[(proc text) Order read for consideration in Committee of Supply [Allotted Day]. (proc text)]
[Mdm Speaker in the Chair]
The Chairman: Supplementary Estimates of Expenditure for the financial year 1 April 2015 to 31 March 2016, contained in Paper Cmd 3 of 2016. As there are no amendments, I propose to take the Heads of Expenditure en bloc. I will first take Heads B, I, N, O, V, W and X of the Supplementary Main Estimates.
[(proc text) Question, \"That the sums stated for the Heads of Expenditure as shown on page 5 of Paper Cmd 3 of 2016 stand part of the Supplementary Main Estimates,\" put and agreed to. (proc text)]
[(proc text) Question, \"That the sum of $328,174,200 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Main Estimates of Expenditure for the financial year 1 April 2015 to 31 March 2016 contained in Paper Cmd 3 of 2016,\" put and agreed to. (proc text)]
[(proc text) Resolution to be reported. (proc text)]
[(proc text) Thereupon Mdm Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
The Minister for Finance (Mr Heng Swee Keat): Mdm Speaker, I beg to report that the Committee of Supply has come to certain resolutions.
[(proc text) First Resolution reported, (proc text)]
[(proc text) \"That the sum of $328,174,200 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Main Estimates of Expenditure for the financial year 1 April 2015 to 31 March 2016, contained in Paper Cmd 3 of 2016.\" (proc text)]
[(proc text) Second Resolution reported, (proc text)]
[(proc text) \"That the sum of $213,021,800 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Development Estimates of Expenditure for the financial year 1 April 2015 to 31 March 2016, contained in Paper Cmd 3 of 2016.\" (proc text)]
Mr Heng Swee Keat: Mdm Speaker, I beg to move, \"That Parliament doth agree with the Committee on the said resolutions.\"
[(proc text) Question put, and agreed to. (proc text)]
[(proc text) Resolutions accordingly agreed to. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Estimates for the Financial Year 1 April 2016 to 31 March 2017","subTitle":"Committee of Supply – Paper Cmd 2 of 2016","sectionType":"OS","content":"[(proc text) Order read for consideration in Committee of Supply [2nd Allotted Day]. (proc text)]
[Mdm Speaker in the Chair]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head N (Ministry of Foreign Affairs)","subTitle":null,"sectionType":"OS","content":"[(proc text) Resumption of Debate on Question [6 April 2016], (proc text)]
[(proc text) \"That the total sum to be allocated for Head N of the Estimates be reduced by $100\". – [Mr Vikram Nair]. (proc text)]
[(proc text) Question again proposed. (proc text)]
The Minister for Foreign Affairs (Dr Vivian Balakrishnan): Mdm Chairman, I thank the Members of the House for sharing their perceptive insights yesterday. I am gratified by our unity of purpose. The friends and protagonists that we have on the international stage will not be so much listening to what I have to say, but rather to the congruence of the discussions and the debates in this House. It is important that we demonstrate unity of purpose.
Foreign policy begins at home. Singaporeans must have a realistic, coherent and collective sense of our place in the world. Singapore's fundamental realities have not changed. We are a tiny island in a tough neighbourhood. At the Eighth Rajaratnam Lecture last year, Prime Minister Lee Hsien Loong said, \"We have to take the world as it is and not as we wish it to be, but we believe that we can and must defend ourselves and advance our interests\".
What this means is that we must have no illusions about our significance in the world or our ability to influence global events. Our survival as an independent sovereign city-state and our economic viability cannot be taken for granted. If we ever become disunited or unable to defend ourselves or become an economic failure, we would rapidly become irrelevant.
Since our Independence in 1965, we have assiduously forged national unity, achieved economic success and built strong partnerships at the bilateral, regional, and international levels. These partnerships and relationships safeguard Singapore's external political and economic space. But, quite frankly, the world is becoming messier. And Singapore needs to become sensitive to changes in the global environment and global economy and we must always be nimble enough to respond quickl and, hopefully, in advance of these changes.
Mr Vikram Nair and Mr Cedric Foo emphasised yesterday that we live in a region where the economic and strategic interests of major powers intersect. Indeed, as a small country, Singapore benefits when major powers focus on cooperation and constructive engagement in the region. Good relations among the major powers are essential for our continued stability and development.
The state of the United States (US)-China relationship is the key variable. This determines whether there will be peace and stability in our region. And their relationship is complex. There will always be elements of both cooperation and competition between the US and China. We hope that they will continue to cooperate effectively on the global and regional stage. We hope that they will be able to effectively work together to resolve challenges involving nuclear security, climate change, piracy and cybersecurity, just to mention a few.
But we must acknowledge that there will always be some degree of competition, if not outright rivalry, between the US and China. China's emergence as a rising power has shifted the strategic balance. And China has also become far more assertive in recent years. We see this in our region, for instance, in the South China Sea. Fortunately, for us, Singapore is not a claimant state in the South China Sea. We take no position on the merits of specific territorial claims. But as a small state, we do have a vital interest in and we have to strongly support the maintenance of a rules-based international order and to support the peaceful resolution of disputes, with full respect for legal and diplomatic processes. This is of vital importance to us; that is, the integrity of international law and international agreements, such as the UN Convention on the Law of the Sea, or UNCLOS. We must make sure that these agreements, these arrangements are not in any way undermined. As a small state, Singapore cannot accept that \"might is right\".
In the South China Sea, China has conducted extensive reclamation works, constructed runways and port facilities, and it has deployed significant military assets on disputed features in the South China Sea. Whilst, to be fair, some claimant states have also conducted similar activities, but these activities by other claimant states have not been on the same scale or pace as they are conducted by China. And what a major power does inevitably carries a far bigger signature. China, for its own reasons, has become more assertive in the East and Southeast Asian regions.
Both the US and China recognise that a stable relationship is crucial for peace and security in East Asia, for regional economic growth and development, prosperity and, indeed, global stability. Despite their differences, there is one point worth noting, which is that never before in history has a rising power, in its engagement with an existing super power, had such an unprecedented level of economic interdependence. They are intertwined. And this means that they cannot embark on an all-out confrontation because the economic impact on both states will be too high. In addition to this, of course, the threat of mutually assured destruction will also ensure both nuclear powers have a powerful incentive to avoid direct confrontation.
I also agree with Mr Cedric Foo that the dynamics of the US-China-Japan relationship are complex. These are the top three economies in the world. They are major strategic players in their own right. Stable relationships amongst the three major countries are, therefore, vital for regional peace, stability and prosperity.
The US remains the world's superpower, with major economic and strategic interests in the region, including alliances and treaty obligations with Japan, the Republic of Korea (ROK) and the Philippines, amongst others. Regardless of the outcome of the US Presidential Election, we expect the US to remain engaged in this region. Even though Sino-Japan ties are complicated by long-standing territorial disputes and historical baggage from the Second World War, both sides have an interest in mending their relations. To address complex global and regional challenges, we hope the major powers would work closely together to tackle issues of common interest and avoid direct and destabilising confrontations with one another even as they search for a new modus vivendi.
I agree with Mr Vikram Nair's assessment of the regional security challenges. The recent spate of provocative missile launches in the last few months by the Democratic People's Republic of Korea (DPRK) has been unsettling. They are in clear violation of United Nations (UN) Security Council resolutions. The international community has imposed further sanctions on DPRK.
Some Singaporeans have asked me, \"Why do we bother? Why do we watch these developments in the DPRK with such interest?\" The reason we watch developments with such concern is because tensions there will have a negative impact on the peace, stability and economy of the entire region, both in Northeast as well as Southeast Asia.
A nuclear-capable and unpredictable, unstable DPRK could also prompt countries like Japan and ROK to go nuclear and this will further raise tensions in the region. Given China's proximity and its influence over DPRK, China will have to play a key role in any resolution of this problem.
Ms Joan Pereira also asked about what we are doing to address non-traditional security threats, including religious radicalisation and extremism. We, in Singapore, are adversely affected by the conflicts in Libya, Syria and Iraq. Groups like ISIS use the Internet and social media to attract followers from all over the world, including us. More than 1,000 men and women from Malaysia, Indonesia, the Philippines and even Singapore are believed to have travelled to the Middle East to fight for ISIS.
There is even a battalion for Bahasa-speaking fighters. If you go on the Internet and search YouTube for ISIS and Bahasa, you will see slickly produced videos with beautiful Arabic scenery and music, English subtitles, spoken in Malay, Bahasa. Who else in the world are such productions targeted at? So, some of our people will go there or will intend to go there. They will gain operational and combat experience. They will learn to make bombs. They will establish networks with other militants. And we know what has happened in Europe when these militants return. And we have to worry about what will happen in Southeast Asia as these militants, our own from our region, return to our region. This, therefore, poses a direct and serious threat to Singapore and our multiracial society. It is, therefore, important that we stand up and do our part to support the international coalition against ISIS.
Ms Joan Pereira also asked about how the increase in global terrorist attacks is affecting Singaporeans abroad. Singaporeans are some of the most widely travelled people in the world and many of us also have to work or travel overseas. This often means exposing us, our people, to some risks, both to natural disasters as well as terrorism. Members of this House will recall that we all grieved when the late Ms Lo Hwei Yen became a victim of the Mumbai terror attack in 2008; a completely innocent victim.
Providing consular assistance is a top priority for the Ministry of Foreign Affairs (MFA). Wherever possible, our officers will assist Singaporeans who experience difficulties overseas, including those in conflict zones, as we did just last year in Yemen. We repeatedly urged Singaporeans to find out the facts before they travel and to exercise due care about where and how they will travel. We will continue to improve the range and quality of consular services for all Singaporeans. We will harness technology and also leverage our partnerships with our Association of Southeast Asian Nations (ASEAN) member states, both in the public and private sectors, to augment our existing network of 50 overseas missions and 31 Honorary Consuls-General.
The point is that MFA cannot be represented in all the 200 countries of the world. So, in places where we do not have a diplomatic presence, we will have to work behind the scenes with other Government agencies as well as foreign governments to render the appropriate consular assistance. Senior Minister of State Maliki will speak more on consular services later on.
Dr Teo Ho Pin also noted the global economic slowdown and asked how Singapore can increase and diversify our global economic partnerships. There are, quite frankly, many challenges ahead of us beyond this region. The US Federal Reserve has ended its monetary easing policy. Europe is still struggling to resolve its economic malaise and unemployment. The migrant crisis, the political uncertainties of the United Kingdom's (UK's) possible exit from the European Union (EU), the conflicts in the Middle East – all these conspire to affect international political and economic stability, as well as the domestic stability in many countries, including those outside the immediate theatre of operations.
Singapore's openness means, by definition, that we will be exposed to external economic headwinds. But we have no choice. We have to remain plugged into the regional and international trade groupings and arrangements because this opens doors for our people and our businesses.
One example is the Trans-Pacific Partnership (TPP). Despite the headwinds we are facing right now, if and when it is ratified, will create even more trade and business opportunities for Singapore companies by providing access to new and existing markets. The EU-Singapore Free Trade Agreement (EUSFTA) is the first free trade agreement (FTA) between an ASEAN country and the EU. If this is ratified, it will also present numerous economic benefits for both sides and will strengthen linkages. We hope the EU will ratify this agreement soon.
Mr Ong Teng Koon sought an update on ASEAN's community building and integration efforts. Dr Teo Ho Pin asked about the ASEAN Economic Community (AEC).
In a weakening global economy, the establishment of AEC at the end of last year was timely. AEC will integrate and transform ASEAN into a single regional market with a freer flow of goods, services, investments, skilled labour and capital. With 620 million people, a labour force that is the third largest in the world, and an estimated gross domestic product (GDP) of US$2.5 trillion, our AEC has huge potential. Foreign investors will come to Singapore and will use us as a launch pad, as an interface, to invest in regional opportunities. Jobs will be created. Singaporean businesses and investors will benefit from these new opportunities. I need to emphasise that we must not view ASEAN integration with a zero-sum mentality. On the contrary, integration will create win-win opportunities for all ASEAN citizens by making us collectively more competitive vis-a-vis other continental-sized economies.
As ASEAN becomes more integrated, we must join hands to tackle some transboundary challenges and to do so in a credible and coordinated fashion. For instance, on transboundary haze pollution, our Leaders have already endorsed the vision of a haze-free ASEAN by 2020. Quite frankly, as a former Minister for the Environment, I do not see why we have to wait for 2020 to see clear blue skies.
ASEAN has further established a task force to develop an ASEAN Haze-Free Roadmap and we must continue to deepen cooperation to be able to do joint investigations, collaborate with civil society and put businesses on notice that they must behave responsibly and engage in sustainable development and fair business practices.
Another emerging challenge is the need to strengthen cybersecurity and to deal with cyber threats because these threats have no boundaries. ASEAN-led platforms, such as the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS), have enabled Singapore and other ASEAN member states to work with our dialogue partners to build capacity and enhance regional cooperation in cybersecurity.
Mr Pritam Singh spoke about ASEAN-China relations and the South China Sea. Economics continues to be the centrepiece of the ASEAN-China relationship. China is already the largest trading partner for all members of ASEAN. ASEAN and China signed a protocol last year to upgrade the ASEAN-China Free Trade Agreement (ACFTA), and this will serve to further deepen ASEAN-China economic cooperation and integration. We will also celebrate the 25th Anniversary of ASEAN-China with a Commemorative Summit this year.
China is keen to play a major role in the evolving regional architecture and the global initiatives. In fact, it has proposed several regional economic initiatives, such as the Asian Infrastructure Investment Bank, and this concept of One Belt One Road. Singapore was an early supporter of both these initiatives because we saw a congruence of interests with the region's developmental needs. China's One Belt One Road initiative complements ASEAN's existing efforts to promote connectivity and regional integration and even our own latest bilateral project in China's Western Region, the Chongqing Connectivity Initiative. We welcome China's efforts in ensuring that these initiatives are open, inclusive and consultative by involving all relevant stakeholders and we will work with China to explore possible synergies.
But while ASEAN-China relations are substantive and mutually beneficial and positive, the fact remains – as Mr Pritam Singh observed yesterday – that the situation is not so tranquil in the South China Sea. We urge all parties to commit to non-militarisation, to exercise self-restraint and to refrain from the use or the threat of use of force. We all stand to lose if tensions escalate. It is thus important to maintain open dialogue on issues of mutual concern to prevent contentious issues from overshadowing the overall ASEAN-China relationship. We believe that ASEAN and China should remain committed to working towards the full and effective implementation of the Declaration on the Conduct of Parties (DOC) in the South China Sea, as well as the early conclusion of the Code of Conduct (COC).
Under DOC, we are currently working on a hotline between the ASEAN and China's foreign ministries for maritime emergencies. We also agreed to pursue the extension of the observation of the Code for Unplanned Encounters at Sea (CUES) and we hope that this will be expanded to all parties' naval vessels in the South China Sea. We believe this will help to manage the situation, prevent miscalculation on the ground by young men manning ships and planes at sea and in the air.
I have also suggested that the ASEAN-China CUES be extended to cover both navy and coast guard vessels. This will send a positive signal of our joint commitment to preventing loss of assets and lives, and ensuring peace and stability in the South China Sea.
In fact, China, the US, and eight ASEAN member states have already agreed to a CUES, under the ambit of the Western Pacific Naval Symposium in 2014, specifically for naval vessels. The US and China have also made considerable progress in agreeing on protocols for unplanned encounters both at sea and in the air, and have implemented them in practice. So, the point is: why not extend this to all ASEAN states? Why not extend it to go beyond naval vessels, but to include coast guard vessels, since we know that some of the coast guard vessels plying the South China Sea tend to be very large ships in their own right?
We have also had productive and frank discussions on COC. We have agreed to a paper on the \"List of Elements of the Possible Outline of a COC\", and to a discussion paper on the \"List of Crucial and Complex Issues\" in the drafting of COC. I apologise for all this jargon, but this is typical diplomatic foreplay – agreement not yet achieved.
On the ASEAN Defence Ministers' Meeting (ADMM) hotline, the 10 ASEAN Defence Ministers have witnessed the set-up of a hotline among the defence establishments, but this has not been expanded to include China. As earlier explained, discussions on the establishment of an ASEAN-China hotline are underway on the foreign affairs track.
As for the \"no first use of force\", a proposal raised by Vietnam sometime earlier, we have expressed support for this proposal. But quite frankly, there has been no progress since then. Nevertheless, China has signed on to the Treaty of Amity and Cooperation which commits all parties to refrain from the threat or the use of force. So, amidst all these delicate negotiations, one central challenge is to maintain ASEAN unity and preserve ASEAN's centrality in the evolving regional architecture.
I would like to reassure Mr Alex Yam that Singapore's political and defence ties with the US remain strong and substantive. Singapore will work with the next Administration, regardless of the outcome of the next Presidential Election. It is just worth reminding ourselves that we have no say, but we will have to work with whoever the Americans choose. This is the karma of a small state. The US is our largest source of foreign direct investments. It is our top trading partner in services and our third-largest trading partner in goods.
There is much that we can learn from the US. Its strength in its economy and the society, especially its cutting-edge research and innovation, as we ourselves move to focus on innovation and in our journey towards creating a sustainable Smart Nation. We welcome the US' location of one of its three centres for the US-ASEAN Connect initiative here. As I mentioned earlier, the US has enduring strategic and economic interests in Asia. The historic ASEAN-US Leaders' Summit in Sunnylands in February this year reflects the US' continued interest in this region. We will continue to support the US engagement of Asia, including encouraging the US to quickly ratify TPP. The significance of TPP goes far beyond trade. It is an important signal – an icon of the US' commitment to engage the Asia-Pacific, and we urge all Parties that have signed on this to ratify it quickly.
Ms Sun Xueling has asked about Singapore-China relations. China, indeed, is one of our key international partners. We commemorated 25 years of diplomatic relations with China last year. This culminated in the exchange of State Visits by President Tony Tan and by Chinese President Xi Jinping. We established an \"All-Round Cooperative Partnership Progressing with the Times\" – it sounds better in Mandarin – to demonstrate that our long-standing, innovative and multifaceted cooperation has kept up with the times and has evolved. Our bilateral cooperation has moved beyond the traditional areas of trade and commerce to include financial cooperation, social governance, sustainable development and food safety. Human resource development remains a key pillar of our bilateral cooperation.
During my recent visit to Beijing, I noted the good progress made on the Chongqing Connectivity Initiative (CCI). Both sides have agreed to achieve a comprehensive and substantive upgrade of the China-Singapore FTA by the end of this year. This upgrade is timely and it reflects the strength and depth of our economic cooperation. Not only is China our largest trading partner, we have also been China's top foreign investor since 2013. This is a fact that I could not believe and had to re-read several times, that little Singapore has been China's top foreign investor since 2013. My colleague, Senior Minister of State Josephine Teo, will speak more about our unique relationship with China and its domestic implications after this.
Relations with our other key partners are also growing. Mr Liang Eng Hwa asked for an update on our relations with Japan. We continue to find ways to deepen our engagement with Japan, the third largest economy in the world. To commemorate the 50th Anniversary of Singapore-Japan relations in 2016, a slate of high-level exchange of visits has been arranged. Japan remains Singapore's second largest foreign investor in 2014. We are also working with Japan to review the Japan-Singapore Economic Partnership Agreement (JSEPA) and the bilateral Air Services Agreement (ASA); and this, if we succeed, will raise our bilateral relations to new heights. We also enjoy warm people-to-people ties with Japan, best illustrated through the generous contributions by Singaporeans to the rescue and recovery effort coordinated by the Singapore Red Cross following the 2011 earthquake and tsunami in Japan.
Dr Intan Azura and Mr Vikram Nair asked about Singapore-India relations. The signing of the India-Singapore Strategic Partnership in November 2015 laid the foundation for us to step up cooperation in diverse areas, including finance, civil aviation, urban solutions and skills development. We hope to create more opportunities for our companies through new initiatives, which include the master-planning of Andhra Pradesh's new capital city and providing support for the Centre of Excellence for Tourism Training in Rajasthan.
India looks set to play an increasingly larger role in the economy and politics of our region. Under Prime Minister Narendra Modi's leadership, India has stepped up efforts to develop infrastructure and to attract foreign investments. A stronger India emerging from these successful reforms will inevitably play a more active role in our region. Prime Minister Modi's reaffirmation of India's \"Act East Policy\" allows us to further our economic cooperation with India, both on a bilateral basis as well as regionally. India is already quite involved in the ASEAN region as an ASEAN Dialogue Partner and as a member of the East Asia Summit (EAS), the ADMM-Plus and the ARF. It is also actively participating in the Regional Comprehensive Economic Partnership (RCEP), which is the other big trading bloc which we are working on. We welcome the commitment by all RCEP countries to intensify efforts to conclude the negotiations by this year. Ambitious, but worth the try.
Mr Saktiandi Supaat has asked about our ties with Australia and the Comprehensive Strategic Partnership (CSP) with Australia. In fact, right now, or over the next couple of weeks, we are in the final stages of negotiations and, if we are successful, we will see unprecedented levels of collaboration and engagement with Australia in diverse areas, including economic integration, investments in new growth areas like food and agribusiness, aquaculture, tourism, enhanced defence arrangements, further collaboration and engagement on foreign affairs, further joint-work and innovation, research and development (R&D), arts and culture, and people-to-people exchanges.
The fact is, actually, Singapore and Australia are quite complementary. We are a port, they are a continent. They have lots of land, we have no land. They have a population the size of Malaysia on a continent. We are a densely packed city in the midst of Southeast Asia. So, we are actually not in competition, but have a unique complementary role with each other and, at a strategic level, our perspectives are very well-aligned. So, watch this space in the next few weeks.
