a country. We have to be sensitive about this issue.

On the bilateral relations between Singapore and Malaysia, I am pleased to hear from the Minister that SM Goh and PM Badawi have made good progress. Perhaps he could tell us what is the next step. For example, do they have any forward plans when to meet again and the timeframe? Are we going to discuss again on a total package basis or on separate issue basis? I would also like to ask the Minister for an update on the Horsburgh Lighthouse issue. Is that part of the package for discussion? The last I heard was that the matter had gone for

Column:1540

international arbitration. Will the Minister be prepared to give us some update on the Horsburgh Lighthouse matter? I would like to hear from him. If not, I will file a question for oral answer.

Mr George Yong-Boon Yeo: Mr Speaker, Sir, I should be very disciplined in not answering Mr Leong Horn Kee's first question on details concerning bilateral talks. Some things are cooking and they are best done in the kitchen. Let us wait for the dishes to appear.

On Horsburgh Lighthouse, that has been taken up separately through the International Court of Justice. There are pleadings from both sides. There is a certain methodicity in the way the process is carried out. We are not likely to see a judgment on the case before the end of 2006.

Ms Irene Ng Phek Hoong: Sir, can I ask the Minister for his assessment of the US commitment to be engaged in this region? There has been some concern that the US might be distracted by the Middle Eastern process and the issues in Iraq, as well as the issue in Northeast Asia, and less attention might be paid to South East Asia. From the Minister's interactions with the US officials under the new Bush Administration, can I ask for his assessment?

Mr George Yong-Boon Yeo: In my recent visit to Washington DC, I had meetings with Secretary Condoleezza Rice, Deputy Secretary of State Ambassador Bob Zoellick who was a USTR and an old friend, the new National Security Adviser, Steve Hadley, and the Deputy Secretary of Defence, Paul Wolfowitz, who is an old friend of Singapore.

At all the meetings, East Asia was discussed. I have no doubt that there is a lot of interest in our region. Yes, of course, President Bush went over to Europe, and was extra charming to the

Column:1541

Europeans, because he now operates from the position of much greater strength after the successful elections in Iraq. He has got to get the Europeans to come along so that the peace process in the Middle East can be accelerated. But it does not mean that they are not interested in our part of the world. If Members had watched the way the US reacted to the tsunami, it was heart warming. Without US leadership, I do not think the overall response would have been what it turned out to be. And they were the only ones who could, at short notice, provide resources and assets on such a comprehensive scale. When I was at the Department of Defence, I met the military general who coordinated all the operations in the Indian Ocean. I said to him, "Well done!"

United Nations and Other International Bodies

Dr Warren Lee (Sembawang): Sir, I thank the Minister for actually having answered many of the questions about ASEAN and the worth of our participation in international organisations which I was going to ask. Certainly, Sir, it was a very proud day for Singapore when our flag was flown at the United Nations for the first time. But it has been many years now and Singapore does spend money and subscriptions to the UN, contributions to the Commonwealth, APEC and many such organisations. While we have heard the exposition of how these organisations help us in this Chamber today, I think many in the community might still find it a little abstruse and wonder just how some of these organisations can help us. Is the Commonwealth, for example, still relevant to us? Does it actually help in our relations with, say, Malaysia, Australia and New Zealand, which are Commonwealth countries in the region? How much of a say do we have, as a small country, in these large fora?

Column:1542

Sir, the UN comprises a lot of other organisations within the larger whole, like WHO, UNHCR, UNICEF. The Minister has just spoken about UNESCO and Interpol. How do these organisations fit in and how do they help us maintain our space in this world? I am reminded of the way that, say, Taiwan always wants to go and join these international organisations. Obviously, they think it is very important. How does our membership in these organisations help Singapore? For example, how are we faring in terms of our interests in air traffic control, communications, our place in international law, global warming and air traffic growth? Will these areas benefit from our participation in these international organisations and regional groupings?

We also heard how the Singapore International Foundation, SAF, Red Cross and other Singapore-based charities gained valuable goodwill for Singapore during the recent tsunami crisis. Singapore has never stinted in helping others whenever possible, given our limited resources. We have also become much more aware of our neighbours as a result of these efforts. How does MFA plan to build upon this groundswell of popular interest and goodwill to bring about better relations between Singapore and our neighbours?

Mr Chay Wai Chuen: Sir, I just want to add on to the points brought up by Dr Warren Lee.

On these international organisations and UN agencies, I would like to find out how we are being regarded in terms of our performance. Obviously, we are always ready to help. We are always ready to have the Singapore International Foundation and people willing to contribute effort and so on. But how are we actually regarded and to what extent the Ministry see this kind of efforts by

Column:1543

Singaporeans valuable in our international diplomacy?