We will also continue to seek economic links and opportunities for our companies in emerging markets in Africa, Latin America, and the Middle East. Senior Minister of State Josephine Teo and Senior Minister of State Mohamad Maliki will elaborate on our engagement with these two important emerging markets.
Our international engagement with multilateral organisations is also critical. As a small state, we have to engage with everyone. We will continue to play a constructive role in the multilateral fora, including the United Nations, the World Trade Organization and the Asia Pacific Economic Cooperation (APEC). We have to maintain our international relevance. We have to support the rule of law. We have to strengthen the rules-based multilateral system. Whilst we are not a member of G20, we contributed actively when invited to participate, and, most recently, Singapore has been invited by China to attend the Hangzhou Summit this September. This will be our sixth time participating in the G20 Summit.
Closer to home, relations with our neighbours are vital for our security and national interests. These ties have to be maintained and nurtured at all levels. Assoc Prof Dr Muhammad Faishal Ibrahim asked about our relations with Malaysia and Indonesia.
During my recent visit just a few days ago to Malaysia, I caught up with many Malaysian leaders, including many old friends. My most recent trip was to Sabah. I thanked the Mount Kinabalu guides and the Malaysian authorities who provided invaluable assistance to Singaporeans who were affected by the June 2015 earthquake. The Malaysians' swift, instinctive and spontaneous response at our point of acute need reflects the close ties between our two peoples. It behoves us, as politicians, to build on the already strong ties of kinship, friendship and relationships.
The next major bilateral event will be the Leaders' Retreat in Malaysia. The Retreat will allow us to take stock of our various bilateral projects, and our economic ties remain robust. We are each other's second largest trading partners – I think that is after China – and Singapore has consistently been one of the top investors in Malaysia.
Connectivity is one key aspect that both governments are working to strengthen. Progress is being made on the Kuala Lumpur-Singapore High Speed Rail and the Johor Bahru-Singapore Rapid Transit System Link. Both governments are working to improve congestion at the Causeway and at our borders. We have conducted a joint study with the Malaysians. We have also done our own projections. The Causeway actually has sufficient capacity, replacing the Causeway is not the solution. Rather, the key is to continually enhance checkpoint efficiency and operations through measures, including the use of technology and improving the infrastructure at the checkpoints.
For example, ICA will be equipping all motorcycle clearance counters at our land checkpoints with automated facilities by the end of this year. Our efforts to expedite immigration and custom clearance must be balanced against security considerations. We have a responsibility to Singaporeans to ensure that we maintain a stringent level of checks. The Malaysian government has also had to step up its own security measures.
Singapore and Indonesia have a long and close relationship at multiple levels. My first overseas visit this year was to Indonesia, and we look forward to Indonesia hosting the next Leaders' Retreat in the second half of this year. Economic ties remain strong. Singapore is Indonesia's largest foreign investor. Is that not amazing? We are the largest investor in China, we are the largest investor in Indonesia. We have some US$5.9 billion invested in Indonesia last year, and we are Indonesia's third largest trading partner, as well as each other's largest source of tourists. Our companies remain keen on Indonesia, and besides Jakarta, Batam, Bintan and the Karimun Special Economic Zone, our companies are also looking at other regions in Central Java. For instance, SembCorp is developing a 2,700 hectare industrial park in Kendal, Semarang.
We also remain committed to working with Indonesia to address the transboundary haze, as I have mentioned earlier. Year after year, the main victims of this haze are not Singaporeans; it is actually the Indonesians themselves, who live at ground zero. So, we want to do more with the Indonesian government and other interested stakeholders to promote sustainable agricultural practices, to strengthen our response to forest fires and to hold errant companies responsible for the fires that they start or allow to occur on their concession areas. Counter-terrorism is another common challenge, and we will continue to work very closely with Indonesia as well as our other neighbours to fight this common threat.
We are always looking to do more with our other neighbours and deepen cooperation. But issues will arise from time to time. Our bilateral relations with Malaysia and Indonesia are important to us. We have a long-term stake in each other's success. So, it is important that even when issues arise, we maintain a long-term perspective and a certain equanimity in the way we relate to each other.
Another key partner is Brunei. Singapore and Brunei share a very special relationship. It dates back to the personal friendship between the late Mr Lee Kuan Yew and the late Seri Begawan. As fellow small countries and as founding ASEAN member states, we still cooperate closely. The close defence relations, so many of us have trained in the jungles of Brunei, the long-standing Currency Interchangeability Agreement. All these are icons of our strong bilateral ties.
Singapore also has excellent ties with Thailand. Our economic and people-to-people links are robust. I paid a recent visit to Thailand two weeks ago and was honoured to be granted a royal audience with Princess Maha Chakri Sirindhorn, who hosted our delegation to lunch in her own palace; met the Prime Minister and other key members of the Cabinet. Senior Minister of State Josephine Teo will speak more about engagements with other Southeast Asian countries after this.
Let me thank Mr Sitoh Yih Pin for his compliments to MFA officers. The job in MFA is highly demanding. It requires our officers to work under challenging conditions and, quite frankly, at great cost to their personal lives and their family lives. In all my 15 years in politics through many incarnations, through many Ministries, I have always found MFA officers to be dedicated, passionate and professional. What keeps them going is not their Minister but their sacred mission to advance the interests of Singapore. They understand Singapore's vulnerabilities. They also understand what we need to do to make ourselves relevant.
Foreign diplomats have always told me that they have been so impressed, not just by the superstars but by the fact that every single MFA officer in the delegation is professional, competent, carries weight, makes sense, is constructive, helpful. So, our officers are our key assets and I thank the Member for highlighting that yesterday. In fact, I want to thank Members of the House for your support because, after all, in the Budget session, you are providing resources, resources for my Ministry to recruit, nurture and deploy some of our best Singaporeans on this sacred mission.
On this note, I was gratified that MFA was recently voted by the students at our four local universities, that is, the National University of Singapore, Nanyang Technological University, Singapore Management University and Singapore Institute of Management as the \"Best Employer in Singapore for Training and Development in 2016\" in Universum's \"100 Most Attractive Employers in Singapore\" survey. I think this is a vote of confidence. I hope that also means we will continue to attract some of the best young Singaporeans because this is a mission that can only be fulfilled by Singapore Citizens.
MFA was also ranked as one of the top 10 employers among the Humanities Students in the same survey.
So, let me conclude by reminding all of us that the fundamental constraints we face as a small island city-state with a multiracial and multi-religious population remain unchanged. What have changed are the global and regional architecture and emerging powers. Whatever happens, we have to remember that we are price takers, we are not price makers. So, we have to confront the headwinds from the global economic slowdown, the uncertain geopolitical environment and the security threats. MFA and its officers will continue to help Singapore navigate through these difficult waters and pursue opportunities, so that Singapore would always remain safe, viable and relevant in an uncertain world. [Applause.]
The Second Minister for Foreign Affairs (Mrs Josephine Teo): Thank you, Mdm Chair. Earlier, when responding to Mr Ong Teng Koon and Assoc Prof Muhammad Faishal, Minister Vivian Balakrishnan spoke about the importance of ASEAN and maintaining good relations with our immediate neighbours. To address Assoc Prof Faishal's question on our relations with the other Southeast Asian countries, I will provide an update of our engagement with Cambodia, Laos, Myanmar, Vietnam and the Philippines.
Some of these countries will see a change of government this year. There has been a peaceful transfer of power following Myanmar's elections in 2015 which bodes well for its development. Laos and Vietnam concluded their party congresses in January, while the Philippines' Presidential election is due next month.
We have maintained strong ties with these countries through frequent exchanges of high-level visits. For example, last year alone, the Prime Ministers of Cambodia, Laos and Vietnam visited Singapore for our SG50 celebrations. We are ready to build on the good momentum of bilateral relations to foster closer cooperation with the new leaders and their governments.
This year, we will also officially launch the Singapore-Myanmar Vocational Training Institute as we celebrate the 50th anniversary of diplomatic relations with Myanmar. Our economic ties with Vietnam led to the establishment of the first Vietnam-Singapore Industrial Park (VSIP) in 1996. The seventh VSIP was launched last year. We expect more opportunities for economic collaboration under our Connectivity Framework Agreement with Vietnam.
Let me assure Members that with every neighbour, we will continue to seek opportunities for meaningful collaboration and enhance economic integration within ASEAN.
Moving on, I will expand on Minister Vivian's comments on our cooperation with China and address Ms Sun Xueling's question on how we can further strengthen bilateral relations.
We enjoy strong and active people-to-people links with China. About two million Chinese tourists visit Singapore each year and close to a million Singaporeans visited China in 2015.
Our economic ties remain strong. China is Singapore's largest trading partner and we have been China's top foreign investor since 2013, a point which Minister Vivian highlighted. At whatever speed its economy grows and however far-reaching its reforms extend, China will remain a key economic driver in the region. Our businessmen recognise this and have been in China for years. Singapore also supports China's One Belt One Road initiative and hopes to see businesses collaborate to capture new opportunities in the region. For example, last week, I witnessed the signing of an investment agreement between PSA Singapore and COSCO Pacific that will deepen their cooperation and improve their strategic positioning.
As many of our companies know, there remains untapped developmental potential in the inland provinces. It is, therefore, important that we build good relations not only with the central government, but also with provincial authorities. This also explains why MFA has four Consulates General in China, besides our Embassy in Beijing, which is more than in any other country.
It takes time and effort, through regular exchanges and visits, to establish strong ties with the provinces and municipalities. For example, I will make a working visit to the provincial capitals of Yunnan (云南省) and Guizhou (贵州省) shortly after the Committee of Supply debate. To ensure continuity in our relationship-building, we recently updated our representation in the provincial business councils to involve younger political officeholders in Singapore.
The scope of our cooperation with China continues to deepen and broaden. Following the success of the Suzhou Industrial Park (SIP) and the Sino-Singapore Tianjin Eco-City (SSTEC) projects, the Chinese approached Singapore to launch a third Government-to-Government project in Western China.
This third G-to-G project, known as the Chongqing Connectivity Initiative (CCI), is based on the theme of \"modern connectivity and modern services\". It was launched by Prime Minister Lee and President Xi Jinping during President Xi's State Visit to Singapore last year. We are optimistic that, like SIP and SSTEC, CCI will play a pathfinder role in China's development. Mdm Chair, in Mandarin, please.
(In Mandarin): [Please refer to Vernacular Speech.] Mdm Chair, another unique feature of our substantive relationship is the establishment of bilateral mechanisms to institutionalise high-level interactions between our leaders and to exchange ideas on issues of common interests. We have three such bilateral platforms, co-chaired at the Deputy Prime Minister (DPM)-level, namely the Joint Council for Bilateral Cooperation (JCBC), Singapore-China Forum on Leadership, and Singapore-China Social Governance Forum. While JCBC has been held since 2004 and the Forum on Leadership since 2009, the Social Governance Forum is a relatively new platform launched in 2012.
It is rather unusual for two countries, particularly one that is a 5,000-year-old civilisation of 1.4 billion people and the other a small city-state that gained Independence just 50 years ago, to find value in sharing experiences on social governance challenges. Much of what we do in Singapore can only be practised in China with adaptation. But the successful implementation of our social management policies in a multiracial society with a Chinese majority provide references that our Chinese friends find useful. If we cannot make our system work in Singapore, they will be much less interested in us.
When Chinese Singaporeans interact with their friends in China, there is, undoubtedly, a sense of cultural affinity. We speak the same language and often celebrate common festivals, so much so that we could be mistaken as Chinese nationals outside China, also known as 华侨. However, we are, in fact, 华裔 or ethnic Chinese outside China with independent citizenship, loyalty and identity. China's programme of active engagement of its 华侨 may extend to cover local Chinese communities 华裔, including those in Singapore. But we must always remember that there are many Chinese in the world, including 华侨. A few undistinguished millions in a small island in Southeast Asia cannot be more than a curiosity. Ultimately, to be of special value, Singaporeans, as a community, must be outstanding, confident and cohesive. Having joined hands with other races and successfully built up modern Singapore over the last 50 years, the Chinese community in Singapore can engage our Chinese friends with a sense of confidence, as well as demonstrate our uniqueness and independence as a nation.
More so than ethnic Chinese elsewhere, the experiences and outlook of Chinese Singaporeans are rooted in a multicultural society where each community enjoys our common space and interacts respectfully with one another. Compared to China, we have a unique cultural make-up that is diverse and yet inclusive and which we are tremendously proud of. When travelling abroad, Singaporeans have no difficulty identifying one another from among a sea of ethnic look-alikes – our Singlish, infused with all sorts of local references, is an endearing and immediate giveaway. Chinese Singaporeans living overseas whom I have encountered as part of my National Population and Talent Division (NPTD) role, want to be identified and introduced as Singaporeans first and foremost, even after being away from Singapore for years.
This unique combination, where cultural similarity and difference with Chinese nationals co-exist, makes the Chinese Singaporean community interesting and relevant. We have much to learn from China on culture, language and so on, but we must maintain a sense of dignity and pride in our cultural destiny. Our value lies in our independent viewpoint and unbiased voice. It creates valuable opportunities for us to share perspectives with our Chinese friends that they are unlikely to find elsewhere. Even our businesses can leverage our ability to build bridges across cultures. We should continue to nurture this unique combination, strengthening links within our own local communities at the same time as we deepen engagement with China.
(In English): Mdm Chair, let me move on to our relationships with Japan and ROK. Mr Liang Eng Hwa has asked about Singapore's relations with both. Let me add to what Minister Vivian had said earlier. Singapore and Japan enjoy frequent high-level political exchanges. Over the last three years, Prime Minister Lee and Japan's Prime Minister Shinzo Abe have met several times annually. They had another good meeting in Washington during the Nuclear Security Summit (NSS) last week.
The Japanese Cabinet has decided to confer a posthumous award, the Grand Cordon of the Order of the Paulownia Flowers, on Mr Lee Kuan Yew. This would be the first time the award has been given posthumously to a foreign individual.
Mr Lee had received the Grand Cordon of the Order of the Rising Sun, one of Japan's most prestigious decorations, when he visited Japan in 1967. The Grand Cordon of the Order of the Paulownia Flowers is one level up from the Order of the Rising Sun. Since the award was elevated to a class of its own in 2003, only four foreign personalities have received it. We are deeply honoured and appreciate the Japanese government's decision, which recognises Mr Lee's contributions to Singapore-Japan relations.
ROK is another important partner. We commemorated the 40th anniversary of diplomatic relations last year. Mr Liang Eng Hwa will be pleased to know that besides strong economic ties, we also cooperate on a variety of regional and international issues.
Singapore companies have growing investment interests in ROK, especially in sectors like real estate, transport and logistics, and infocommunications technology. Many ROK companies in Singapore are engaged in international trading, transport and logistics, electronics, construction and engineering. As our business ties and people-to-people exchanges continue to grow, we hope to enhance relations through a meaningful review of the Korea-Singapore FTA and the bilateral Air Services Agreement.
Ms Low Yen Ling asked about our relations with the European countries. Our ties with Europe are anchored by strong trade and investment links and regular high-level exchanges. The EU is Singapore's third largest trading partner and the largest investor in Singapore, with around 11,000 companies registered here. This will not change in the short term.
Even as Europe grapples with its challenges, we look forward to strengthening our economic relations through the EU-Singapore FTA. We are also keen on an EU-ASEAN Comprehensive Air Transport Agreement, which will enhance air connectivity between the two regions.
Beyond economic cooperation, Singapore continues to tap the experience of several European countries. Germany, for example, offers many useful lessons. As part of the SkillsFuture initiative, we are keen to learn from Germany's best practices in vocational training. This February, I led a working visit to Berlin to learn from their experience in supporting parenthood. Our engagement with Germany will deepen through such channels.
We will also continue to work with other European partners on issues of mutual interest. Of special note is our participation in the Arctic Council. Our three years as an Arctic Council observer has allowed us to monitor developments in the Arctic that may impact Singapore, for example, our maritime interests. It has also provided an additional platform to collaborate with the Nordic countries. I would like to especially record our thanks to Minister of State Sam Tan for continuing to lead our engagement on this front.
To address Dr Teo Ho Pin's question on emerging markets, let me assure members that MFA will continue to nurture our ties with the emerging markets and seek out opportunities to expand Singapore's economic space. In 2010, total trade between Singapore and emerging markets, excluding China and Southeast Asia, stood at about S$130 billion. By 2014, this trade had grown to more than S$160 billion. As part of our plans to build ties, we have concluded a number of FTAs, including with Panama, Peru and Costa Rica. We are continually on the lookout for opportunities to expand our network of FTAs and engage promising new markets.
For example, Deputy Prime Minister Tharman and Russian First Deputy Prime Minister Igor Shuvalov agreed last year to review the Trade Agreement signed between Singapore and the former Union of Soviet Socialist Republics (USSR) in 1966. This will take the form of a new FTA between Singapore and the Eurasian Economic Union (EAEU), which comprises Armenia, Belarus, Kazakhstan, the Kyrgyz Republic and Russia. With a population of 180 million, these countries present good opportunities for trade.
In November 2015, we signed the Turkey-Singapore FTA (TRSFTA), a significant milestone for both countries. The TRSFTA will better position Singapore as a gateway to ASEAN for Turkish goods and services, and vice versa.
We are also stepping up engagement with other countries in South Asia besides India. In particular, we are exploring economic opportunities with Sri Lanka and Bangladesh. Our companies have made inroads in both recently, winning contracts for power plant projects in Bangladesh and master planning in Sri Lanka.
Latin America is another area with strong growth potential. If ratified, the TPP is expected to boost trade between Singapore and the Latin American TPP members Chile, Mexico and Peru.
High-level exchanges between both sides will maintain the momentum of our engagement. Singapore will host the State Visit by President of the Republic of Panama Juan Carlos Varela later this month. President Tony Tan will also be making a State Visit to Mexico in June 2016, the first by a Singapore Head of State to Latin America.
Mdm Chair, MFA will continue to deepen and broaden our engagement with other countries. I will turn the microphone over to Senior Minister of State Dr Maliki now.
The Senior Minister of State for Foreign Affairs (Dr Mohamad Maliki Bin Osman): Mdm Chair, allow me to respond to the remaining issues raised by Members.
Assoc Prof Fatimah Lateef asked about the situation in the Middle East, the Israeli-Palestinian conflict and our plans for engagement of the region. Mr Cedric Foo also asked about the implications of developments in the Middle East amid a sustained low oil price environment. The interests of the US and other major powers in the Middle East go beyond low oil prices. They will continue to be interested in the Middle East given the volatile security situation, terrorism and the various conflicts in the region, including the Israeli-Palestinian conflict. And the current conflicts in the Middle East are likely to persist. The situation in Yemen, Libya, Syria and Iraq remains of deep concern, given the humanitarian toll and the threat posed by terrorist groups like ISIS. We welcome UN-mediated efforts to seek a political solution to the conflicts, but the process will not be easy, given the geopolitical complexities. The leadership role of the US and other major powers will be critical in pushing the negotiating process forward.
Singapore welcomes the latest French initiative to convene an international conference to seek a political solution to the stalled Israeli-Palestinian conflict. The Israeli-Palestinian conflict is long-standing and resonates with many in Southeast Asia, including Singaporeans. We share in the hope that a comprehensive and just agreement can be reached to achieve the two-state solution whereby Israel and Palestine can live side-by-side in peace and security.
Singapore's position on this has been consistent. We support the rights of the Palestinian people to a homeland. We have also voted for several Palestinian-related resolutions at the UN General Assembly. A number of Singapore leaders have visited Ramallah. We want to help the Palestinians where we can, to rebuild their lives and develop their economy. Over the last 20 years, we have trained over 230 Palestinian officials in various courses under the Singapore Cooperation Programme. Further, since 2013, Singapore has also offered a special technical assistance package valued at S$5 million to support Palestinian capacity building. Under this package, we have hosted customised study visits in areas like education, anti-corruption and economic development. We are happy to do more within our means to share Singapore's experience and enhance the capacity of the Palestinians.
As a friend to Israel and Palestine, we urge both sides to engage in direct negotiations and to refrain from taking any unilateral actions to change the status quo, including through acts of violence.
We should be careful not to view the entire region through the same lens, though. Singapore will continue to seek economic opportunities in emerging markets, including the Gulf Cooperation Council (GCC) countries. Our FTA with the GCC will help further economic cooperation with its six members. I have visited almost all of the GCC countries since last November.
While lower oil prices have impacted the budgets of the GCC countries, there is admiration for the Singapore model of development and they remain keen to engage us and expand cooperation. In fact, our experience in diversifying our economy has taken on greater relevance to the GCC.
We should also not neglect the other countries outside of the GCC. There are potential opportunities in Iran following the implementation of the Joint Comprehensive Plan of Action. Our relations with Iran remain friendly. The Iranian Foreign Minister recently visited Singapore as part of a regional tour. We look forward to maintaining our political engagement in the months ahead.
Another promising market is Egypt. I joined Deputy Prime Minister Teo on his recent visit to Egypt to commemorate the 50th anniversary of our relations. The Chairman of the Suez Canal Economic Zone Authority briefed us about its development plans. Singapore will continue to explore opportunities for economic cooperation with Egypt and share our experience in development where relevant.
Singapore and the Middle East countries also share a common interest in combating religious extremism. Ms Joan Pereira had asked how Singapore is working with other countries to counter the spread of violent extremism. During my recent visits to the Middle East, religious scholars shared their concerns about extremism and the need to counter the threat of radicalisation. They categorically reject violence in the name of Islam.
I invited them to visit Singapore to share their experiences, so that we can learn from one another how to deal with this threat. Similarly, our students pursuing Islamic education in the Middle East also play an important role as they return and apply what they had learnt to Singapore's context as a multiracial and multi-religious society.
Singaporeans have always displayed tolerance for all religions and should continue to do so. But given the geopolitical complexities in the Middle East, there is a risk of Singaporeans, especially our Muslim community, being drawn into the narrative of sectarian strife. Some of the causes of these conflicts are historical and long-standing, while some are driven by current regional political rivalries. We should be careful not to be drawn into these conflicts that are exploiting religion for political ends.
Allow me to briefly return to Dr Teo Ho Pin's question on emerging markets. I will speak about Africa. There is a growing interest in Sub-Saharan Africa as a market for Singapore companies looking to expand overseas. In the last decade, trade between Singapore and Africa has grown by an average of 10% annually, with total investments in Sub-Saharan Africa exceeding S$21.1 billion in 2014.
Good relations with the respective governments can help open doors for our companies. This August, MFA will host the Second Sub-Saharan Africa High-Level Ministerial Exchange Visit that aims to foster closer political partnerships with key African leaders. The Fourth Africa-Singapore Business Forum will build on past editions that had attracted about 2,000 participants from Africa and the region to explore business opportunities and establish networks. Such efforts have helped our businesses expand into new markets like Kenya, Rwanda, Tanzania and Ghana in sectors, such as logistics, agri-business and real estate.
Mr Amrin Amin asked how Singapore can play its part as a responsible member of the international community. Asst Prof Mahdev Mohan also asked for details on our support for sustainable development and how this might enhance Singapore's standing internationally. As a small nation, Singapore has to be active in international fora to create space to advance our strategic interests. We do so by sharing our development experience and ideas, and this enhances our standing as a responsible and constructive member of the international community.
We have been working closely with our partners and UN agencies, learning from the experience of others and sharing with them what we do. Agencies like the World Health Organization and International Labour Organization, study our new policies like MediShield Life and SkillsFuture with interest, because we are tackling urgent questions like how to provide universal health coverage and the future of work in an outcome-focused way.
We have consistently been active at the UN as Chairman of the Forum of Small States since its inception in 1992 and convenor of the Global Governance Group.
Let me now talk about the Singapore Technical Cooperation Programme. During our early years, Singapore benefited from the assistance of others. We have consolidated our developmental experience and, in turn, launched the Singapore Cooperation Programme (SCP) in 1992 as a means to give back to the international community.
Over the years, the SCP has built us a strong network of friends and a strong international brand name as a constructive partner. Notably, the SCP reached a milestone with our 100,000th participant in July last year. To date, more than 170 developing countries have participated in the SCP.
Singapore remains committed to enhancing the human resource capabilities of our ASEAN neighbours, especially the newer ASEAN members. The majority of SCP alumni, over 65,000-strong, are from ASEAN. Our four Training Centres in Cambodia, Laos, Myanmar and Vietnam continue to deliver over 100 courses a year under the Initiative for ASEAN Integration.
To Asst Prof Mohan's query, almost 11,000 foreign officials have learnt from our sustainable development journey through the SCP. Sustainable development will increasingly take centre-stage in international development, following the Paris Agreement on Climate Change and the UN 2030 Agenda for Sustainable Development last year.
Through the SCP, Singapore is doing our part in rolling out Sustainable Development and Climate Change programmes to include courses on energy efficiency, environmental management, disaster risk reduction, and climate change adaptation strategies. At the same time, the SCP is also working with the Centre for Liveable Cities to roll out a leadership programme in urban development. We will deepen these capacity building efforts in partner countries by responding to their new training requests arising from implementation of the Paris Agreement on Climate Change.
I agree with Asst Prof Mohan that the present global emphasis on sustainable development and clean energy presents opportunities for Singapore businesses. This is a broader area which our economic agencies are developing with the necessary coordination among the other relevant agencies. Through SCP, we are also exploring public-private partnerships to offer more sustainable development tools through Singapore businesses, non-government organisations and volunteer organisations, such as the Singapore International Foundation (SIF) to complement the Government's development toolkit. Our youths can continue to play a role through these and other organisations.
We are also partnering the Singapore-based United Nations Development Programme (UNDP) Global Centre for Public Service Excellence to conduct leadership programmes on sustainable development and good governance, under the new Sustainable Development Programme launched by Minister Vivian last September in support of the UN's 2030 Agenda.
Mdm Chair, everything we do in the international arena boils down to our recognition that we need to be a useful and relevant player to others. While we may not have deep pockets to provide assistance through cash grants or soft loans, we believe that the best way to help others is through developing human resource and sharing from our own developmental journey.
Mdm Chair, one of MFA's core responsibilities is to assist our nationals in distress situations away from home. In this regard, allow me to address Ms Low Yen Ling's question about consular support for Singaporeans overseas.
The safety of Singaporeans abroad is of paramount importance to MFA. Last year, MFA promptly deployed several Crisis Response Teams (CRTs) to assist the return of Singaporeans from places like Nepal, Sabah and Yemen, which were rocked by earthquakes and civil unrest. For example, our MFA officers worked tirelessly under challenging circumstances to contact over 100 Singaporeans who had registered with us following the 7.8 magnitude earthquake in Nepal last April. On the ground, the MFA CRT had to quickly establish a registration point at the airport to facilitate Singaporeans' return home. The task was made more challenging by aftershocks which disrupted telecommunications lines and Internet connection. CRT worked closely with our Embassy in New Delhi, the Ministry of Defence (MINDEF) and the SilkAir office in Kathmandu to secure landing slots for our Republic of Singapore Air Force C-130 aircrafts at the chaotic and congested airport and runway. Although we have no Singapore Mission in Nepal, we persisted with a whole-of-Government spirit and worked with the Nepalese government to bring home 70 Singaporeans and seven Permanent Residents safely.
To maintain a high level of readiness, MFA regularly conducts simulation and training exercises and reviews of our contingency plans. We and our Overseas Missions have rostered officers 24 hours a day so that Singaporeans in need of urgent help can get in touch with MFA.
While MFA is committed to do its utmost for our fellow citizens, Singaporeans should also play their part by staying in close contact with their next-of-kin and close friends, taking necessary precautions for their personal safety and planning properly for their travels. They should, for instance, purchase comprehensive travel and medical insurance, as our experience shows that emergency medical bills incurred overseas can be very costly.
I urge Singaporeans to e-register with MFA each time they travel overseas. This would allow us to contact them quickly in a crisis, like we did during the Brussels bombings last month. Some Singaporeans perceive that e-registering their whereabouts is a means for the Government to track their movements. This misperception must be corrected. It is in their interest that they e-register so that we can help them should they face any emergency situation abroad.
During the Paris terror attacks last November, our officers worked day and night to contact our e-registrants. We did not stop until every 263 registered Singaporeans were accounted for. This included an e-registrant who did not subscribe to auto-roaming services and required MFA to leverage social media, such as Facebook and Twitter, to contact him and ascertain his safety.
Against the backdrop of an uncertain global security climate and increased frequency of natural and man-made disasters, MFA's challenge is to meet Singaporeans' growing demand for prompt and effective consular services. We cannot, however, accede to unreasonable requests, especially those that divert our attention or limited resources away from more urgent cases. Singaporeans must also respect and observe local laws as MFA is not in a position to intervene in the legal or judicial process of another country.
Many of the consular cases are admittedly complex and difficult to handle. But I am glad to say that MFA officers have often risen to the challenge and this is occasionally recognised by the Singaporeans whom they have helped.
Mdm Chair, MFA will remain steadfast in advancing our national interests amidst an increasingly complex global environment. We will endeavour to work with our ASEAN neighbours and other key partners to promote peace, security and progress for Singapore and Singaporeans.
The Chairman:\tWe have a little bit of time for clarifications. Mr Kok.
Mr Kok Heng Leun (Nominated Member): Madam, I would like to ask this question, in Mandarin, if possible.
(In Mandarin): [Please refer to Vernacular Speech.] I am grateful that a newbie like me get to hear the complex tasks of MFA. I have a question.
International relations are getting more and more complex. There are many conflicts of interests. Has MFA considered using cultural exchange as a buffer zone? In negotiation, cultural exchanges could, in fact, improve diplomatic relations. If it is, indeed, a strategy, has MFA considered setting up the post of cultural attache in every Singapore embassy and consulate? Because I find that cultural exchanges often require a cultural attache to promote this kind of activities.
Mrs Josephine Teo: Mdm Chair, the conduct of diplomacy is done through every means and channel that is available to us. Besides cultural diplomacy, in the past we have heard of \"ping pong\" diplomacy, golf diplomacy; every channel that is available to us to make friends, to extend our influence, we will engage in them.
One of the most significant ways in which we extend our diplomacy is economic cooperation. Hence, you will find that a lot of our attention and efforts are focused on those areas. So, the work of the Foreign Service Officer is not only to look at political developments but also to look at economic developments that could help to expand Singapore's economic space, to share these developments with our home base, and then to provide ideas on how we can take advantage of the opportunities that are presented. We do not require every one of our Foreign Service Officers and our diplomats to be economists or to have been engaged in business before.
We also, for example, link up with other countries and deepen our engagement with them through channels like exchanging understanding and extending our cooperation in science and technology and R&D. So, our Foreign Service Officers have to be a jack of all trades. They have to be good in everything, and that includes cultural diplomacy. They will have to invest time to pick up the relevant skills, to understand the context of both countries and then, when opportunities arise, to try and extend our international space in this manner.
The way in which we go about it is to be adaptive and to be cognisant of the unique circumstances in every country and region that we establish diplomatic relations with. There are no plans currently for specifically appointing cultural liaison officers. Where the need arises, we will examine whether there are opportunities for us to grow the capabilities of our Foreign Service Officers so that they can take on these multiple hats.
The Chairman: Mr Vikram Nair.
Mr Vikram Nair (Sembawang): Mdm Chair, one of the exciting developments this year was the start of the AEC. What I am interested to know is whether there is any plan to build some institutions around this, for example, a regulatory institution, and maybe a dispute resolution mechanism, because as there are more and more transactions, there are likely to be more and more issues that will crop up, not all of which will require government-to-government interactions. So, maybe it is good to build some institutions that can handle the small issues that crop up. Europe, for example, has the European Court of Justice, European Commission, European Parliament. I do not think we need all of that, but the minimum is some kind of dispute resolution and regulatory mechanism.
Dr Vivian Balakrishnan:\t I thank Mr Vikram Nair for his suggestions. Certainly, as the pace and scope of integration proceeds, there will be need for more institutional arrangements. I just want to caution that ASEAN works by consensus, so, we would have to make sure that everyone agrees. But, generally, the point that the Member is making is a valid one and we will work towards that.
The Chairman:\tMr Cedric Foo.
Mr Cedric Foo Chee Keng (Pioneer): Mdm Chair, today's oil price based on the West Texas Intermediate (WTI) is about US$38 per metric tonne (MT). Many of the Middle Eastern countries would require something like US$80-plus, say, for Iran or Iraq to come out break even for their national budget. For Algeria, US$90-plus, for Saudi Arabia US$105. The Middle East may seem very far away from us, but if events there cause them to destabilise, or if the major powers of the world take their attention off the Middle East, I think it will be very bad for Singapore. So, I would like MFA's take on how low oil prices, if sustained, would affect the Middle East and, therefore, impact us.
Dr Vivian Balakrishnan: I thank Mr Cedric Foo for asking actually a very profound question that will require a full lecture to fully address. Let me try to encapsulate the key ideas. I will start with a story. I asked the Saudi Arabian Foreign Minister and the Saudi Arabian Minister for Energy. I asked him, \"What is the cost of getting a barrel of oil from Saudi Arabia?\" He said, \"Well, the true cost, the real cost to us, depending on whose accounting standard is used, is somewhere between US$2-US$5 per barrel.\" That is the cost of lifting oil out from Saudi Arabia, which means everything else is plus, plus.
What the member is referring to, however, is the fact that, for many years, oil producers have made certain budgetary assumptions about the revenue that they will derive from oil. What has happened, in the more recent times, with the dramatic fall in oil prices, is that except in the case of the Singapore Budget, in many other countries, especially countries which depend on the prices of natural resources, they have suddenly found themselves in a big deficit situation.
The first point we should make is that, fortunately for us, we are not dependent on natural resources. Secondly, we have got a good Finance Minister and we do not make these kinds of budgetary assumptions that lead us into a sudden deep hole. There are certain salutary lessons for us at the domestic level.
At an international level, the Member is absolutely right. Many countries, especially oil producers in the Middle East, and including some in our own region, now have to come to terms with a very significant budgetary squeeze. This affects them in multiple ways. They will have to cut back on services, on benefits to their people. They will also have to trim some of their budgets on other more esoteric adventures which they have intended to pursue. I do not want to get into details.
But I think the more fundamental question the Member is asking is, \"What does this portend for stability in the Middle East?\" Even the answer to that question is not so straightforward. On one level, you could say, \"Well, there should be less liquidity to expend on an arms race.\" But on another level, we know that when the countries get into troubles, there is always a political temptation to draw attention to tensions elsewhere to distract your own people.
A third level of looking at this is and I think, the Member made the point yesterday – as oil prices fall and, indeed, as sustainable sources of energy emerge and even as the US itself has become de facto energy independent, does that mean the US would pay less attention to the situation in the Middle East? The answer is that, the energy and fiscal imperatives may become less but do not underestimate the political complexities of the Middle East and its propensity to entangle outside powers to its politics.
And I want to, again, emphasise the point that Senior Minister of State Dr Maliki made just now. The conflicts in the Middle East have their roots going back thousands of years. They are ethnic and pseudo-religious, sectarian conflicts, superimposed with regional rivalry. It is important that Singaporeans do not get caught up in these conflicts which, really, have nothing to do with us and, really, in fact, have nothing to do with religion. Religion is just being abused as a vehicle to further political ends.
The final point that I will make about oil crises is to also bear in mind the fact that what can come down very quickly can also rise very quickly, the moment you get any supply disruptions. The domestic implication of that for Singapore is the following: (a) we have never subsidised energy and we should not do so; (b) whether it comes to utilities, transport and all those other things, we must always be prepared to pay the full international price, whether it is high or low; (c) we must make sure our economy continues to be built on sustainable, sensible, rational economic principles; and (d) when we have debates on Budgets like this, examine people's assumptions and make sure that the Singapore Government never gets into situations when we make rosy projections which then suddenly run out of steam and, literally, regulatory and legislative panic breaks out. Those are the more important lessons for us from a domestic perspective.
Mr Zaqy Mohamad (Chua Chu Kang): Mdm Chair, the question for the Minister: with the Monetary Authority of Singapore (MAS) looking into some of the investigations into 1Malaysia Development Berhad (1MDB) and other transactions here as well as the recent Panama Papers exposé case, has that impacted our relationship with Malaysia and other foreign counter-parties? And has that impacted some of our diplomatic agreements with them, such as the high speed rail and so forth?
Dr Vivian Balakrishnan: That is a very sensitive question which I am not going to be able to give the Member a detailed answer to. Let me get this House to take a step back to understand that Singapore is a financial centre. It is in our long-term strategic interests to be above board, to be kosher, to have the rule of law and integrity being the hallmarks of our system.
Regardless of who and where and what those transactions are, I would expect MAS and the Ministry of Finance – unfortunately, they are not here to answer that – but I would expect that they would pursue and investigate and take all the necessary actions in order to maintain the integrity and the reputation of our financial centre. That is our paramount objective. Everything else becomes secondary.
Once people understand and know that we are consistent, we are governed by rules, the rule of law and that we will be fair, all this is what makes us relevant internationally, that we are trustworthy, reliable, honest people who are dependable. That is our key imperative. I will not be able to get into details.
The Chairman: Mr Vikram Nair, do you wish to withdraw your amendment?
Mr Vikram Nair:Mdm Chair, I would like to thank Members for their contributions and also the Minister and Senior Ministers of State for their responses. I also record my thanks to MFA. Not only is Singapore a small country, I think the MFA also has a relatively small budget. Yet, despite that, it has punched well above its weight on the international stage, all the way from the Asia Pacific to the Arctic Circle. I also understand that we are the largest investors for China, Indonesia and, I believe, second largest for India, the three most populous countries in the world. And I think it is quite extraordinary that Singapore has managed to achieve all this, given its size and scale.
I am also heartened to note that even though the Minister has changed portfolios, he still takes a keen interest in the haze problem and will bring blue skies to Singapore, hopefully, in the next few years. With that, Madam, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $446,826,500 for Head N ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $76,000,000 for Head N ordered to stand part of the Development Estimates. (proc text)]
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In 1971, when the British armed forces withdrew from Singapore, that marked the end of some 150 years during which the British oversaw Singapore's defence.
Quite suddenly, for the first time in history, Singapore was left to take care of its own defence. There were many challenges at the time. We had barely been independent for six years and were still finding our feet as a nation. The withdrawal of the British forces also had serious economic implications. Asia, like the rest of the world, was divided by the Cold War conflicts and tensions with wars raging in Vietnam and Korea. Closer to the neighbourhood, Konfrontasi was still fresh in our memories, as were the communist and communalist riots on the domestic front.
The challenge for a small country is that should it be subject to aggression by a larger country, it will still need to be able to hold its own. Thus, Singapore has always had to build up its armed forces in anticipation of having to defend itself against potentially larger aggressors. We tried to overcome the glaring disadvantage of size by starting National Service and investing in better technology.
The Singapore Armed Forces (SAF) is now one of the most respected armed forces in the region. Our military leaders perform well in international assignments and our armed forces have made a good name for themselves assisting countries in disaster relief and humanitarian efforts.
However, the purpose of the SAF remains primarily to address security threats and I will highlight a few that remain a concern.
The first, terrorism. The spread of terror continues to be ever present in the region. We understand that Southeast Asia is a key recruitment area for the Islamic State of Iraq and Syria (ISIS) which has established Katibah Nusantara in the region – their fighting force which was responsible for the 2016 Jakarta attacks. The terrorist attacks in Brussels and Paris are grim reminders of what terrorists are capable of.
Second, South China Sea. The South China Sea tensions continue to escalate despite the fact that the legal dispute resolution process is moving forward – indeed, maybe, it is escalating in response to this process. The latest actions see China reclaiming land, building up defence installations and lighthouses in the region, with the US and Australia continuing to assert their freedom of navigation. The Philippines and Vietnam, meanwhile, maintain their claims through the legal process.
Even more worrying is the Korean Peninsula, where North Korea continues its nuclear testing and, perhaps, for one of the first times I can remember in history, making specific threats to launch a nuclear strike. This may change the face of warfare if that were to materialise.
Closer to home, the Straits of Malacca continues to have stories of piracy. In June last year, eight men armed with pistols and machetes hijacked the Orkim Harmony, an oil tanker carrying some 6,000 tonnes of petrol worth more than $5 million, and tried to sail the ship to a friendly harbour where they could siphon off the liquid cargo. Their plan was foiled when they were spotted by security forces, but they managed to slip away in a lifeboat.
Mdm Chair, some of these conflicts may seem far away, some seem much closer to home but I believe all of them are important considerations for us. As a small, interconnected country, Singapore is likely to be affected by these threats. I will be interested to know what the Ministry of Defence's (MINDEF's) views are, both in relation to the threats I have described as well as what they believe to be the most salient national security challenges Singapore faces today?
Mr Zaqy Mohamad (Chua Chu Kang): Mdm Chair, the nature of warfare today has changed. Threats today come from states, organisations and individuals that seek to undermine our security. The threat of hybrid warfare is also emerging, as we have learnt from the experience of Crimea, where there was a concerted effort to undermine the nation's defences through economic, socio-psychological as well as cyber warfare before taking them on militarily.
Last year, Minister Ng Eng Hen spoke extensively on hybrid warfare and he described hybrid warfare as the exact antagonist of Total Defence. Hybrid warfare integrates conventional and unconventional tools of warfare by both state and non-state actors. It is precisely because of the tools of coercion and aggression that these are wide-ranging, and their being wide-ranging means it may be difficult for nations, such as Singapore, to even identify the source of attacks.
Furthermore, our world today is increasingly interconnected. While traditional battlefields of the past were largely confined to air, land and sea domains, modern conflicts have moved into other domains that extend beyond territorial and geographical boundaries. So, what are some of these trends that MINDEF has observed and are we facing such threats in Singapore? Has Singapore been tested by such threats in recent months? What are some of these threats?
It is clear that the military solution is not sufficient to address the threat of hybrid warfare. So, how is the Government responding to the threat of warfare on the various fronts and how do we bring in the stakeholders in Total Defence on board? We were quite good in having thought through Total Defence for many years, but given how things have evolved since its inception many years ago, how do we take it to the next level?
Ms Low Yen Ling (Chua Chu Kang): Mdm Chair, in the past few months, no region has been spared from attacks by terrorists. We have all followed the news reports of recent attacks in Lahore, Brussels, Istanbul. But those attacks represent just a fraction of the total number that has been carried out in recent months.
In fact, in its annual global terrorism index report released at the end of last year, the Institute for Economics and Peace assessed that terrorism is at an all-time high, with more attacks in a wider range of countries than ever before. This index shows that there are nine times more people killed today in terror attacks than in the year 2000.
Regarding ISIS in particular, some analysts have observed that there has been a shift in the group's strategy. A recent Financial Times' article noted that beyond creating a caliphate in Iraq and Syria, ISIS is looking to strengthen its caliphate further afield and export terror to its perceived enemies beyond the Middle East. The recent attack in Jakarta and news reports of ISIS targeting locations in Kuala Lumpur have shown us that ISIS' global strategy includes hitting us, in our very own backyard here in Southeast Asia.
Many continue to travel to Iraq to Syria to fight for the ISIS cause in the Middle East. Most alarmingly, however, analysts have also pointed out that ISIS' tactics are also shifting. ISIS has been encouraging its supporters, some of whom had never travelled to the Middle East, to conduct attacks in their home cities. Without specific operational direction, lone wolves and small wolf packs have been inspired into action by ISIS' general call. Some have obtained weapons or explosives capable of causing mass casualties. This is clearly an alarming trend for Singapore.