Overseas Property

Prof. Ivan Png Paak Liang (Nominated Member): Sir, the Ministry's development budget includes over $40 million in each of FY 03 to FY 05 to purchase overseas properties. I do understand the need to house embassies and consulates. However, we always have a choice of lease or purchase. Would the Ministry please, first, clarify how much real estate it has acquired in foreign countries, and how much it plans to acquire in the future; and, second, report the gains and losses accruing from all foreign real estate from the time of purchase until the present date in Singapore dollars?

The Minister of State for Foreign Affairs (Mr Zainul Abidin Rasheed): Sir, first, allow me to thank the honourable Members for their interest in Singapore and MFA's work in the UN and International Organisations.

Singapore continues to play a key role in International Organisations such as the UN. We believe that the UN is an important component of the international system, upholding the rule of international law and safeguarding the rights of small and large states alike.

Singapore remains active in various international organisations and forums, such as in the UN, the International Maritime Organisation (IMO), International Civil Aviation Organisation (ICAO) and World Trade Organisation (WTO). In the case of ICAO, Singapore has been re-elected to the Council in 2004, and that is its highest decision making body. In telecommunications, the InfoComm Development Authority (IDA) represents Singapore at key meetings of the International Telecommunications Union (ITU), the principal international organi

Column:1544

sation dealing with telecommunication issues.

Singapore also chairs the UN working group that is working on a treaty to harmonise laws relating to contracts entered into by electronic means. Such a treaty will promote international trade by removing uncertainty on the legal aspects of matters such as Internet sales.

On environmental issues, Singapore supports UN initiatives like the UN Framework Convention on Climate Change, which we are party to since 1997. Although Singapore has yet to accede to the Kyoto Protocol, we are committed to becoming more carbon efficient.

Mr Chay asked how the UN and other international organisations view Singapore's contribution in international affairs. In fact, whenever I go round visiting other countries and meeting foreign dignitaries, one thing that clearly comes out in conversation is that they always ask about Prof. Tommy Koh, and they are reminded about his contributions at the UN and also at the Law of the Sea Conference, and many other officers like Kishore Mahbubani and Prof. Jayakumar. They all have made their mark when it comes to serving at International Organisations. I believe that these International Organisations view our role positively. We do what we can within our resource constraints. Our guiding principle continues to be to focus efforts in areas where we believe we can make a meaningful contribution.

Our recent contribution to the tsunami-related humanitarian efforts is one good example. We were the first to arrive at the affected areas to provide immediate relief and to open up the transport routes before the bulk of international assistance arrived. We worked closely with the UN specialised agencies, and offered them the use of our

Column:1545

air and naval bases as well as military assets on the ground. Various UN officials, including the Secretary General, Mr Kofi Annan, and the Under-Secretary General for Humanitarian Affairs, Jan Egeland, have expressed appreciation for our efforts.

In fact, in a recent letter to the Prime Minister to thank Singapore for its contributions, the Secretary General wrote, and I quote:

"Your Government responded ... magnificently, and provided the critical support required to sustain the United Nation's effort on the ground, particularly in terms of logistics, civil-military liaison and coordination."

1.45 pm

Singapore's cooperation with the World Health Organisation is another example of our positive relations with key International Organisations. Our effective handling of the SARS crisis in year 2003 have been noted and praised by various WHO officials. Last year, MOH collaborated with the WHO to host an international seminar on the public management of communicable diseases. That Singapore was chosen as a partner and venue for the seminar speaks for itself.

Sir, we, as an open economy, are heavily dependent on international trade. Singapore strongly supports an open rules-based multilateral trading system under the WTO. Our FTAs complement and strengthen the multilateral trade liberalisation process and do not contradict the WTO regime since they are WTO-consistent and WTO-plus. We see a dense network of intra-regional and cross-regional FTAs as facilitating free trade both at the regional and global levels. It provides better immediate market access and, we believe, improves the dynamics at the WTO towards concluding the Doha

Column:1546

Round by injecting a greater sense of urgency into the negotiations.

Our FTAs serve to expand our economic as well as political links. As a small country in Southeast Asia, our network of global FTAs helps put us on the world map. Our FTAs with the US, Japan, Korea, EFTA, Australia, NZ and Jordan are testimony to this fact. We want to ensure that Singapore is well plugged into the world of trade, finance, tax, transport and telecommunications. We will continue to forge these links, spanning the world. Our FTAs have created greater access to major and emerging markets for our companies. Companies anchored in Singapore can and should tap into this extensive network of global connections. This will reinforce our position as a strategic hub for business.