In the wake of the recent series of attacks in various cities, militaries have stepped up, alongside law enforcement agencies, to respond to the heightened risk. Military patrols have also been deployed in countries, such as France, Belgium and Malaysia. So, my question is: what are MINDEF's and the SAF's roles in preventing and responding to terrorist attacks?
The Chairman: Mr Vikram Nair, you have two cuts. Please take them together.
Mr Vikram Nair: First, on homeland security. Traditionally, SAF has focused its preparations on external threats while the Home Team has focused on homeland security matters. Thus far, the Home Team has done an excellent job in keeping Singapore safe and has anticipated and foiled a number of potential terrorist threats by identifying and arresting key people in time.
However, in the event of a major terror attack, say along the lines of Mumbai or Paris, which we hope will never happen in Singapore, but where the attack is large scale and the perpetrators are armed with firearms and bombs and hundreds are killed or injured, it may be necessary for the military to step in both to engage and eliminate the perpetrators as well as to restore public confidence.
I believe the military's role in homeland defence should be carefully calibrated, as deploying the military would send a clear message to the public that the threat is a serious one. If used for minor threats, the public may get the wrong message and get unduly worried or panic. On the other hand, if used in a situation where panic has already ensued following the attack, it may help calm the situation.
Are there any plans for SAF to step up its responses to homeland security to deal with threats, such as terrorism?
On cybercrime, recently, there was a shocking report that hackers had hacked into the Bangladeshi Central bank accounts in New York with the Federal Reserve and stolen some $101 million. An investigation by US cyber forensic expert Fire Eye revealed that much of this money had been channelled to accounts abroad, including places like the Philippines and Sri Lanka.
We understand that the hackers had originally tried to wire out more than $1 billion but the US Federal Reserve managed to block some $850 million of this from being transferred out. Sri Lanka has since managed to trace around $20 million and returned these sums. But the money channeled to the Philippines, amounting to some $80 million, still remains untraced.
Clearly, the figures that were transferred out were staggering and a demonstration of the power of hackers being able to get through government institutions. So, it is very clear that states can become victims of cybercrime. An equally worrying trend is that the power of hacking is also being harnessed by state actors, too, including countries that are supposed to be friendly with each other. News, for example, of the German Chancellor Angela Merkel's phone being hacked by the US National Security Agency created diplomatic tensions between countries that were otherwise very good friends. But this may be a microcosm of state-sponsored hacking that is probably happening elsewhere as well.
Given that cyber threats are on the rise and state actors can be both victims as well as the responsible parties, does MINDEF have plans to develop capabilities to counter this threat?
Mr Cedric Foo Chee Keng (Pioneer): Mdm Chair, let me add to Mr Vikram Nair's cut on cybersecurity. As we know, e-commerce and communications have increased relevance in Singapore and we are becoming more and more reliant on it in the way we work, play and even in many aspects of the activities that we undertake. And particularly in Singapore, with our vision of becoming a smarter nation, cybersecurity is increasingly of concern.
The spectrum of cybercrime can range from highly sophisticated syndicates or to a lone wolf hacker or even a youngster who cannot just resist the chance to crack a password or hack a computer system. An example is the Singpass hacking incident back in 2014 where a man cracked some 300 user accounts and sold personal data to a gang based in China. The purpose? To apply for visas into Singapore. This man had hacked into the user accounts simply by guessing, I guess, through an algorithm, the login passwords of these users. It is fortunate in this case that the incident did not result in even more damage. Had the cyber perpetrator been a terrorist network, more harm could be inflicted.
I would like to ask the Minister how the various Government agencies and, in particular, MINDEF, coordinate with the newly formed Cyber Security Agency (CSA) under the Infocomm Development Authority (IDA) and the Ministry of Communications and information (MCI) to strengthen Singapore's cybersecurity. What measures are in place to prevent them? And if an attack does occur, especially affecting essential services like energy, water and banking, how would we be able to respond to them? What are our disaster recovery plans and business continuity measures?
Mr Low Thia Khiang (Aljunied): Madam, I note that SAF established a centralised Cyber Defence Operations Hub in 2013. Such capabilities are important today, given the network-centric nature of contemporary society and, indeed, military operations today. I have three sets of questions for MINDEF on these matters.
First, I would like to ask if MINDEF can assure the public on the readiness of SAF to handle cyber defence by explaining the types of threats it seeks to address. Cyberattacks need not simply be about conventional military operations. They can involve everything from gathering and corrupting sensitive information to disabling vulnerable civilian infrastructure, such as public utilities, communications, financial systems, emergency and medical response, business infrastructure and even transportation management systems. These actions can disrupt society and make it susceptible to pressure. How does MINDEF's cyber defence address these issues?
Second, what further capabilities does MINDEF intend to develop? How does MINDEF intend to ensure that Singapore is well-protected? Further, like other military systems, cyber defence capabilities may raise suspicions and tensions with neighbours that can, ultimately, make the nation less secure. How does MINDEF plan to mitigate this risk as it develops its cyber defence capabilities?
Lastly, cyber defence tools are powerful and hard to detect. How does MINDEF ensure that there is sufficient oversight of its systems to prevent inappropriate use by other individuals or Government agencies? Can MINDEF assure the public on this matter, such as by issuing an annual report or audit on cyber risks, breaches and mitigation efforts?
Mr Vikram Nair: Mdm Chair, defence diplomacy has been an important component of Singapore's defence strategy. While the Ministry of Foreign Affairs manages official diplomatic ties between countries, our armed forces have also played an important role in building relations with counterparts in other countries.
These ties have helped us get access to training spaces abroad, opportunities to train together with foreign armed forces and, perhaps most importantly, to build good relations with our counterparts and foreign militaries so that we will have friends should the need ever arise.
In this regard, two of the major powers that operate in this region are the US and China and both play an important role in the security and stability of the region. I was quite happy to know that Singapore has entered into a Defence Cooperation Agreement with the US as well as a Four-Point Consensus with China that will help deepen ties between these two countries. Can MINDEF provide an update on its defence relations with the US and China in the past year?
The Chairman: Mr Baey Yam Keng, you have three cuts. Please take them together.
Mr Baey Yam Keng (Tampines): Mdm Chair, as a little red dot surrounded by much larger countries, Singapore's security is inextricably linked to our ties with our neighbours.
It is, therefore, for very good reasons that Singapore shares long-standing defence ties with Malaysia, Indonesia as well as Brunei. It is known that senior MINDEF and SAF officials meet with their counterparts regularly. SAF also engages in regular bilateral exercises, high-level visits and professional exchanges.
With changes in leadership, developments in geopolitical situation, set in the context of an evolving regional and international security scene, how have our ties kept up with the times and different priorities?
I would also like to ask MINDEF for an update on the state of our bilateral defence relationships with our immediate neighbours. What are some recent exchanges that have taken place and how have these enhanced the interests of Singapore?
In June 2015, Prime Minister Lee Hsien Loong and then-Australian Prime Minister Tony Abbott signed the Singapore-Australia Comprehensive Strategic Partnership (CSP). Under CSP, the two countries aim to deepen cooperation across four fields: trade and economics, foreign affairs, defence and security, and people-to-people ties through a roadmap known as Project 2025.
On defence and security, CSP will build on strong existing ties between Singapore and Australia's defence establishments. Singapore and Australia are part of the Five-Power Defence Arrangements and both countries' armed forces have deployed alongside each other in the Middle East. Australia currently hosts military training by the Singapore Army and RSAF.
At the signing of CSP, Prime Minister Lee announced that Singapore and Australia also intend to conclude a defence cooperation agreement in 2016. So, what are the defence implications of CSP and how is MINDEF working to enhance defence relations with Australia?
Mdm Chair, the inaugural meeting of the ASEAN Defence Ministers' Meeting (ADMM) was held in May 2006. It was set up as the highest defence consultative and cooperative mechanism in ASEAN. Four years later, ADMM-Plus was convened to serve as a platform for practical cooperation between ASEAN member states and eight dialogue partners, namely, Australia, China, India, Japan, New Zealand, Republic of Korea, Russian Federation and the US. It has since met twice.
I would like to ask MINDEF if it could share why it engages other countries' defence establishments and militaries through these multilateral platforms. What has been achieved and what are some new areas of practical cooperation being explored through such multilateral fora? With the realisation of ASEAN Community 2015, how will ASEAN bring regional defence cooperation to new heights?
Mdm Chair, I understand that one of the areas of cooperation under ADMM is on disaster relief and humanitarian assistance in order for more united and effective response when a disaster strikes the region. In that respect, can MINDEF share how ASEAN members have worked together in recent regional disasters like the Sabah earthquake?
The current regional security landscape is also characterised by non-traditional security challenges, such as maritime security and the rise of violence and brutality committed by extremist organisations and radical groups. How are the multilateral fora helping Singapore to be better prepared for these new challenges?
Mr Zainal Sapari (Pasir Ris-Punggol): Mdm Chair, the increasingly complex and volatile security environment has prompted defence spending in the region to increase. Likewise, Singapore needs to ensure that we are still as capable and as ready to respond to such threats.
Threats to our sovereignty as a proud nation should not be tolerated and our security should never be compromised. With that in mind, I would like to ask the Minister if SAF's approach to defence spending has changed. Are there plans to increase defence spending at a faster pace and what are the new areas that we are focusing on in our defence spending?
Mr Pritam Singh (Aljunied): Mdm Chairperson, over a number of years, the publication of Defence White Papers has become an increasing phenomenon in the Asia Pacific region. China issued its first one in 1998 and Japan in 2005. When informing members of the public about the immediate security environment, the strategic direction of the military and its core mission, such white papers are effective in answering why there is a need to have a strong and determined force that is able to defend the sovereignty of the country.
However, what is sometimes not so well understood is the impact such white papers can have on improving and building confidence and trust among countries. In fact, before the latest 2016 Australian defence white paper was launched, Australia briefed China and Indonesia – two key partners – about its intention. In an S Rajaratnam School of International Studies (RSIS) commentary this year, a local researcher noted that Australia's 2016 white paper sent a strong positive signal to Southeast Asia and potentially contributes to the region's stability and peace.
More than a decade ago, the ASEAN Regional Forum suggested that defence white papers be published and exchanged. It was quite telling that the former Minister for Defence, Mr Lee Boon Yang, in 1995, quoted verbatim a section of the Australian defence white paper in this House, as a measure of the good relations between the two countries. It is my view that the wider publication of such initiatives through a white paper would serve MINDEF's interests, both nationally and internationally.
MINDEF, as the largest consumer of the national Budget, will always be queried about the nature and scale of its defence expenditure. These demands will grow and are not likely to abate in the years to come. In fact, it is noteworthy that the section on MINDEF comprises only eight pages of the Government's expenditure control document for financial year (FY) 2016. In contrast, the section on the Ministry of Law, a far smaller Ministry budget-wise, has more than 40 pages long.
There is no requirement for MINDEF to release any secret information in the prospective White Paper. But the current state of affairs is more than opaque, especially in an economic environment post-SG50, which ought to be marked by greater fiscal prudence in light of multiple national priorities, all worthy of equal consideration. A White Paper will put into perspective MINDEF's mission and requirements the one hand, and its budgetary needs on the other, in the context of the needs of a small state.
Finally, Mdm Chairperson, some years ago, the Taiwanese even released a comic book version of their white paper to cultivate an interest in military service among young readers. While I am not suggesting a need to do this, the point is that a White Paper offers great flexibility for MINDEF to determine how best to get its message out. The Japanese experience with white papers is quite telling, as it moves from a limited paper in 2015 to a much more comprehensive one last year. A MINDEF White Paper can be even used to showcase the seriousness MINDEF takes in its safety regime, something I will talk about in my next cut.
Assoc Prof Fatimah Lateef (Marine Parade): Madam, we live in an interconnected world, plagued by issues of terrorism, security threats, cyberattacks, technological warfare and many other undesirable activities. Not a month passes without some blasts, wars, disputes somewhere, which affect many innocent citizens. These are all major concerns for nations, including Singapore. National militaries around the world are all on high alert.
How does MINDEF ensure our armed forces stay relevant and attuned to the changing security environment and climate, with the background of all these challenges? How prepared are we to respond to such threats as a small nation with a small army? What are the other roles our personnel can play to help step up deterrence levels?
The Chairman: Ms Jessica Tan, please take your two cuts together.
Ms Jessica Tan Soon Neo (East Coast): Madam, with rising affluence, procuring the latest technologies and capabilities does not give us a sustainable edge. The SAF does pride itself in possessing cutting-edge capabilities. While the SAF does procure equipment and platforms from overseas, it has also been building Singapore's local defence science and technology capabilities through investments in personnel, facilities, technology and research and development (R&D) in complex defence systems.
What is the range of the local defence technology capabilities that we have? How are these capabilities contributing to the technology edge and indigenous technology science capabilities of SAF? And with the competing demands on engineering talent at the national level, what efforts is MINDEF making to ensure that it continues to have the required engineering talent and capabilities to build on our indigenous defence, science and technology capabilities?
We have seen heightened security concerns in the region and globally. With greater uncertainty and a wider spectrum of threats, including conventional as well as asymmetric threats, such as terrorism and cyber warfare, how then does the SAF ensure that our defence forces are operationally ready? What is the operational value of regular training that SAF conducts overseas? In what ways do these trainings give us the assurance that they, indeed, prepare our forces?
What is the objective of these overseas exercises in countries like the US, Australia, Germany, France and New Zealand? These countries differ in many aspects from our local and regional conditions, such as climate, landscape and vegetation. Such overseas training exercises do impact citizen soldiers as well as cost of operations. What is the SAF doing to ensure that our society will continue to support this commitment to defence?
To participate in such overseas exercises, our soldiers will need to be away from their families and work. While we need to achieve training effectiveness, how does the SAF balance the impact on work, family and opportunities for our citizen soldiers? With the disruption, pace of change and the need for continual learning and skills upgrading, how would the SAF respond to support our citizen soldiers as they face these changes in competing demands with the need of overseas training and operational requirements?
Mr Cedric Foo Chee Keng: Mdm Chair, my cut is on SAF's role in Military Operations Other Than War (MOOTW). SAF was established in 1965, as Members know, a necessity created by Singapore's Independence, with the primary focus on providing for Singapore's external defence.
Today, our 3rd Generation SAF is widely known to be well-equipped to defend Singapore against external threats. The SAF is well-respected as a strong and professional armed forces. It underwrites Singapore's sovereignty upon which all Singaporeans can live in peace and secure in the knowledge that Singapore is well-protected.
However, the threats facing Singapore have broadened beyond conventional war to areas like counter-terrorism, piracy and humanitarian assistance and disaster relief (HADR). Although the SAF has participated in many MOOTW operations, I believe the training syllabus of full-time National Servicemen (NSFs) and NSmen is still largely based on conventional armed conflict.
So, I would like the Minister to help us to understand how the SAF is preparing to confront the new challenges that I have described. How well is the SAF prepared as regards intelligence, technology and equipment to deal with counter-terrorism? Also, would the SAF be called upon to augment the Home Team in counter-terrorism operations over and above the protection of key installations, which I understand the SAF does today?
In 2015, Singapore assisted in various missions, such as fighting forest fires in Chiang Mai, Thailand and Sumatra, and also search-and-rescue operations in Nepal as a result of the earthquake. Many Singaporeans are proud of our SAF and the Home Team personnel who participated in these HADR efforts. Given that disasters will occur every now and then, whether here or abroad, I would like to ask the Minister if the SAF has sufficiently trained personnel to deploy in the event of major disasters in the region or around the world.
Mr Zainal Sapari: Madam, each Singaporean knows that we cannot take our security for granted. Situations today are increasingly volatile and news of newfound threats always seems to be getting a little closer to home. Understandably, this will cause some worry amongst our citizens. Today's threats do not present themselves until the last minute and, by the time they do, we have seen how it is often just a little too late in other countries.
While the SAF may be prepared to defend Singapore against today's threats, these threats – like everything else – will continue to evolve as well. Our approach to defence has not been about keeping up, but always ensuring that we are not one but several steps ahead. This provides us with the two-pronged benefit of deterring those who may mean to harm us, and also ensuring that we are able to react swiftly and decisively to any threat.
I would like to ask the Minister how the SAF is developing its capabilities to protect Singapore against the threats of the future. Can MINDEF provide an update on the SAF's transformation plans?
As our threats evolve, so should our defence capabilities. The consequences of failure on this part are extremely grave and we cannot afford to be complacent on this issue.
Assoc Prof Fatimah Lateef: Madam, a certain critical or minimum size is usually necessary for a nation's army. Our population replacement rate for Singapore is critically low and, with this, fewer babies are born each year. This also will translate to fewer recruits per cohort for National Service. How can SAF maintain our capabilities and capacity in view of these \"shrinking\" manpower numbers? How do we ensure we can maximise their potential?
We have also strategically, over the years, developed our capabilities in terms of a 4G-SAF and specialisation skillsets. Technological capabilities and enhancements have also been very active as well. Is this investment in technology and IT able to help us cope and compensate for our decreasing manpower numbers?
The Minister for Defence (Dr Ng Eng Hen): Mdm Chair, first, let me thank the many Members who have highlighted the security challenges that confront Singapore today. I think they have made their points eloquently, many valid points and accurate observations. Collectively, they bring home this truth that as much as all of us want peace, work for greater cooperation and understanding among countries, neither the world nor the region we live in is Utopia; that each generation of Singaporeans will face threats, and each generation will have to renew their commitment to protect what they value or lose it; that we can only depend on ourselves to defend Singapore; that we will need to work with other like-minded partners to deal with potential troubles along the way. Singapore and Singaporeans will have to gear up for \"troubled peace\" in this new era after SG50.
Each generation of Singaporeans will have to confront their own security threats. The founding generation, as Mr Vikram Nair pointed out, did not have it easy. Indeed, the 1960s and 1970s, as he said, were tumultuous times in Asia and, especially, for Southeast Asia. Whether it was Konfrontasi or the ideological battles against communism and communalism, these contests often led to violence or subversion. And because Southeast Asian states were newly-minted nations in the 1960s and 1970s, only recently freed from their colonial past, individual nations were more preoccupied with their national agendas, rather than cooperating as a region.
Geopolitics today has improved, and we talked about ASEAN. ASEAN is an accepted regional community in international dynamics. ASEAN has good growth and strong relations with other countries. But despite this progress, as Members have said, challenges exist. Assoc Prof Fatimah Lateef noted that we live in an interconnected world. And, indeed, what happens in some other part of the world, many Members have said that it occurs very far away but comes closer to home, as Mr Zainal Sapari said, whether it is terrorism or technological warfare. And as Mr Vikram Nair noted, there have been numerous developments recently in the South China Sea, more terrorist attacks, and a sophisticated cyberattack involving the US Federal Reserve.
Members have asked key questions − Mr Vikram Nair, Mr Pritam Singh, Mr Zaqy Mohamad, Mr Low Thia Khiang, Assoc Prof Fatimah Lateef, Ms Low Yen Ling, Mr Cedric Foo and Mr Zainal Sapari. In summary, they asked: what are the main security threats to Singapore and how significant are they when compared to previous years? How is the SAF responding to these threats? How can we keep Singapore and Singaporeans safe? How prepared are we? These are all important questions that can change our lives here irrevocably. I agree completely with Mr Zainal Sapari when he said that the consequences of failure will be great. So, I intend to answer these questions in the course of this reply for the Committee of Supply (COS).
First, terrorism. The clear and present threat upon us is terrorism. As of now, there is no specific intelligence of any imminent plot against Singapore, but the general assessment by our intelligence agencies indicates that almost all cities are likely targets, including Singapore. Members here already know of attacks in other cities in the past 18 months – Paris, Sydney, San Bernardino, Istanbul, Bangkok, Jakarta, Brussels and, most recently, Lahore. A few months later, you may have to add more cities to that list. Threat levels for Singapore from ISIS are higher than those posed by Al-Qaeda (AQ) and Jemaah Islamiyah (JI) when they were active. So, if you would like a simple number, what Al-Qaeda was able to attract − both sympathisers and operatives − in the last 10 years, ISIS has already exceeded the number in the last three years. So, our assessment is that the threat levels from ISIS are higher than that from AQ and JI. Let me explain our reasons for this assessment.
First, ISIS has greater means. ISIS controls territories and oil fields in Iraq and Syria from which they can draw resources to fund tens of thousands of fighters and further its goals. ISIS even uses drones for its operations, like a military. In fact, they are a military. They can orchestrate and coordinate attacks far away, as they did in Paris, Brussels or even near us, Jakarta. Their tentacles can reach far. Just this week, the Malaysian Police revealed that ISIS had allocated around S$100,000 to Katibah Nusantara − a network that Mr Vikram Nair pointed out. It is a Malay Archipelago Combat Unit, and ISIS had given them S$100,000 to finance terrorist attacks and bombings in Southeast Asia.
ISIS operatives and sympathisers have already formed networks in our region, as some Members have observed. In the past year, close to a thousand people from Southeast Asia have travelled to Iraq and Syria to join the fight, including Singaporeans. And more have been radicalised without even travelling to the Middle East. Most recently, Members would have read that four Singaporeans were prevented from joining the armed conflicts in the Middle East. As Members have pointed out, returning fighters will bring back their extremist ideology, share their experience in weapons, explosives and actual fighting. In addition, we know that they have linked up with existing cells, like the JI offshoot, Jamaah Ansharut Tauhid, and Abu Sayyaf. Greater means, as I said.