One of the major trends of this century, I think, as we all know, is regionalism. The Americas are coalescing with NAFTA and the FTAA as the core while Europe is engaged in an unprecedented experiment of pooling sovereignties. East Asia is also moving towards regionalism, although in a looser and less institutionalised form, as patterns of trade, investment, production decisions and a web of FTAs slowly but, inevitably, bring the region together.

The basic question we face is defining the nature of East Asian regionalism. We believe that it should be inclusive, forward-looking, adapting to and co-opting new developments in its midst, not least of which is India's rise. It is in Singapore's and ASEAN's interest to encourage deeper engagement of all the major powers. An outward-looking and open East Asian regionalism will help secure Singapore's economic as well as political future for the long-term.

On the question raised by Dr Warren Lee on how we can take advantage of goodwill following tsunami and inter-regional cooperation, I think Members are

Column:1547

aware of the reply I gave on 18th February in Parliament to MP Mdm Halimah Yacob's question on assistance to Aceh. Work is in progress. We have spoken about the relief efforts of the SAF and non-Government organisations, such as the Red Cross Society (SRCS) - apart from Indonesia, the SRCS has also sent relief missions to other tsunami-affected areas. As these countries begin to enter into a reconstruction phase, the Red Cross Society now leads a committee comprising representatives from various NGOs to ensure that the funds collected from the public are properly disbursed for the reconstruction projects. Among the planned projects are the rebuilding of schools, clinics and hospitals.

As we begin to implement the reconstruction projects for Indonesia, Sri Lanka and Maldives, Singapore will continue to work closely with these countries. I am confident that, through this close interaction, we will strengthen our warm relations with these countries and foster new opportunities for cooperation.

Sir, on the question of properties which we lease or buy overseas, we thank Prof. Ivan for that interest. We take various factors into account in our decision to lease or buy overseas properties. When good opportunities come by, we must be prepared to acquire such properties, particularly in countries where we have significant interests. For example, our Official Residence in London, which we at first rented from 1968, but was bought over recently at below valuation. Members may also like to know that this residence also happens to be the former residence of Earl Mountbatten. So it has also historical significance.

Generally, our preference is to lease when we set up a new overseas mission as time is needed to assess our long-term requirements. However, when our long-term requirements have been established,

Column:1548

our preference is to own them, where local conditions permit, because it gives us greater flexibility. MFA currently owns a total of 135 properties in 23 countries. But remember we have relations with more than 160 countries all over the world. In addition, it leases 117 properties in these countries. Our development cashflow is in the region of S$40 million per annum between FY 03 and FY 05 and comprises about 35% for purchases and 65% for development and upgrading of existing properties. Currently, 19 of our embassies and consulates are housed in owned properties while the remaining 18 are housed in leased premises. In FY 05, MFA intends to acquire three properties to house two embassies and one consulate.

The sale of overseas properties is governed by guidelines issued by, of course, MOF to ensure that the disposals do not constitute a draw on past Government reserves. The purchase of overseas properties is also governed by guidelines issued by MOF to ensure that purchases are at fair market value. There are also procedures to ensure that leases are contracted at fair market rent.

Finally, in the last five years, the total sale proceeds accruing from the sale of overseas properties was S$36.8 million, and it exceeded the total acquisition cost of S$12.5 million.

As we all know, diplomacy and foreign relations are more than just a matter of good bargains, good opportunities for better relations all round is our mission.

The Chairman: We have about 10 minutes. Any further clarifications? Yes, Dr Ong.

Dr Ong Chit Chung: Sir, can I ask the Minister for clarification on the proposed Singapore-Indonesia extradition treaty? I want to ask the Minister whether he is aware that many Indonesian businessmen invest in Singapore, put their funds in

Column:1549

Singapore and buy properties in Singapore. Will this proposed extradition treaty frighten them off and they may be worried that wrong charges will be preferred against them and therefore they may hesitate to invest or come to Singapore with their funds? This will have a negative impact on our economy. Will he care to comment or clarify?

Mr George Yong-Boon Yeo: Let me assure Dr Ong Chit Chung that these fears are our concerns and we will make sure that, in the negotiations, these fears are fully taken into account.

The Chairman: Mr Ravindran, would you like to withdraw your amendment?

Mr Ravindran: I would like to thank the Minister and Minister of State for their overview of the strategic outlook and for answering the specific questions on relations with specific countries. On that note, I would like to withdraw the amendment.

Amendment, by leave, withdrawn .

The sum of $287,841,660 for Head N ordered to stand part of the Main Estimates.

The sum of $46,000,000 for Head N ordered to stand part of the Development Estimates.