Second, ISIS has motive. In our region, ISIS has declared its mission to establish a wilayat, a \"caliphate\", and Katibah Nusantara is leading the charge. This central ideology of a Southeast Asian \"caliphate\" binds Islamic militants who have already set up training camps in Sulawesi, Aceh and in the Southern Philippines. Even the Uighurs are known to have joined a training camp in Sulawesi, led by the Indonesian militant, Santoso. I am not sure what the tenuous connections had been previously between militants in Indonesia and the Uighurs, but here, you have it − that ideology binds them together.
In this narrative, Singapore is an attractive target. Last year, Dabiq − \"Dabiq\" is an English-language newsletter published by ISIS − named Singapore among the \"enemies of the Islamic State\" and called on followers to wage jihad against us.
Third, ISIS has opportunity. Every shopping mall, every crowded place is an opportunity for violent extremists to target innocent civilians and cause as much suffering and mayhem as possible. ISIS operatives and sympathisers, especially what we call \"clean skins\" – those with no prior criminal record – can travel and smuggle components of arms and explosives. Changi Airport received over 55 million passengers last year, and many more crossed land and sea checkpoints of Singapore. The Ministry of Home Affairs (MHA) has stepped up security checks, but the terrorists only need to succeed once.
Under these circumstances, can Singapore – or, for that matter, any city – guarantee its residents that no extremist attack will occur? I think the answer is an obvious one. Only a foolish and complacent government will provide that false sense of security. Instead, we must step up our defences, bring our citizens into confidence and, more importantly, confront this threat and prepare to deal with the aftermath together.
I will elaborate on how SAF will respond to this. But even as we ask Singaporeans to prepare ourselves to deal with extremist threats, let me just say that we must be mindful, at the same time, of the trajectory of state-to-state relations surrounding us. As Members have pointed out, the disputes in the South China Sea and East China Sea are increasing. They are symptomatic of a more powerful dynamic of strategic rivalry and rising nationalism. This state of flux, different from post-World War II, different from the Cold War, is creating tension. This dynamic will stress existing military cooperation and alliances; it will stress international agreements or laws, even the United Nations Convention on the Law of the Sea (UNCLOS). Let me give a few examples to illustrate what I mean.
On a regular basis, Japanese fighter jets scramble in response to the People's Liberation Army (PLA) military aircraft that enter Japan's Air Defence Identification Zone (ADIZ). The PLA planes are flying into disputed airspace around the Diao Yu/Senkaku Islands. So, the Japanese would have to respond, and they scramble. It is a common occurrence.
Let me give Members a second example. The largest overlap in the South China Sea claims is between Vietnam's Exclusive Economic Zone (EEZ) and China's \"nine dash line\". Members would recall that just two years ago, Vietnamese and Chinese vessels clashed over an oil rig in the South China Sea. And you would remember that, in Vietnam, they held protests and burned down foreign-owned factories, meaning to target Chinese-owned factories. Unfortunately, some Taiwanese factories also got burnt. They could not differentiate. They hear them speak in Mandarin, and so, they got burnt. Just recently, the Vietnamese coast guard seized a Chinese oil tanker allegedly operating in Vietnam's waters. And for the first time ever − if you have not noticed this − a Japanese submarine arrived in Cam Ranh International Port. It called in Vietnam last month for the first time.
An example closer to home: the Indonesian Government has also taken a hard stance against illegal fishing in its EEZ. Since President Joko Widodo took office in 2014, Indonesia has confiscated and destroyed approximately 150 foreign fishing boats. Just last month, there was a standoff between the Chinese coast guard and an Indonesian patrol vessel. Indonesia has since announced plans to deploy fighter jets to the Natuna Islands. And supposedly, as a show of strength, military ships of the Indonesian National Defence Forces (TNI) are used to blow up these merchant vessels. It is not the most cost-effective solution. Military munitions cost more but, as a show of strength, they will use TNI to blow up the vessels.
As we observed, these incidents are occurring at an increasing regularity. We have to remember that they occur against the backdrop of Asia's highest military spending ever. In fact, collectively, Asia has spent more on its defence than Europe, in absolute dollars, since 2012. We have exceeded Europe. Rising nationalism and improving economies have fuelled many Asian countries to spend larger and larger sums to modernise their militaries. In itself, this is not wrong. But with more capable militaries, miscalculations or missteps can precipitate serious tensions and even physical conflicts.
As we look around and look at our security challenges, this troubled peace around us reaffirms our policy on steady and prudent defence spending. Mr Zainal Sapari asked about this, as well as Assoc Prof Fatimah Lateef. I want to thank Members from all parties here – Non-Constituency Members of Parliament (NCMPs) included – for their steadfast support for the defence budgets over the years. Together, Members in this House were wise not to have taken short periods of peace for granted. As some Members have pointed out, Singapore, too, could have gone down the path of European countries to reap our own \"peace dividend\" because the threat of communism had waned and we see ASEAN progressing. But if we had been so lulled into that complacent mood and under-invested in defence capabilities, then, just like countries, such as Finland or the Baltic states, I think we would have regretted it now and rushed to catch up. But we avoided spikes or dips in our defence spending and maintained a strong SAF.
The next decade would not be easy for Singapore. In fact, I believe that the next few decades will pose to Singapore its greatest challenge since our Independence. We have never had a situation where our factors of production are on the decline and our needs are going up. Even in the 1960s and 1970s, when our needs were going up, we reaped our demographic dividend. But in 2030, we will have nearly one million people above 65 years old, our workforce is declining and our social spending needs to go up.
But even as our population ages and social spending increases, we must maintain steady defence spending because that is the most effective way to stretch every defence dollar. It allows us to plan long term. It allows us to avoid disruptive changes from fluctuating expenditures. It is very difficult, as Mr Sapari has pointed out, and other countries have discovered, to suddenly wake up and say, \"Oh, I need a stronger defence because the threats have gone worse\" and then quickly expect to build a strong defence. It will be too little, too late.
This PAP Government will continue to invest wisely and spend prudently on defence. For MINDEF, we buy only what the SAF needs, and after a robust and stringent evaluation process. We do not go around shopping for expensive or highly sophisticated stuff. We adopt the most cost-effective solution, looking clearly at what we need. And our first preference is to upgrade existing platforms, if we can do it. For example, like the F-16s, we are going to upgrade them. We only buy new equipment if Singapore needs them to maintain that defence edge.
Some Members have asked how I see our defence expenditure going forward. Our defence expenditure has roughly kept pace with inflation, growing by about 4% annually in nominal terms over the past decade. I expect to maintain the same trajectory in the longer term, but we have to watch inflation and see if there is deflation or lower rise of inflation. Sometimes, it does not get passed on to the equipment we buy so quickly. So, we have to observe.
Is this era of troubled peace hyped up? Some have said so. Some have questioned: do we really need that kind of defence? The US, the world's most wealthy democracy with the largest and most capable military, can perhaps take that line and live with the consequences, if something goes wrong. But for Singapore, a little red dot in the middle of a region with extremist threats, rising nationalism and strategic rivalry, we should guard against the worst and prepare ahead.
Indeed, some scholars and even world leaders have suggested that the face of \"war\" has already changed and is upon us. According to them, unlike in the past when wars were fought in specific localities, today's conflicts are increasingly borderless, and occur wave after wave. So, against extremism, first there was AQ, 9/11. That was weakened. Now, ISIS. But if ISIS is defeated, I believe another group will rise to take its place. It may not be in Iraq or Syria but there is a host of failed states that an extremist group can gain a geographical foothold in and take the resources, whether it is Libya or other countries.
In cyberattacks and biological pandemics, ground-zero can be anywhere. We were worried about bird flu in Indonesia; for the Severe Acute Respiratory Syndrome (SARS), it was in some parts of the world; Zika virus in some countries; it can arise anywhere and spread very far quickly. This troubled peace, according to this new narrative, is the new normal in our globalised world.
Mr Zaqy Mohamad talked about hybrid warfare that is ongoing. Indeed, it is the antithesis of Total Defence. And if you think about it, that generation was prescient and very clever in launching Total Defence – this was more than 30 years ago – because hybrid warfare is an orchestrated campaign to weaken and fracture the solidarity of a target nation. It is no laughing matter because it is actually being practised.
According to this doctrine, the aggressor targets a specific country or countries and undertakes a long-term campaign to undermine the civil, economic, social, psychological and military defences. That is equivalent to our Total Defence. For example, ISIS employs hybrid warfare skilfully and exploits social media in sophisticated ways to target the young and innocent. Even online games, which seemingly are innocent, are used to socialise youngsters to their cause, and the shocking propaganda videos of beheadings and burning people go viral and attract more sympathisers.
Members have talked about cyberattacks. Cyber attacks are integral parts of hybrid warfare. Last December, unidentified hackers attacked Ukraine's power grid and disrupted electricity to a large part of the country for hours. Just imagine our power grid is down, traffic lights are out, power stations fail – you can gut out the country quite easily.
Adversaries can, therefore, cripple key operating systems of target countries, steal their state and people's secrets, invade the hearts and minds of their people, all without stepping foot onto their soil. Singapore is particularly susceptible to hybrid threats because we are an open economy and connected to the world.
Members here have asked how the SAF should respond in this new normal of troubled peace. I am glad to say that there was foresight in leaders in MINDEF and the SAF to have identified these broad challenges more than a decade ago. It was, as Mr Cedric Foo pointed out, that the previous SAF construct could not have addressed this wider spectrum of threats decisively because the previous structures of the SAF, as Members here know, centred on combined arms within the Army, with a competent Air Force and Navy. They would have been inadequate to deal with non-traditional security challenges – natural disasters or hybrid threats, such as cyberattacks or terrorism. But as Members have pointed out, the spectrum of today's threats continues to widen and evolve and the SAF must adapt. Let me share what the SAF is doing to respond decisively.
With your permission, Mdm Chairman, let me display an infographic on the screens to show how SAF is stepping up for counter-terrorism.
The Chairman: Yes, please. [Slides were shown to hon Members.]
Since 9/11, the SAF has stood up task forces to deal with peacetime threats. These task forces are geared up in high readiness posture, fully manned to respond quickly even with little warning. Let me elaborate on these task forces. The Special Operations Task Force (SOTF) is drawn from the Commandos, the Naval Diving Unit and assets from across the three Services and they will be our SAF's first responders in counter-terrorism and other contingency operations. There is another task force for homeland security and this is called the Island Defence Task Force and it is operational. In other words, it safeguards our homeland security with active and NS servicemen protecting key installations. You would have seen them if you are in Changi Airport, if you are working in Jurong Island and Sembawang Wharves. They regularly conduct patrols with the Home Team and, because they are tasked to deal with real threats, they are armed and given clear rules of engagement.
At sea, the Maritime Security Task Force protects our waterways, and the Air Defence Task Force keeps a close watch over our skies. After the 2008 Mumbai attacks, our response plans were again strengthened to tighten our linkages with home-front and other Government agencies.
We have assessed, as we said, the rising threat of terrorism. In the next few months, the SAF will redouble our efforts to gear up for counter-terrorism. First, studying what happened in Paris, Jakarta and Brussels, the SAF will enhance its incident response. The SOTF must have the capability to respond even faster when activated, and have the means to neutralise armed attackers, in addition to hostage rescue.
Some Members have asked: can we use technology? Indeed, we have to and we must. The SAF is working with our defence engineers and scientists to equip these special forces with better tactical sensors like micro-Unmanned Aerial Vehicles (UAVs), perhaps small enough to fit in your palm and well-suited for urban terrain. We will continue to develop new technologies and tools that will give the SAF an edge in this fight against terror.
In this, working with the Home Team closely and seamlessly is crucial if we are to bring to bear the full strength of our security capabilities. SAF is working closely to share intelligence and develop joint operational command systems. We are conducting more joint exercises together. Last year, Exercise High Crest was conducted to validate our whole-of-Government response to simultaneous maritime security threats. In that exercise, various agencies, the Singapore Police Force (SPF), the Home Team, SAF, the Singapore Civil Defence Force (SCDF), the Immigration and Checkpoints Authority (ICA) and the Maritime and Port Authority (MPA), worked together to intercept a terrorist speedboat, storm a hijacked merchant vessel and deal with the aftermath.
Second, more SAF units will be trained to take on a wider range of security tasks. We do not assume, as Ms Low Yen Ling says, that attacks will only be carried out by lone wolves or wolf packs – smaller groups – like those which occurred in Jakarta. We must be able to deal with orchestrated attacks, like those which occurred in Paris and Brussels, where airports, mass rapid transit (MRT) stations, shopping malls and town centres are targeted simultaneously. To deal with these scenarios, more SAF units will be trained to conduct deterrence patrols in populous areas. These units will be better equipped to perform their tasks. So, for example, we commissioned last year the Peacekeeper Protected Response Vehicle (PRV), which will give our responders greater mobility, protection and more precise firepower to deal decisively with threats.
How do we train? I think that is a question that some Members asked, including Mr Cedric Foo. I agree with Members that for SAF soldiers to competently undertake this range of missions, we will have to continue to invest in new and realistic training facilities. SAF has decided to build a new high-density urban training facility and this will have features, such as high-rise buildings, mock-up transport nodes and complex road networks. And that will provide a highly realistic training ground for counter-terrorism as well as conventional urban operations.
But as some Members rightly pointed out, beyond our homeland response here, we need to address the threat at its source. Because only when the source of the threat and recruitment is diminished or eradicated, can the situation here improve. It was so for AQ. If we did not address or diminish the capability of AQ, more cells like JI would flourish. This is why Singapore has been involved in multinational counter-terrorism operations since 2007, first, against AQ in Afghanistan, and now against ISIS.
Last year, the SAF deployed our KC-135R tanker to support air-to-air refuelling operations, and we also deployed an Imagery Analysis Team (IAT). This IAT is tasked to monitor suspected terrorist facilities and activities to help the coalition partners in disrupting supply chains that feed terror networks here. The commanders there have commended our efforts and asked the SAF to continue the IAT deployment which we have extended for another year this year.
Even as the SAF gears up for troubled peace and the present threat of terrorism, the SAF will continue to conduct realistic exercises at a high tempo to maintain a strong deterrence. Members, such as Ms Jessica Tan, have asked about this, whether they are important. I will tell Members that they are very important because that is where we can validate our capabilities. Singapore is not very large to train in. My Terrexes can go at 70-90 kilometres/hour. Training exercises might be finished in 15 minutes if you are going at that speed.
We need the large space because we have so many platforms, so many different units working to bring it together and say, \"Would it work? Can we talk? Can we hit a moving target? Can we orchestrate and how quickly? Can we learn from the mistakes?\"
So, we need the places, as we do in the US in Exercise Forging Sabre, and Exercise Wallaby in Australia and Exercise Cope Tiger in Thailand, not only to validate our systems, but in joint exercises to benchmark our own capabilities and to show others our capabilities. Because when the SAF is able to perform in exercises, people will take us seriously.
We will continue these exercises and we want to make sure that they are mindful of NSmen's commitments. Even the NSmen who have gone, when I talked to them after their exercises, they feel motivated. They feel, \"Oh, I did something, I can manoeuvre here\". I remember visiting some of them in Bionixes, and they said, \"Here I can manoeuvre a lot, whereas in Singapore, you know, it is short circuits\".
Most recently, the SAF took over command of the Combined Task Force 151 for the fourth time for our counter-piracy efforts. Some Members have pointed out that piracy has occurred in the Straits of Malacca as well as the South China Sea. We believe that we should help contain piracy in any part of the world and, so, we are in the Gulf of Aden.
As Members have pointed out, we may be called to help in Humanitarian Assistance and Disaster Relief (HADR) missions and peace support operations like the Nepal earthquake and the forest fires in Chiang Mai and Palembang, and we will train for that – something which Mr Cedric Foo asked about. We will look at not only training, but set-up structures, which is why we started the Regional HADR Coordination Centre in Changi.
Some of you have asked about shrinking manpower pools and how we can address this. I think Assoc Prof Fatimah Lateef noted the demographic trends and Ms Jessica Tan asked how technology can continue to be used to maintain the SAF's edge. I agree with the Members that it is a vital tool, without which we cannot multiply our efforts.
Ms Jessica Tan asked how we can continue to compete for defence engineering scholars. First of all, we will compete. I want my unfair share. SAF wants its unfair share. We will introduce a new SAF Engineering Scholarship to attract bright young individuals with the interest and commitment to join SAF as military engineers. Just as with the recipients of the SAF Scholarship, those who take up this SAF Engineering Scholarship will be able to depart for their university studies earlier, so that, on their return, they can apply their specialised skills and knowledge to the SAF as military engineers. This is important because they will form the next generation of leaders in our engineering corps to ensure that we maintain an edge in defence technology.
Some Members – Mr Pritam Singh and Mr Zainal Sapari – have asked about hardware. We will continue to refresh and upgrade platforms at a sustainable pace. This is in lieu of a White Paper. Our SAF is not very big that there will be much more information that I can give in the White Paper than what I am telling Members here. So, if Members see what we have in Changi Naval Base, see what we have in Sungei Gedong, see what we have in the airbases, it is all there.
The fact that we primarily raise the SAF for deterrence, people understand. And we make friends with other people. We are not quite like Australia, which I think needs a White Paper for now and then to, as Mr Pritam Singh say, show others. For Singapore, for the SAF, we make friends with everyone and our defence is purely for deterrence.
The Navy is acquiring eight versatile Littoral Mission Vessels (LMVs) to replace our long-serving Patrol Vessels. The first LMV, Independence, was launched in July last year and is expected to be operational by early next year. We have two new Type 218SG submarines. I will tell Members that the development is on track. They will replace the ageing Challenger-class submarines and should be commissioned by 2020.
This year, the Army will also launch a new Protected Combat Support Vehicle to provide better protection and mobility for our supporting troops. For RSAF, our Super Pumas and some of our Chinooks are ageing and will need to be replaced. We are finalising our evaluations and expect the new RSAF helicopters soon. We will announce it when we finish the evaluations. For the F-16s, as I have said, we are upgrading them with more advanced radars – the Active Electronically Scanned Array (AESA) radars – and air-to-ground weapons.
The SAF will deploy more unmanned platforms, beyond what we already have – the UAVs, so that manpower resources can be freed up for other missions. The Navy envisages that unmanned vessels may eventually complement our ships to patrol our waterways and clear underwater mines. Likewise, our Army may use Unmanned Ground Vehicles to conduct security patrols.
Mr Vikram Nair, Mr Low Thia Khiang and Mr Cedric Foo asked about our cyber defences – well put questions. We consider this threat as a very serious one. It can potentially be more destructive than even physical intrusion, because it can disrupt our key installations. I would say that this is also a national priority. Nationally, the Cyber Security Agency (CSA) was launched last year under the aegis of the Prime Minister's Office (PMO); overseeing is PMO and Deputy Prime Minister Teo who oversees the National Security Coordination Secretariat (NSCS). Some of the Members' specific questions on national security should be put to that agency.
But for the SAF, as Mr Low rightly pointed out, what we set up recently was a Cyber Defence Operations Hub (CDOH). We will have to increase the headcount. I will not give Members the exact numbers but I will just say that we will double the headcount by 2020.
Cyber intrusions occur daily. For those in this business, it is not tens; it is not hundreds; it is not thousands; it is hundreds of thousands or millions of network event logs. You use algorithms, smart software, to try to remove the bulk of them and identify suspected intrusions. But what you are worried about are not the ones that sort of deface your page and make you lose face but does not really affect you. What you are worried about is cyber attack, things that can burrow into your systems, steal secrets or have a trigger at a particular time to render you defenceless.
This is of national importance. There is structure, there is organisation, and much of it is what we call \"security by design\". You design security into your networks even as you build them. You can address these questions, as I have said, at the national level to CSA.
For the SAF, we expect to use more artificial intelligence and better data analytics to detect and respond to these cyber threats. We will build greater security into our software design, shore up the defences in our network architecture to make them more resistant and resilient to cyberattacks. This includes hardware infrastructure. There will also be substantial investment into developing more and better-trained cyber defence personnel. The SAF will work with the national CSA.
We spend a significant amount of our resources to maintain a strong defence but, even so, Singapore cannot face our security threats alone. It is foolhardy to try, and we will fail. For example, to stop the spread of terrorism globally, we are stepping up our intelligence-sharing with our neighbours in Malaysia and Indonesia, and partners, such as the US and Australia, so that they can provide us with early warning and help us apprehend suspects that intend to do us harm. This is particularly important as militants have been using Southeast Asia as a transit point.
Beyond intelligence, we continue to build up enduring partnerships to strengthen regional security. Mr Baey Yam Keng and Mr Vikram Nair asked about our defence diplomacy efforts. We are friends with all and we cultivate relations with all, and we continue to build good ties with our closest neighbours, the Malaysian Armed Forces (MAF) and the TNI, the Indonesian National Defence Forces. We will also be celebrating the 40th anniversary of our defence relations with Brunei this year.
Mr Vikram Nair asked about China and the US. Last December, US Secretary of Defense Ashton Carter and I concluded the enhanced Defence Cooperation Agreement. This agreement updates and deepens our defence ties to cover non-conventional security areas, such as counter-terrorism, biosecurity and cyber defence. It is that close relationship with the US which has given us access to much-needed training space and high-end defence technology. Whether it is our F-16, F-15, Chinook or Apache helicopters, our pilots train extensively in the US and they are given access to training areas many times the size of Singapore.
Mr Nair asked about China. We agreed on a Four-Point Consensus for our military ties in 2014, to \"promote confidence building… and strengthen practical cooperation\". With China, we introduced a new bilateral naval exercise series named Maritime Cooperation last year. We will build on these initiatives to encourage China to continue to play a peaceful and constructive role in the region.
Mr Baey Yam Keng asked about Australia, on the CSP. The defence relationship is a very important one. Many SAF servicemen go to Exercise Wallaby, train in sizeable areas and we hope that this partnership will take us even further in personnel exchanges, counter-terrorism and R&D collaborations, through CSP that the two Prime Ministers endorsed last year.
Apart from our bilateral efforts, some Members have asked, as Mr Baey Yam Keng did, about the Shangri-La Dialogue and ADMM. Some Members have asked why we engage in these. To paraphrase Churchill, \"jaw-jaw is better than war-war\". Yes, this requires effort but, more importantly, coming together as a defence community promotes a rules-based security architecture, things that we can agree on, that are underpinned by international law and which create opportunities for dialogue and practical cooperation. Sometimes, it helps us, as some Members rightly pointed out, in responding to contingencies and crises like HADR.
But let me nuance that. We are not NATO. It will take us a long time before we think of ourselves to be anything like NATO, and I am not even sure if the NATO structure is optimal for ASEAN. We cooperate in partnerships with the understanding that it cannot mean that you subsume your sovereignty or your control of your military forces to other countries. It just will not work in ASEAN.
Where we can, we will cooperate and have dialogue. For example, the ADMM-Plus Maritime Security and Counter-Terrorism Exercise will be conducted this year, which Singapore will co-organise. It will involve 18 militaries and build trust among one another and reduce the risk of mishaps at sea.
Mdm Chair, Total Defence was launched more than 30 years ago, as Mr Zaqy Mohamad pointed out. But the threat that we now face from extremist groups like ISIS makes Total Defence more relevant than ever. Because just as damaging as physical harm, extremists can sow deep mistrust among Singaporeans and weaken our social cohesion.
The crucial question is this: after an extremist attack, will it splinter our society? Will it paralyse Singaporeans and sow discord through fear? We want to hear what Singaporeans hope to do to strengthen Total Defence and encourage more ground-up ideas. Senior Minister of State Mohamad Maliki and Senior Minister of State Ong Ye Kung are leading these efforts and will share more about our SGFuture engagements later.
Mr Pritam Singh asked if MINDEF or SAF should do more, whether it is a Defence White Paper or other aspects, to shore up support by Singaporeans and external countries in terms of our defence capabilities or defence intentions. I think that is a noble goal. How we do it effectively, we can discuss. But I would say that we conduct periodic polls – these are sometimes population surveys. Thankfully, the support for defence has been very high. In last August's polls, 97% of Singaporean respondents felt that the Government had performed well in defence and national security.
At the core of Total Defence is societal trust – trust among one another as citizens, trust between commanders and soldiers, trust between the Government and people, trust between the SAF and those we promise to protect.
The SAF knows that it can only build this trust by living by its values. One core value which all soldiers pledge is to defend Singapore with their lives. SAF commanders and soldiers must put Singapore and Singaporeans first, above their own well-being, whether it is in training or operations.
Six years ago, both engines of one of our Apache helicopters failed mid-flight. Apache has got two engines; both failed. For MAJ Adrian Quek and MAJ Spencer Ler, let me just say, it would not be an exaggeration to say that probably their lives flashed before their eyes and their lives were at actual risk – it could have been their last flight. But they acted professionally and, as every airman is taught, ensured that civilian lives were not put at risk, even if it meant endangering their own.
They glided in free fall from 10,000 feet, reached the ground in two minutes. In the meantime, while they were in free fall, they manoeuvred the helicopter down to an open field away from buildings. The pilots survived and, more importantly, no civilians were injured.
We see this duty to put others before self, exemplified by our own NSFs. Three years ago, LTA Kamalasivam, put his life on the line to save a recruit during a live grenade exercise. The recruit had accidentally released the hand grenade lever. As many Members here who have done National Service know, when you release the lever, you throw the grenade, because that is when the grenade is activated. He released it. This officer did not panic, immediately instructed the recruit to throw the grenade, then shielded the recruit as he pulled both of them down behind the concrete walls. Fortunately, both escaped with minor wounds.
I wish I could promise Singaporeans that risks do not exist for our SAF soldiers who are asked to protect Singaporeans, who are asked to train hard and conduct missions. But all of you know that risks exist for all militaries – whether it is helicopters, infantry or ships. We will do all that we can to carry out our training and missions safely, because each life in Singapore is precious.
Ultimately, I would say, for the SAF, the lives of Singaporeans must come first. [A slide was shown to hon Members] That is MAJ Quek and MAJ Ler, and that is LTA Kamalasivam receiving the SAF Medal for Distinguished Act on SAF Day. He was an NSman; after the incident, he decided to sign on and be a regular. I am very happy he joined the SAF. These two pilots and this officer exemplify the core value of selfless service in the SAF.
Mdm Chair, in this troubled peace, the SAF will train hard, prepare well and continually adapt to protect Singapore. I again ask and thank Members of this House and Singaporeans for their unstinting support and commitment to maintain our strong defence. With Singaporeans strongly behind and with us, the SAF will respond decisively to all those who seek to do us harm and protect this precious island we call home.
Mr Lee Yi Shyan (East Coast): Mdm Chair, as the Minister for Defence has just assured the House, SAF is respected as a strong and professional armed forces. In addition to having cutting-edge capabilities, a key element in maintaining a strong and professional armed forces is effective training.
At MINDEF's COS debate in 2015, Minister Ng Eng Hen also said that the SAF had consistently benchmarked with militaries from other advanced countries and tested its systems through realistic training and real operations. He also discussed ways in which MINDEF and SAF had been prudent in their land use for training space.
Given Singapore's land constraints and the increasing complexity in the battlefield, in what new ways is SAF improving its training and learning systems in a way that overcomes resource constraints? How is SAF ensuring that our servicemen maintain a high-level of operational readiness?
The Chairman: Mr Pritam Singh, you have two cuts. Please take them together.
Mr Pritam Singh: Mdm Chairperson, the NS training system has come a long way, helped in no small part by MINDEF's readiness to take on board the inputs of NSmen and their families. It bears repeating that NSmen are frontline soldiers and training must be taken seriously. However, for some soldiers, there are some areas of the NS training cycle that can be improved, subject to operational and budgetary exigencies.
One suggestion is to consider how more NSmen can be deployed to the NS units more quickly than before; ideally not more than two years after their operationally-ready date. This would have the advantage of ensuring that the fitness levels of NSmen remain relatively high with a less steep physical training curve when preparing for the Individual Physical Proficiency Tests (IPPTs) or in-camp trainings (ICTs).
Secondly, I would like to seek an update with regard to the mismatch between high and low-key ICTs for some NSmen. Some clock many low-key ICTs and fewer high-key ones, leading to a long wait before they are emplaced on MINDEF's reserve list. To what extent have SAF NS units been able to implement make-up high-key ICTs as recommended by the Committee to Strengthen National Service (CSNS)?
Finally, MINDEF has been generous towards NSmen over the years, topping up our Central Provident Fund (CPF) accounts through our NS journey. However, in view of the renewed impetus towards lifelong learning and particularly SkillsFuture, can I ask MINDEF, when it next reviews its NS policies, to consider topping up the accounts of NSmen with additional SkillsFuture credits through the course of their NS training cycle in recognition of their lifelong commitment towards National Service?
Mdm Chairperson, one of the things that goes under the radar for many Singaporeans is the intensity at which the SAF plans and trains for war, and for operations other than war. This is not surprising as a lot of our training is done overseas in view of the shortage of training grounds in Singapore, with the SAF going to places such as Germany, France, Australia, Thailand, India, Taiwan, Thailand, Brunei, New Zealand and the US, amongst others, in addition to ad hoc exercises with countries like China.
It is inevitable that with such a high training tempo, accidents and mishaps can happen, in spite of the SAF's best efforts and the best efforts of the commanders. I would like to suggest that MINDEF consider ramping up publicity of its training safety efforts for the general public's information. A section or a part of all open houses and public outreach campaigns can be dedicated to this purpose. While the information may not attract as many viewers as a Leopard tank on display, it would be an important reflection of MINDEF's commitment to safe and tough training in a realistic environment.
Assoc Prof Fatimah Lateef: Madam, defence of a nation is critical. For Singapore, our position at the crossroads of global trade and travel makes it a very strategic as well as a very vulnerable location. Thus, in defending our nation, every effort, every individual counts. The SAF Volunteer Corps (VC) was introduced to enable persons who are not eligible for National Service to come forward to serve. They are altruistic individuals and they act as our defence ambassadors, doing so voluntarily.
Can MINDEF update us on the initial batches of the Volunteer Corps? What has the experience been training them? Also, are there refinements needed to the scheme?
We also welcome the many advocates who support our National Service and defence movement in Singapore. These persons and organisations are representatives from businesses, institutions, individuals and even small and medium enterprise (SME) employees. How does MINDEF plan to continue to engage this important group of people and organisations and continue to strengthen our relationship with them into the future?
Ms Joan Pereira (Tanjong Pagar): Mdm Chair, allow me to begin, first, by stating my appreciation on behalf of many mothers, the good work that NS has done to help our boys become men.
Our NSmen form the backbone of our national defence system. As a small country with an ageing population, we have to plan well to enable each serviceman to maximise his potential in protecting Singapore. To fulfil their duties, our servicemen have to make a lot of sacrifices, take time from their studies, work and family life. So, it is only appropriate that they be given due recognition.
Hence, I was glad that CSNS was set up to examine how the NS system can be strengthened for the future. Based on feedback, CSNS made recommendations in five areas: (a) strengthening NS training system; (b) increasing opportunities for NSmen to contribute; (c) establishing the SAF Volunteer Corps (SAFVC); (d) enhancing recognition and benefits for NSmen; and (e) expanding community support for NSmen.
As a result, MINDEF and MHA adjusted the pre-enlistment medical screening and administration schedule to enlist servicemen between four to six months. Last year, MINDEF also announced the revamp of the National Service Recognition Award (NSRA) into the NS HOME (Housing, Medical and Education) Awards, which will provide additional MediSave and MediShield Life grants.
Would the Ministry provide an update on new initiatives by CSNS? How has MINDEF continued its efforts to recognise the contributions of our NSmen?
Dr Lim Wee Kiak (Sembawang): Madam, the first batch of 9,000 youths were called-up for NS in 1967 where they spent two to two-and-half-years in full-time service and thereafter more than a decade serving NS for a few weeks annually. They are all part of the Pioneer Generation. Now they are 67 years old.
Every Singaporean will know of someone serving or have served NS. That someone may be a father, husband, brother, son or, for some, even grandson. Occasionally, we are reminded of NS when we turn on our TV or radio. We hear the broadcast about mobilisation, of in-camp training as well as mobilisation of resources with certain call signs.
But beneath this calm and peaceful environment, thousands of men are donned in their green fatigues or pixelated uniforms on land, air and sea. A small part of them are professional soldiers but the bulk are our operationally-ready NSmen. They have trained hard in all aspects of warfare, sometimes in the day and other times at night. Some would go overseas to train in various terrains, brave the thunderstorms during the monsoon season, or brave the gales and high seas, jumping off the plane with parachute and so on and so forth. Combat ration and cup noodles are luxuries during field training. Sometimes, night becomes day and day becomes night. When in uniform, you do not worry about time. Your focus is achieving your mission, meeting your combat objectives. How do I know? Well, I know all these because we have been there, done that with our fellow NSmen. I am still an active NS Navy medical officer.
Because we have a strong defence force as a foundation, this peace and security allows us to prosper and thrive. Our NSmen answered to the call of the nation and serve in various vocations in the armed forces a few weeks annually. During those few weeks, they will miss their families; their work will be shouldered by colleagues at their workplaces.
NS has done a lot for our country. Apart from putting up a strong defence force, NS also builds up a strong spirit of camaraderie – a Singapore identity among the men. NS is a platform that allows men to gel, eat, sleep and train together regardless of race, language or religion. NS is a passage, a bonding experience, for many Singaporeans across all walks of life.
Intake after intake, our NSmen have answered to the call of duty. Their competence and commitment are, indeed, qualities that would make every employer proud. Our men have undertaken so many missions, from humanitarian missions in the aftermath of natural disasters to participating in United Nations multinational military missions.
I would like to ask the Minister how MINDEF or SAF can do more to recognise the sacrifices and commitment of our NSmen. Since our NSmen contributed and played an important role in our country's security, perhaps we should consider other quantifiable way of taking care of them, such as providing them free coverage through MediShield Life when they are 60 years old and above. Since they have spent their youth defending our country, it is only right for the country to take care of them when they are old.
As NSmen form the majority of personnel in our defence force, they are assets to our defence. It is also important to provide training and develop our NSmen both professionally and personally. What are the programmes available in this aspect and what can MINDEF do more in this area?
Mr Muhamad Faisal Bin Abdul Manap (Aljunied): Madam, I have two suggestions and three clarifications on SAF compensation.
First, will MINDEF consider including psychological issues, such as post-traumatic stress disorder (PTSD) or depression arising from training or operations, in its definition of disability? This condition can be debilitating over the long term and affect the ability to perform duties or work after leaving the service.
Second, Singapore spends large amounts on defence annually. How do we allocate funds to ensure that our NSFs and NSmen are adequately covered? How does MINDEF advise its members on SAF Group Insurance and ascertain that they are adequately insured? Will MINDEF consider covering the full cost of insurance or co-paying private insurance when citizens serve their NS obligations?
Third, how does MINDEF assess the adequacy of the Work Injury Compensation Act (WICA)-based compensation model? An injured or disabled person may need long-term care, equipment or facilities that go beyond medical services or prosthetics. This may drain the family financially and emotionally and may even require a family member to leave work to provide long-term care. How does MINDEF assess if the permanent loss of income and the cost of care for the lifetime of a disabled person are adequately covered?
Fourth, does the compensation framework take into consideration cases where injured service personnel are ineligible for insurance coverage after they leave the service or are forced to pay much higher premiums?
Lastly, what is the total amount MINDEF sets aside for compensation and support for long-term disability or death in this year's Budget?
Dr Teo Ho Pin (Bukit Panjang): Madam, the recent terrorist attacks in many countries, such as Belgium, France, India and Indonesia, have raised concerns among many Singaporeans. Today, extremists are influenced by misinformation and wrong religious teachings to cause harm to innocent people. The change of tactics by these extremists to attack soft attacks, such as concert halls and cafes, has posed new challenges to the security forces of many countries and their people. Besides causing physical damage to property and killing innocent lives, these terrorist attacks have also affected the trust among different races and religions or between the government and its people. Thus, many countries are stepping up their anti-terrorism efforts to cope with these new threats.
Likewise, in Singapore, our Government has been strengthening our Total Defence capabilities to protect Singaporeans and prepare them for such attacks. In view of the rising security threats, I wish to ask the Ministry the following questions: (a) what is the total defence readiness of Singaporeans; and (b) what more can be done to strengthen resilience among Singaporeans?
Madam, I am concerned that many Singaporeans are still not well equipped to handle emergencies, such as bomb explosions or natural disasters. Many do not have basic emergency preparedness (EP) knowledge or skills, such as first-aid, cardiopulmonary resuscitation (CPR), automated external defibrillator (AED), and are not aware of EP response protocol. I understand that SG Secure will be conducting EP skills training in the community. I hope that Singaporeans will adopt a more serious attitude to learn and practise these skills properly. EP skills will make a difference between life and death in times of emergencies.
The Chairman:\tMr Amrin Amin, you have three cuts. Please take them together.
Mr Amrin Amin (Sembawang): Thank you, Mdm Chair. On Total Defence, we face a growing threat of extremist ideologies that threaten to undermine our multiracial and multi-religious harmony and divide us. What role can Total Defence play in strengthening our resilience against such threats? What are MINDEF's efforts in fostering Singaporeans' commitment to Total Defence?
Threats and challenges to our security continue to evolve. Global security developments, such as terrorism, epidemics, economic crisis and environmental disaster, impact Singaporeans at home and abroad. What role can Singaporeans play in defence and how can we be a resilient society in the face of such varied security challenges?
The most advanced military hardware in the world would be useless without the willingness of our people to defend the country. Our safety and security depend on the contributions of all Singaporeans. Singapore is worth defending and can be defended. This core belief must be instilled and maintained in every Singaporean. What we cannot defend, we do not own. How is MINDEF engaging Singaporeans to strengthen the commitment in the defence of Singapore?
Mr Lee Yi Shyan: Mdm Chair, last year, Singaporeans celebrated its Golden Jubilee during which we recognised the contributions of the Pioneer Generation and leaders in nation-building. Thanks to them, Singaporeans have enjoyed decades of relative peace and stability. For the younger generations of Singaporeans, events, such as Konfrontasi, racial riots and Singapore's road to Independence, are study subjects rather than personal memories.
For many in the younger generation, the outpouring of recollections when Mr Lee Kuan Yew passed on, may have been the first time they learned of the hardships our Pioneers had endured to build the Singapore of today. Even as we move past SG50 and SAF50 celebrations, there are still many ways in which we can recognise our Pioneers and tap on their wealth of experiences.
How is MINDEF working to engage younger generations of Singaporeans on defence issues and foster a stronger commitment to defence amongst our youths? Does MINDEF plan to tap on the experiences and wisdom of SAF Pioneers? How is MINDEF using social media to engage young people and Singaporeans at large?
Given the multifaceted nature of threats to Singapore's security, all Singaporeans must stand ready to play their part in the Total Defence of Singapore. Modern threats evolve quickly and our concept of Total Defence must also be updated to adapt to global, regional and societal developments and challenges. Can MINDEF provide an update on its 2016 Total Defence Campaign?
Mr Muhamad Faisal Bin Abdul Manap: Madam, I am a strong believer in having an inclusive and open SAF that is fair and just to all Singaporeans regardless of race, language and religion. As such, in the COS debate last year, I urged the Minister to seriously consider the possibility of ensuring that all navy vessels are equipped with halal-certified kitchens so that Malay/Muslim Singaporeans will be able to serve freely in the navy vessels without any constraint. I would like to seek an update from the Minister on whether MINDEF has made any progress on this matter in making navy vessels more friendly to Malay/Muslim Singaporeans. If efforts have been made, how many vessels out of the total number currently in active service have halal-certified kitchens?
I understand that SAF's deployment of our NS soldiers is based on aptitude, abilities and commitment to Singapore. I would like to see the practical issues, such as the installation of a halal-certified kitchen on board a navy vessel, addressed and resolved promptly, so as not to further deprive and shatter the dreams of eligible Malay/Muslim Singaporeans from serving our nation in the navy on board a navy vessel.
Mr Baey Yam Keng: The Advisory Council on Community Relations in Defence (ACCORD) serves as a channel for the community to provide feedback on issues concerning Singapore's defence. Besides the NSmen, regulars and NSmen, the buy-in extends to their families, friends, colleagues and society at large. Practically everyone in Singapore has a stake. ACCORD members have played and are playing a significant part in building public acceptance and support for Singapore's security and defence needs.
Can MINDEF provide an update on the work of various ACCORD Councils in the past year? How extensive and representative has public engagement been and will be done?
Mdm Chair, building buy-in from stakeholders and the larger community is a two-way process. SAF also has to be understanding, accommodating and compassionate while maintaining the integrity of our defence system where it is the duty of every Singaporean man.
Recently, a resident came to my Meet-the-People session to appeal for a 15-day exemption from a one-month-long mobilisation manning period. This is because his company just sent him on a five-day incentive trip to Europe for his outstanding work performance. But he only got to know about this one week before the manning period. As it was a rare opportunity for him, he would like to extend his trip for another 11 days on a personal holiday.
So, the human resources department of his company, which is a major local bank, emailed to the SAF to appeal for him. It was a very cordial and professional email. So, I was quite surprised with the tone of the reply by the Commanding Officer (CO), and I quote an extract: \"I still have the prerogative to fully reject his request to even go for the business trip, let alone the personal trip. I have not received his payslip and commission. I have also not been furnished the total cost of business trip to Italy. I have to finally state categorically that I manage 300+ men. The standards I set have to be complied with by the rest of the men. It is not as simple as you may think.\"
I am glad that my resident eventually managed to get permission to go on his incentive trip, but not the extension. However, I feel that the CO could have been friendlier and understanding when he dealt with the company which was appealing for its staff. I am sure such instances are very rare, but I do hope that MINDEF could advise their officers to be more mindful.
The Chairman:\tSenior Minister of State Ong Ye Kung.
The Senior Minister of State for Defence (Mr Ong Ye Kung): Mdm Chair, I am having a bad cough but I will try my best.
As our security environment becomes increasingly complex and volatile, we need not only advanced equipment and technologies, but also the continued contribution and commitment of every NSman.
Today, I will talk about three areas of efforts important to NSmen – effective training, meaningful recognition and instilling pride. In the process, I should be able to answer most of the questions raised by Members in their cuts.
Mr Lee Yi Shyan asked about improvement in our training and learning systems. The soldiering skills of our servicemen are gained, honed and maintained through rigorous training. But Singapore does not have large tracts of land for military training and we have to make training realistic through innovative means.
Take, for example, live-firing. To allow servicemen to gain greater confidence in their shooting skills and handling weapon systems, live-firing ranges are now equipped with targetry systems that can replicate realistic operational scenarios.
Further, live training is augmented by simulation training, which develops our soldiers' cognitive decision-making skills, while sharpening their physical war-fighting skills. One example is the Motorised Infantry Simulator Centre, launched in October 2015. It hosts a suite of simulators that provide tactical training for selected weapons and platforms.
Besides rigour and realism, another critical element of training is safety. Mr Pritam Singh asked about public engagement on training safety. I think this is a very valid concern that we also share. SAF has a very good safety record. But we are not congratulating ourselves. Instead, we will strive to continue to improve.
We recognise that for every Singaporean male serving NS, there will be loved ones at home worrying about their safety. To give them peace of mind, family members who visit the Basic Military Training Centre (BMTC) are shown how training is conducted and the safety precautions we take.
Training safety is also featured in many of our public engagement events. And I have noted Mr Pritam Singh's suggestions for more of them. I hope the Members of this House, especially all those like Dr Lim Wee Kiak, who are still actively serving NS, will help us by playing a part to assure the public and all our residents on our strong emphasis on training safety.
Unfortunately, much as we try, there will inevitably be injuries and casualties. Mr Faisal Manap asked about our compensation framework, and gave several suggestions, when that happens.
Our compensation framework takes reference from and is more generous than that under the Work Injury Compensation Act (WICA). Any compensation amounts are generally two to four times that provided under WICA. MINDEF also pays for all necessary medical expenses incurred at Government and restructured hospitals or clinics for the treatment of service-related injury, for as long as required. Beyond compensation provisions, our welfare frameworks provide additional support to the servicemen and their families through the SAF Benevolent Fund and the SAF Care Fund.
But any form of compensation would never be adequate to make up for any permanent loss of limb, or worse, life. Mr Faisal Manap rattled off many suggestions. I was trying to catch them, after hearing them for the first time. But the impression I get is, I think, do not go down the road where recognition of NS becomes a valuation of the sacrifice and any compensation counts to the dollar. Because it will never be enough. You lost a limb, you lost a loved one. It will never be enough. But we will have to do what we can that is fair, and we hope that our compensation and welfare frameworks can provide adequate support when unfortunate incidents happen in the course of service.
Mr Pritam Singh also asked about the management of NSmen undergoing Operationally Ready NS (ORNS). Let us first talk about when ORNS starts. And I must say that it is also in the interest of the SAF for ORNS to start as soon as possible. But not in the first year, because those would have just \"ORD-ed\" or completed their compulsory two-year NS stint, and it is quite difficult for them to be called back in the first year.
Currently, the majority of NSmen in operational units are called up for ORNS training within the first two years after their ORD. But some NSmen may begin their ORNS training cycle later for a variety of reasons, such as their being overseas for work or study, deferred due to heavy commitments, academic or professional, or they are pending medical reviews. They may also be trainers or headquarter staff who do not have a unit and need to be redeployed to another unit. That accounts for the majority of the reasons why ORNS starts later for certain people.
Notwithstanding, where feasible, we will ensure ORNS training starts as soon as possible. It is in our interest because, especially when you ORD as a unit, you want to keep the unit together and the camaraderie going.
There are a few ways. One way is to ensure that the first few years of ORNS comprise shorter, low-key trainings. And that facilitates the calling up. Second, we have tied up with local universities to facilitate the call-up of the students. This also ensures that ORNS training starts early. Third, is to make some changes to how we deploy NSmen. For example, trainers who went through full-time NS at the Basic Military Training Centre (BMTC) may be deployed as training instructors at our Training Institutes. These measures ensure that ORNS training starts early. More importantly, it holds the unit together, keeping the camaraderie going.
Then, there is the issue of when ORNS ends. Since 2006, we were able to reduce the ORNS cycle from 13 years to 10 years. A great number were able to complete by their early 30s, when they have many more preoccupations in life. There is a structure to the 10 years of ORNS – starting with low-key, perhaps company-level training, before ramping up to high-key, longer exercises.
However, when an NSman misses a high-key training due to health reasons, extended overseas assignment or, like Mr Baey Yam Keng just told the story, due to being given an incentive trip, he may then disrupt his ORNS cycle. Some of us may have experienced that ourselves and we end up undergoing more low-key ICTs and not fulfilling our high-key ones. There are a couple of scenarios when that happens; when you miss high-key ICTs. If he remains in the same unit, then he may be called up for other ORNS activities throughout the year, such as operational briefings, exercise preparations. These are typically low-key ICTs and they clock up. If he is deployed to another unit, he will then follow the operational requirements and call-ups of the new unit, which will include both low- and high-key ICTs.
Ultimately, this is not an easy issue. Deferments for various work, health, family reasons, they are ever rising. We are all getting so busy, and the SAF needs to be understanding to these competing life priorities – a point that Mr Baey had just made, too. But, at the same time, this disrupts and affects the completion of the ORNS cycle. We will continue to do our best to facilitate as many NSmen as possible to complete their ORNS cycle early, while meeting the SAF's operational needs.
Ms Joan Pereira and Dr Lim Wee Kiak asked about updates on what we \tcan do more in terms of recognition for NSmen, and this is one of the key recommendations of CSNS. We have been finding ways to show appreciation to our NSmen and those who support them – the NSman Tax Relief, National Service Housing, Medical and Education (NS HOME) Awards, SAFRA facilities. These forms of recognition are important to let them know that their sacrifices are deeply appreciated and for the greater good of Singapore. We will enhance the recognition for NSmen in three ways.
First, today, we have the Family Recognition Voucher scheme where NSmen receive vouchers which they can use at many outlets and merchants. We will enhance it and rename it as the NS Excellence Award. But the change is not just in name. The number of NSmen who are awarded vouchers in recognition of their good performance during ICTs and NS courses will increase. Today, it is the top 10%; it will increase to the top 30%. The amount will also increase. The top 10% will receive $200 while the next 20% will receive $100, which is the amount awarded today. We will also be introducing Celebratory Gifts for NSmen. They will receive $100 worth of vouchers when they get married or welcome a new child into their families.
Second, in the later part of 2016, we will enhance the basic life and personal accident insurance coverage for NSmen from SAF, SPF and SCDF. This will cover all incidents during full-time NS and ORNS activities. Each serviceman will be covered for $150,000 in group term life and in group personal accident insurance.
Third, we will improve SAFRA facilities. The new SAFRA Punggol club will be completed in April 2016. Actually, it is kind of completed and is just waiting to be opened. I have visited the clubhouse. It has a very attractive set of facilities. In the northeastern region, there are 82,000 NSmen and their families. I believe the clubhouse will serve them well. But ultimately, the best reward for NSmen is that, together, all of us, we live in a peaceful Singapore and our families are safe. That is the best form of recognition.
Dr Lim Wee Kiak also asked what more we can do to help NSmen in their professional and personal development.
Today, SAF already deploys some NSFs to vocations where their existing skills can contribute to operational requirements. These include NSFs with relevant medical or engineering backgrounds, who can serve as medics or technicians or navy medical officers.
In addition, we will continue to work with the Workforce Development Agency (WDA) to accredit the leadership and vocational skills learnt during NS, such as for military police, paramedics, and aircraft technicians. This would be useful to our NSmen. We will do more to consider the skills and abilities of our servicemen during deployment, while balancing operational requirements. For example, the manning of critical vocations and commander positions must always remain a priority. Ironically, these are the key positions where you do not receive skills certificates.
In NS, the commanders always say, \"In NS, we chiong sua\". It means we charge up the hills together, build camaraderie, train together, and that is something we take back and is valuable to us, but there is no certificate for that. But each of us understands, that when we went through that, we took back something and we grew from \"boys to men\".
We must also recognise stakeholders that support NS, something that Assoc Prof Fatimah Lateef raised. Last year, we revamped the Total Defence Awards and recognised 122 NS Advocates who have demonstrated tremendous support for NS. There is one example. Digistore Solutions Pte Ltd is an SME that has provided strong support for their NSmen employees. In addition to ensuring that their employees' work responsibilities are covered, they provide paid family trips to nearby locations, such as Malacca, Bintan, for employees who complete their ICTs. I heard that during ICTs, they even deploy company transport to send their employees' kids to school.
To better recognise such companies, this year, we will launch a national accreditation scheme, the NS Mark. This scheme recognises organisations supportive of NS and Total Defence and encourages more employers and businesses to adopt human resource practices that support our NSmen. Under the scheme, organisations will be awarded either the NS Mark or the higher-tiered NS Mark (Gold), and top NS Mark (Gold) organisations will be further recognised as NS Advocates.
Third, serving with pride. The NS institution is only as strong as the commitment and fighting spirit of our NSmen. We see this spirit in many of our NSmen. Despite having to juggle NS duties with day-to-day family and job commitments, these NSmen set aside time to attend courses to upgrade their vocational and leadership skills in preparation for their higher appointments in NS. We also see NSmen extending service to contribute to national defence. For instance, NSmen with the relevant expertise in engineering and psychology have volunteered for the Expertise Conversion Scheme.
Often, what motivates our NSmen to serve with such dedication are the camaraderie and friendships forged with their fellow NSmen in the units. Last year, one of our NS Commanding Officers, Lieutenant Colonel (NS) Darren Tan, shared a Facebook note dedicated to his battalion, 823 Singapore Infantry Regiment (SIR). Let me quote him on his battalion's mission statement, I assume he wrote it, \"One family with unwavering passion to excel in the protection of our home.\"
Corporal (NS) Mohammad Azmi Bin Arifin deferred his honeymoon so that he could complete an important evaluation test with his battalion. I assume it was with his wife's approval. First Sergeant (NS) Mok Shing Chi, despite being diagnosed with cancer, continued to serve his ICT with the help and support of his NS buddies.
Our NSmen can keep this spirit of serving going because Singaporeans are united in supporting NS. This spirit is also demonstrated by women, new citizens and first-generation Permanent Residents (PRs) who have come forth to serve in the SAF Volunteer Corps (SAFVC), which Assoc Prof Fatimah Lateef had asked about.
We are proud that last year, 226 volunteers from a diverse range of backgrounds and ages completed their Basic Training. More than 80% of the Volunteers have progressed to the next phases of training. Volunteers who have completed the requisite training have since been deployed in vocations, such as Auxiliary Security Troopers and Naval Bridge Watch Keepers.
Alexander Voss, a Singapore PR and one of our Volunteer Auxiliary Security Troopers, shared, \"I have had a growing desire to give back to Singapore, which I think of as my home, and play a part in our nation's defence\".
Just last week, the first intake for 2016 completed their Basic Training. Moving forward, we will continue to see SAFVC volunteers deployed in diverse roles to better support our NSmen in defending Singapore.
Mdm Chair, next year, we celebrate 50 years of NS. The introduction of NS is a significant milestone in our nation-building journey, occurring shortly after Singapore gained Independence. Then, in this House, there were heated debates by an earlier generation of Members.
Today, I think the situation is totally different. We are all united in upholding the institution of NS and, as Dr Lim Wee Kiak said, NS has even become a form of national identity. Indeed, the efforts of our NSmen and those who support them have been instrumental in establishing the bedrock of peace and stability upon which we have built Singapore. Let us continue to ensure NS will remain a source of pride and strength for Singapore.
The Senior Minister of State for Defence (Dr Mohamad Maliki Bin Osman): Mdm Chair, last year, Singapore celebrated 50 years of Independence and we reaffirmed the beliefs, values and attitudes which contributed to building the Singapore of today. But some may wonder: will we make it to SG100?
We are confident that our home and way of life are safeguarded by an advanced and highly trained SAF, but we must know that our security agencies cannot do the job on their own. Ultimately, it is the responsibility of every individual to participate in the defence of Singapore. I am heartened that many Singaporeans I spoke to during focus group discussions shared this view.
This idea of strength in unity is captured in this year's Total Defence campaign theme \"Together We Keep Singapore Strong\". The threats and challenges we face since Total Defence was introduced 32 years ago have evolved, but the message to respond as one people remains equally, if not more, important today.
Take the experience of Paris last year, when terrorist attacks claimed 120 victims. The initial shock gave way to a strong show of solidarity by the French. Just two weeks later, Paris hosted the 2015 United Nations Conference on Climate Change involving more than 140 world leaders and around 40,000 attendees. Today, despite increased public security measures, Parisians have not withdrawn into fear and doubt but have returned to their daily routines in celebration of the city's strength and resilience. As President Hollande said, \"[the terrorists] have a cult of death, but we have a love of life.\"
As Mr Amrin Amin pointed out, we need to be resilient as we face evolving threats. I fully agree. In 2011, following the arrest of 15 members of the Singapore JI branch, interracial confidence circles in schools and workplaces were formed to promote inter-religious understanding. We emerged stronger from the episode, but it became clear that security agencies cannot fight the threats alone. As members of the public, we can play our part by being vigilant and sounding the alarm if we find something amiss.
For example, a self-radicalised youth was detained in April last year after a friend noticed changes in him and alerted the authorities before he could carry out his attack plans in Singapore. The battle today, and in the future, is not one waged by tanks and planes. It is a battle that needs to be won in our hearts and minds as we guard against influences that threaten our social cohesion.
Mdm Chair, the SAF is a microcosm of Singapore society, with soldiers from different backgrounds, religions and race. I would like to remind Mr Mohamad Faisal Abdul Manap that Singapore is a secular state and all Singaporeans enjoy the right to practise their religions under our Constitution. Apart from Islam, religions, such as Buddhism, Hinduism, Christianity, Judaism and Sikhism, also practise certain dietary restrictions. However, we do not insist that public eating places cater to any specific religious requirement. Rather than encouraging any one religious group to push fully for its own strict requirements, our approach has been to accommodate as far as practicable the needs of devotees of different religions while maintaining the common space and common goals for all.
So, in hawker centres, school canteens and food courts, for example, there are halal and vegetarian food stalls, but there are no specific corners for halal or vegetarian tables. This facilitates social integration, where Singaporeans come together, eat in the same space and interact. This is the cornerstone of our multiracial society and Singaporeans accept this. Similarly, there is no strict requirement that all restaurant kitchens must be halal-certified before they are allowed to operate.
The SAF operates similarly, just like society at large. In our camps, where space is available, we make provisions for halal food to be prepared separately from non-halal food, but our soldiers eat together in our dining halls. Where space is limited, vegetarian and halal food are brought in from centralised kitchens instead of being prepared in the cookhouse. In operations, like field camps, we provide combat rations that are halal, and vegetarian options are also made available.
The preparation of halal food requires strict adherence to the religious stipulations governing the food source, preparation and even storage. For Navy ships, space is always a premium which needs to be maximised and prioritised for key operational requirements, such as for combat systems, ammunitions and equipment spares. Nonetheless, we make provisions for our Muslim servicemen on board ships by providing options, such as seafood, chicken and vegetables. Similarly, we make provisions for non-Muslim Navy servicemen with specific dietary restrictions, wherever possible.
Our practice is similar to other Navies, including France and the US. SAF will accommodate where we can, but the SAF's operational priorities come before individual needs. Our servicemen and women understand and accept this. They are prepared to make sacrifices where needed and are committed to defending Singapore and all that we stand for.
Let me talk about the points raised on ACCORD. I am heartened that Singaporeans understand the importance of the community's role in the nation's defence and provide useful feedback through ACCORD.
Assoc Prof Fatimah Lateef and Mr Baey Yam Keng asked for an update on the work MINDEF has done to strengthen the community's support for NS. I am pleased to update that ACCORD has implemented 14 out of 18 proposals submitted last year to strengthen support for NS.
First, the Family and Community (F&C) Council has encouraged almost 70 businesses to show appreciation to NSmen by offering discounts and benefits through the \"We Support YOU in NS\" programme. The response from our NSmen and their families has been very positive. The F&C Council also improved their outreach to women through partnerships with the Singapore Council of Women's Organisations and the Women's Integration Network of the People's Association.
Second, through the Educational Institutions (EI) Council, four Post-Secondary Education Institutions piloted fitness programmes to help pre-enlistees get ready and fit for NS. These are their students. The results are encouraging. At Temasek Polytechnic, for example, the fitness programme increased the IPPT pass rate of participating students by more than 25%. In addition, the EI Council reached out to Singaporean and PR students in Foreign System Schools and Privately-Funded Institutions to help them understand the importance of NS. The United World College of South East Asia was so enthused that they hosted an NS Information Evening for 430 pre-enlistees and their parents from nine Foreign System Schools.
Third, the Employer and Business (E&B) Council piloted a post-ICT letter to employers, to recognise useful skills and attributes of our servicemen which are invaluable in the business world. Last year, 122 individuals, businesses and organisations were awarded the NS Advocate Award for their outstanding support towards NS. Absolute Kinetics Consultancy Pte Ltd was one of the winners. They demonstrated their strong support for NS by providing incentives for NSmen who excel in their IPPT and recognising employees who do well during NS.
What is most heartening is that these projects were initiated and led by members of the respective councils themselves. Their passion and enthusiasm are truly inspiring. In 2016, we can look forward to an expanded \"We Support YOU in NS\" programme and more exciting collaborations with Families for Life to reach the wider community. We will continue to encourage more pre-enlistee fitness programmes and engender broader-based support for NS through the \"NS Mark\" later this year, which recognises supportive employers, businesses and organisations.
Mr Amrin Amin and Mr Lee Yi Shyan asked how MINDEF is encouraging Singaporeans to strengthen commitment to defence. The SAF regularly organises events to educate the public on our defence capabilities in a fun and engaging way. For instance, the RSAF will organise an Open House in May this year. Later in June, the Singapore Army and the Republic of Singapore Navy (RSN) will hold an exhibition and Navy@Vivo respectively. We project to reach out to over 250,000 visitors through these events.
Last year, we launched the Commitment to Defence (C2D) Ambassadors programme to allow our SAF Pioneers to engage and inspire the younger generation with personal stories of Singapore's early struggles and our accomplishments in the face of adversity. Our younger generation found the sharing sessions interesting, authentic, and I quote, \"not something we can get from the Internet\".
For example, C2D Ambassadors like COL (Ret) Goh Lye Choon would captivate his audience by recounting his experience fighting infiltrators in the jungles of Kota Tinggi during Konfrontasi. According to C2D Ambassador MAJ (Ret) Ashim Mochtar, our youths are far from apathetic. They are passionate and understand the need for Singapore to stand up for itself.
Dr Teo Ho Pin asked about the public's readiness to address a variety of evolving threats. MINDEF agrees that the public needs to join the conversation on ensuring our future security. Therefore, we integrated this year's Total Defence campaign with the SGfuture citizen engagement initiative, under the theme \"A Secure and Resilient Nation\".
One of the discussion participants, Mr Saravenan said, \"It was good to see that we feel strongly about our country and care enough to share.\" Many have also contributed interesting ideas to bring Total Defence to life, such as by running crisis simulation exercises to demonstrate the importance of Total Defence in overcoming hybrid threats. We will continue to explore how such ground-up ideas can revitalise community action for Total Defence.
We held a Total Defence exhibition in February and March this year. The exhibition featured individuals like Ms Nur Arfa, who was only 13 years old when she volunteered with \"Citizens on Patrol\" to spread awareness on crime prevention in her neighbourhood; as well as groups like the Religious Rehabilitation Group that fight religious extremist propaganda. Mr Lee Beng Kit, an exhibition visitor, said, \"It is nice to see people contributing to society in their own ways. After all, Total Defence is about everybody coming together to keep Singapore strong, regardless of race, language and religion.\" We hope that the exhibition showed that there is much each individual can do to keep Singapore strong.
This year, we refreshed the Total Defence song \"There's a Part for Everyone\". I am sure Members can all remember that song from many, many years ago. But the updated version is a lot more hip. Indeed, with updated lyrics and a new upbeat arrangement by home-grown band QuickPick, the familiar medley caught on very quickly. The song was re-introduced to schools and reached more than 600,000 TV viewers over a 10-day period. Even Minister Ng Eng Hen was game enough to sing along to the refreshed song, helping us reach out to half a million people through his Facebook page. Unfortunately, I do not have time to show the video today. I hope that all of us will renew our commitment to Total Defence each time this song is sung.
We also continue to engage Singaporeans through platforms like the ciNE65 short film competition and N.E.mation! digital animation competition. Hoon Wei Ting, from Victoria Junior College, was so inspired by her participation in N.E.mation! last year that she volunteered to help out and share her experience with participants this year as well. We hope that when these competition clips are shown nationwide, they will encourage conversations about Total Defence and inspire all to do their part to keep Singapore strong and resilient.
Mdm Chair, MINDEF and the SAF also reach out to a diverse audience through various media platforms. Our stories highlight the sacrifices our NSmen make and the tough training they undergo to defend Singapore. Those who caught the \"Ah Boys to Men\" movies said it \"shed (light) on the untold story of our unsung heroes\". Programmes, such as the \"Commandos\" documentary series, \"Women in the SAF\" and \"SAF Pioneers\" were all well-received. We are heartened that Singaporeans' commitment to defence remains strong, and we will continue to share more of our stories in the coming year.
After 50 years of nationhood, the threats we are facing have evolved, but so have our responses. The future is uncertain, but I am confident that if we see ourselves, first and foremost, as one people and have the resolve to work together to strengthen our military, civil, economic, social and psychological defences, we, as a society, will be resilient enough for any challenge that comes our way.
The Chairman:\tWe have a bit of time for clarifications. Dr Lim Wee Kiak.
Dr Lim Wee Kiak: Thank you, Chairman. I have two clarifications, both for the Senior Minister of State, regarding the NS Mark and NS Gold Mark. What are the specific criteria for the companies to achieve these? May I suggest that, the Government, being one of the largest employers, make sure that our own Statutory Boards and Government agencies all achieve NS Mark and NS Gold Mark even before the private sector firms do it?
Secondly, regarding the low-key and high-key ICTs, personally, I also know of a few people who served many, many low-key ICTs somehow. Is it possible for them to consider accumulating that? For example, if you serve three or four low-key ICTs, it is equivalent to one high-key ICT. The number of days, added together, forms a sacrifice as well. I think we should recognise that, too.
Mr Ong Ye Kung: I thank the Member for the questions. For the first point on the Statutory Boards, I would say that MINDEF agrees with the Member. As for the details of the NS Mark Scheme, they will be announced in the latter part of the year.
On accumulating low-key ICTs to become high-key ICTs, this is a suggestion that had been raised before. We have looked at it and we will probably continue to look at it. But I think there is a limit. Just as I do some extra push-ups, do one more broad jump, one more shuttle run, it does not equal a 2.4-kilometre run. So, there is a limit to that logic.
Mr Vikram Nair:\tMdm Chair, I would like to discuss one of the new threats that the Minister mentioned, which was cybersecurity. There is CSA and I think MINDEF are looking at cybersecurity issues. I am just wondering what is the coordination between the two, because there will be a lot of joint issues faced by both. One looks at, I understand, state-related issues; the other looks at domestic, commercial facilities and so on. I think there is probably a lot of coordination required and lots of the types of threats both tackle will be similar.
Dr Ng Eng Hen: Madam, if I can provide a simple structure. The national coordinating agency for Singapore and whole-of-Government is the CSA. Its task remit is to secure, if you like, the cyber environment for the whole-of-Government. Whole-of-Government also includes the private sector. For instance, CSA engages key clusters. The financial cluster is key; transport, power, and so on and so forth. That is its remit. And it is structured under PMO.
For the SAF, we are responsible for cybersecurity of our own military networks to make sure that we can conduct a defence – there are some things that I would not tell you – but we can conduct our defence. We are not dependent on your networks.
Mr Pritam Singh:\tThank you, Mdm Chairperson. My question is directed to the Senior Minister of State. I am just following up on the high-key ICT issue. According to the CSNS, one of their recommendations was to implement make-up high-key ICTs. Can I just get an update from the Senior Minister of State how far SAF has gone into this? Because if I hear the Senior Minister of State correctly, it seems as if there may be difficulties in implementing this recommendation.
Mr Ong Ye Kung: There is a limit. Of course, make-up high-key ICT is to redeploy them to another unit which is going through a high-key ICT. In the process, what we lose is that he is no longer in the unit. To many NSmen, that actually is quite important because your friends and comrades are all from that unit.
While we try to implement the make-up high-key ICT, it is also in our interest to cater to young people and their many preoccupations. If they can finish their ORNS by their early 30s, then start to have babies, get their flats and start to work hard and be more focused on their career, I think it is a good thing. So, it is totally in our interest to make sure it ends as early as we can, early 30s if possible.
Mr Muhamad Faisal Bin Abdul Manap: Madam, I would just like to repeat what I have said in my speech that I am a strong believer in an inclusive and open SAF. I do not think that I need the Senior Minister of State to remind me that Singapore is a multiracial and multi-religious society.
Madam, I bring this issue up because of what the Minister had answered to a question posed to him during one of the public forums regarding why there are no Malays serving in the Navy vessels. The Minister mentioned that it is due to practical reasons or practical issues. My point is that since this is a practical issue or practical problem that exists, has this practical problem been resolved practically? So, that is my purpose. I believe if this practical reason can be resolved, it will further foster the inclusivity of SAF or RSN.
Dr Ng Eng Hen: Madam, a point of order. The Member is quoting me and I do not know what he is quoting. If he can show what I actually said in the conference or at the meeting, I am more than happy to accommodate what I said.
But I think there is a larger point. Mr Faisal Manap says he does not need to be reminded that we are a multiracial, multi-religious society. But he is only championing in his speech for Muslims.
Senior Minister of State Maliki made it clear that if each of us in this House – Muslims champion Muslims, Christians champion Christians, Buddhists champion Buddhists – we have never pushed for each group to fully push for their rights, for their observances. I think Senior Minister of State Maliki was very clear: where it is practicable, we will lean forward; the SAF, as with the rest of society.
So, in camps where there is adequate space, as Members know, we have Muslim cookhouses, vegetarian food is served. But we made it clear that, for the Navy, that space is always a premium. We have answered the Member's questions fairly.
But there is a larger point in this: what is the tone of the society, the tone of the SAF? Because in the SAF, I draw from all Singaporeans. I have people who do not eat beef. I have people with religious observances, apart from Muslims. I have vegetarians. Where we can, we will accommodate. But the overriding principle must be that the SAF's operational concerns must come first, and individual needs sometimes must subsume under that. Where we can, we will accommodate.
I am certain that there are situations where I cannot please all, accommodate all requirements. I cannot, hand on heart, assure you that all my mobile kitchens are halal. And sometimes, if we can, we will offer combat rations which are halal, which are pre-prepared. But fresh rations sometimes are served in the field. So, there are all these instances.
The SAF is a complex machinery. And I think our overall point is: where we can, we will lean forward as with the rest of the society, but always with the understanding that the SAF's needs and operational concerns must come first. There may be individual sacrifices that we make, but we deploy based on merit as well as commitment.
The Chairman: Assoc Prof Fatimah Lateef.
Assoc Prof Fatimah Lateef: Madam, I would like to ask the Senior Minister of State whether the training for the SAF Volunteer Corps is structured to meet the capabilities of the persons. Because I do know of a group of ladies who are actually considering joining but worry about their physical capabilities, myself included.
Mr Ong Ye Kung:\tThe training is different from the full-time NS training. It is in three different phases and it will be structured according to the physical abilities and also the interests of the volunteers.
The Chairman: Mr Faisal Manap.
Mr Muhamad Faisal Bin Abdul Manap:\tMadam, I would like to reject the Minister mentioning me as someone who is always championing Malay/Muslim issues. We can check the Hansard. I believe that I have voiced out more national issues, compared to Malay/Muslim issues. And I believe it is my role and responsibility as an elected Member of a minority community in the Group Representation Constituency (GRC) system, it is my responsibility and role to voice out Malay/Muslim issues based on the voices that I gather from the community.
Dr Ng Eng Hen: Madam, I am very pleased to hear that the Member will champion issues for all religions.
The Chairman:\tMr Vikram Nair, would you like to withdraw your amendment?
Mr Vikram Nair: Mdm Chair, I would like to thank the Members for their contributions, and the Minister and Senior Ministers of State for their responses. I think we have had a very lively discussion. In many countries, the military is seen as a powerful remote organisation. In Singapore, it is quite different. In Singapore, because we have NS, I think almost everyone is either serving in the military or know someone who is serving in the military. So, in that sense, it is very close to home. At the same time, it is respected around the region, it is respected by our contemporaries, I think that is quite an important achievement.
Madam, I am proud of the SAF and proud also to be serving in the SAF. I am now into my Reservist on Voluntary Extended Reserve (ROVER) stage. It is something many of us are proud of. With that, Madam, I beg leave to withdraw the amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $13,296,000,000 for Head J ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $671,000,000 for Head J ordered to stand part of the Development Estimates. (proc text)]
The Chairman: Order. I propose to take the break now.
[(proc text) Thereupon Mdm Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Mdm Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.05 pm.
Sitting accordingly suspended
at 3.45 pm until 4.05 pm.
Sitting resumed at 4.05 pm
[Mdm Speaker in the Chair]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head V (Ministry of Trade and Industry)","subTitle":null,"sectionType":"OS","content":"[(proc text) Debate in Committee of Supply resumed. (proc text)]
[Mdm Speaker in the Chair]
Mr Liang Eng Hwa (Holland-Bukit Timah): Mdm Chair, I beg to move, \"That the total sum to be allocated for Head V of the Estimates be reduced by $100.\"
Mdm Chair, should we be concerned about the state of our economy? The economy grew by 2% in 2015 and we are expected to grow between 1% and 3% in 2016. So, by the aggregate macro indicators, we grew slower, but we are not in recession. Based on the Ministry of Trade and Industry's (MTI's) forecast for the year, we should not be in recession this year as well. But is this the situation on the ground? Based on sentiment surveys and many other anecdotal observations and feedback, businesses have reflected that times are bad and many are struggling to manage both top and bottom lines. Are we at risk of entering into a recession?
Well, the manufacturing sector is already in recession. It recorded its weakest performance in the last quarter of 2015, with a contraction of 6.7%. This is extending the decline of 6% in the preceding quarter. Manufacturing, which includes electronics and the oil and gas sectors, tends to be more outward-oriented and, hence, are directly exposed to the current weak global demand.
The services sector, which is more domestic-focused, grew at a moderate pace of 2.8% in the last quarter but the sector is faced with supply side constraints and margin squeeze.
The current narrative for the global growth outlook does not look good as well. Just two days ago, the International Monetary Fund (IMF) warned of the loss of growth momentum and frigidity in the global economy. Since the start of the year, uncertainty and downside risks have also increased, the state of China's economy being the foremost concern. If China dropped the ball on its reform to rebalance its economy, we could see a much sharper slowdown in its growth and it will hit us directly and immediately.
On the home front, we are pressing on with restructuring and industry transformation as laid out in the Industry Transformation Roadmap, pending the completion of the review.
Against these forces at play, what is MTI's latest view on the economy this year and whether our economy is resilient enough to cope with the external shocks and the internal restructuring? Does MTI intend to do more to help companies manage the downside risks and uncertainties?
To the credit of MTI and International Enterprise (IE) Singapore, several enhancements to existing schemes were announced last year, such as the Market Readiness Assistance Scheme and the Global Company Partnership Scheme administered by IE Singapore and new schemes, like the International Growth Scheme, amongst others, introduced to help companies which are internationalising.
I would like to hear from the Minister if the schemes have been useful or well taken up by the businesses. For this year's Committee of Supply (COS), would MTI introduce more support for companies, especially small and medium enterprises (SMEs) looking to expand overseas?
Mdm Chair, SMEs are a major pillar of our economy and their activities account for about half of our gross domestic product (GDP). Their continued growth and vibrancy are of utmost importance to achieving our goal of becoming an innovative and value-creating economy. As we restructure the economy, we have to help our SMEs build capabilities, including improving productivity, and seek growth opportunities through internationalising. The risks of SMEs being displaced as we restructure the economy are real. While it is not possible to save any single company from failing, our economic agencies should do their utmost to help the SMEs transform, upgrade and capture new growth opportunities.
Mdm Chair, the advent of disruptive technologies and the emergence of new business models are fast changing the economic order. We are not spared. But then, on the defensive, we should gear ourselves to ride on this wave of change and seize the new opportunities. Obviously, it will require us to reorientate and, more importantly, for the workers to reskill for the new types of jobs to come. Lifelong learning and continuous skills upgrading are the best defence against skills obsolescence and structural unemployment.
SkillsFuture can be the immediate tool available to workers to learn and safeguard workers' employability throughout their work life cycle. But I believe that MTI and its agencies can also work with the industries and companies to leverage the resources offered by SkillsFuture and ensure the skills readiness of our workers. It will require greater horizontal coordination and management attention on the part of the stakeholders involved so that we can achieve the desired state of right jobs, right skills and right match, as articulated by the Minister for Finance yesterday.
Finally, we are all excited about the set-up of the Committee for the Future Economy (CFE) and look forward to the recommendations of the Committee. In this era of fast-paced technological changes and never-ending innovation, it is increasingly challenging to predict product trends or to anticipate what the next big thing would be. In that regard, the CFE has a very tough job. Could the Minister also provide an update on the progress of the CFE so far?
The Chairman: Mr Cedric Foo, you have three cuts. Please take them together.
Mr Cedric Foo Chee Keng (Pioneer): Thank you, Mdm Chair. This is on the Government's criteria which are used when attracting and incentivising inward foreign investments into Singapore.
The Economic Development Board (EDB) was established in the 1960s to assist the newly independent Singapore to create jobs for Singaporeans by attracting foreign investments to our shores. All these years, EDB has done an excellent job, successfully attracting many multinational companies to Singapore and creating many jobs for Singaporeans.
However, today's economic and job considerations for Singapore are very different from past decades. Land is becoming scarcer and there is also a \"social limit\" in the number of foreign workers that Singapore can accommodate. Robotics, automation and offshoring are also replacing workers in many sectors, including jobs held by professionals, managers, executives and technicians (PMETs).
I would, therefore, like to ask the Minister how MTI and EDB will go about addressing such factors as I have described. Most importantly, how would his Ministry seek out or attract companies and industries abroad which will best create jobs with skills requirement that matches what our Institutes of Higher Learning (IHLs) are producing and that are more resilient to automation and offshoring?
If we can do this well, we can then attract the right companies to be based here to provide high-quality and more enduring jobs suited to our local conditions and also the skillsets that Singaporean workers either possess now or those skillsets that our IHLs are producing.
Mdm Chair, next, on the establishment of the ASEAN Economic Community (AEC) as of 31 December last year. The underlying principles of AEC are the free flow of goods, services, investments, capital and skilled labour. Many Singapore businesses are excited about AEC as there will be lower barriers to trade and investments. AEC could also lead to the expansion of financial products and services in the Association of Southeast Asian Nations (ASEAN) region and could benefit Singapore as ASEAN's regional financial hub.
Conversely, there are some views here in Singapore that our workers may not benefit as they will lose jobs as other ASEAN countries attract investments to their shores. Workers here are also concerned about job losses as Singapore companies based here right now may relocate production or services to cheaper and more barrier-free ASEAN countries.
Would the Minister share his views on these common fears and whether or not they are valid? What can Singapore companies and workers do to minimise the negative implications of AEC and to capitalise on the benefits offered by AEC?
I do take note at this point that free-trade agreements are not necessarily a zero-sum game, as Minister Vivian Balakrishnan has spoken about just now.
Third, Madam, is on the Trans-Pacific Partnership (TPP) agreement.
Mdm Chair, the TPP portends to offer many benefits to Singapore and Singaporean workers. On 4 February this year, it was signed by 12 member countries − Singapore, the United States (US), Japan, Malaysia, Vietnam, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. Representing Singapore in Auckland for the TPP signing was Minister Lim Hng Kiang himself, and the Minister had spoken about the benefits to Singapore investors and businesses of a more open, predictable and transparent regional marketplace.
The Minister also noted that the TPP signatories comprise nearly 40% of world trade and account for more than 30% of Singapore's total trade. The leaders of the other TPP members also hailed the agreement, with US President Barack Obama saying that the TPP would give the US an advantage over other leading economies, naming China as one that the US would have advantage over, and it is a trade deal \"that puts American workers first\".
However, in contrast to that view, there are many anti-TPP protesters who blocked streets in Auckland, with protesters indicating their concerns that \"the TPP is less about jobs and more about big businesses and corporate greed\", to borrow their words, and highlighting fears that the TPP was weighted in the US' favour. Yet, on the other hand, various US Presidential candidates have recently threatened not to recommend a ratification of the TPP by the US Congress. If anything, the views are, indeed, very varied and sometimes conflicting.
Can the Minister describe exactly what benefits the TPP will usher in beyond the various free trade agreements and economic partnerships that Singapore currently already has? Is it true that the TPP is weighted in the US' favour and provides less benefits to other countries and Singapore? Most importantly, beyond benefits for corporations, what are the benefits to Singapore workers? There are some, in our midst, who are worried that such free trade agreements may mean that Singapore will open its doors more freely to other professionals coming to Singapore to work. Can the Minister clarify this issue, because I believe that these are quite of concern to many Singaporeans, especially in light of the slowing economy?
Mr Pritam Singh (Aljunied): Mdm Chairperson, I first spoke on the TPP and its impact on Singapore's businesses at the debate on the President's Address in 2014. Then, I had asked the Government to flesh out the opportunities and pitfalls awaiting our local SMEs when the TPP is ratified. I also suggested going at this in a big way, beyond communication with chambers of commerce and business federations, so as to encourage greater entrepreneurship amongst our people.
The TPP is likely to remain on the backburner at least until a new US President is sworn into office. However, the reality of not just TPP, but all future trade agreements should be considered with the launch of SkillsFuture and the national drive towards lifelong learning. Trade agreements are sometimes conceived of as the domain of larger SMEs, multinational corporations (MNCs), tax agents and other specialists.
However, it would be useful if the Government can identify areas of growth and greater access for enterprise under the TPP for Singapore, so that Singaporeans with the passion for enterprise and business can align their careers and skills upgrading plans to reap the benefits of our trade agreements. I hope the Ministry can consider this and, at the very least, organise a webpage or similar public resource for such a purpose.
Assoc Prof Randolph Tan (Nominated Member): Mdm Chair, I would like to speak about Singapore's performance in services trade. The services sector's share of the economy has been rising. In recent quarters, with manufacturing in a recession and shedding jobs, it is the services sector that has held up the economy and prevented it from falling into a full-blown recession.
One increasingly important aspect for the performance of the services sector is its exports. Data from the Department of Statistics show that services export grew by about 200% over the period 2003 to 2013, compared to merchandise exports which only grew about 60% over the same period. This difference shows the potential which the services sector has in the future economy.
Unfortunately, the services trade balance turned negative around the year 2000 and has continued in negative territory for much of the time since. In 2015, services trade performance deteriorated, with growth rates of both exports and imports almost flat. How much of a concern are these developments for the Singapore economy? What is MTI's outlook on the impact that recent agreements, such as the ASEAN Economic Community and the TPP, will have on services trade performance? Will we be able to exploit the opportunities offered by these agreements, specifically, not just to improve merchandise trade, but also services trade?
We have examined the drivers of services export. We find that three areas which contributed quite significantly to the weak balance were telecommunications, computer and information, charges for the use of intellectual property, and research and development (R&D). So, my final question is: are the initiatives for promoting R&D and innovation coordinated with specific strategies to strengthen our trade performances in these areas?
Miss Cheryl Chan Wei Ling (Fengshan): Mdm Chair, businesses are faced with sharpening domestic constraints and grappling with structural transformations. I would like to ask MTI what our strategy is in generating sustainable economic growth and continue creating jobs for Singaporeans.
With dynamism in the economy and growing regional competition, we need to take a multifaceted approach to develop an ecosystem that continuously creates jobs for Singaporeans. As a start, I suggest we need a strategic outlook on what makes up this ecosystem and how to find traction within each of these spaces. Logically, it begins with an end point of what potential industries we can attract or create in and out of Singapore.
As we move up the value chain and innovate within some of the traditional markets or industries, we can identify which we aspire to be in or in becoming a significant representation of. As Mr Cedric Foo has pointed out, EDB has actively scouted for such partnerships in the past and created opportunities for the players to leverage our human capital in Singapore. I think we need to accelerate this search for potential partners once again and create some cohorts of relevant talents in these fields.
With internationalisation, we should view our offices through a global lens. The critical connection between Singaporeans and our work locations should be the people, and not the offices. Our reputable Singapore brand gives us a notch in the international arena, and I think our younger generations should be adventurous in wanting to learn new skills and take opportunities beyond our local shores. It is a different perspective, but one that strengthens our human capital and extends our job horizons over the years.
For more sustainable businesses, especially those in niche areas, it is necessary for us to generate end-to-end support functions in order to thrive. Cost and labour are commonly some of the concerns and would foresee us not being a manufacturer in Singapore for some aspects. But our role in the most critical levers within the ecosystem would be the value that we seek to position ourselves and transform ourselves into.
Dr Tan Wu Meng (Jurong): Mdm Chair, nationally, manufacturing's share of Singapore's nominal GDP has declined from 21.4% in 2010, to 19.8% in 2015. But manufacturing still has a very key role in our economy. We should keep updating and strengthening our manufacturing sector to keep up with global trends: moving up the value chain and, especially, building and providing products to the world that other global cities are not able to or which would have difficulty matching us.
This seems a big aspiration, but it is also something that could bring us strategic value. Because high-end manufacturing supports an ecosystem of jobs and services, such as engineers and skilled workers, and many sectors that support innovation and technology that support the communities nearby.
We must also continue building a Singaporean Core with the necessary skills. SkillsFuture has great potential here as it helps get Singaporeans ready for the jobs of tomorrow. But what about the industries of tomorrow, Mdm Chair?
In 2013, the McKinsey Global Institute published a report on disruptive technologies – an important global trend. Technologies, such as: (a) additive manufacturing, 3D printing, which is going to disrupt supply chains around the world, because once it becomes easier to 3D print a part in the same town, you may not have to import it from further away; (b) cloud computing, which is going to disrupt the traditional market for local computer resources if you can use a cloud computer; (c) multi-touch interfaces that are disrupting the keyboard, mice and traditional input devices; and (d) automated knowledge work with intelligent assistants that can understand queries in natural language, whether it is the iPhone's Siri or the Cortana product that Microsoft has been working on. They may not have invented a Jarvis yet, but we can see these disrupting what is the work of a traditional personal assistant.
The McKinsey report mentions one key learning point which is very important to Singapore in my view: we maximise value creation when multiple disruptive technologies come together. Because when you put multi-touch screens, intelligent assistants, cloud computing together, you get something very similar to the iPhone or a Samsung smartphone. So, each technology could be an industry on its own, but it is together, when they converge, that they create transformative new markets.
As we prepare for the future economy, we can position Singapore this way, bringing multiple innovations together; not just a hub, but a hub of hubs. Research is not just an ivory tower. Research can improve the lives of people. It can touch people from all walks of life. When recombinant DNA technology was invented many years ago, people thought it was an ivory tower invention. Yet, today, it is fundamental to so many medical treatments, including the insulin injections that many diabetic patients rely on.
We should also incentivise companies to invest for the long term. Clayton Christensen has written about \"The Capitalist's Dilemma\": short-term shareholders seeking short-term results. This affects R&D investment. So, we should look at ways to encourage long-term investing, perhaps by aligning shareholder influence with shareholder duration. I look forward to the Ministry's inputs.
Mr Yee Chia Hsing (Chua Chu Kang): Mdm Chair, our manufacturing sector's share of GDP has declined over the past few years. Last year, notwithstanding that GDP for the whole economy has increased by 2%, the manufacturing sector has contracted by 5.2%. The three sectors which have shown the highest growth rates are: (a) wholesale and retail trade, (b) finance and insurance and (c) information and communication.
Given that Singapore has progressed to be a more services-oriented economy, I would like to ask what is the Government's view on the importance of manufacturing to Singapore's economy and what is our approach towards developing and helping the manufacturing sector. In the face of intensifying competition from the region, how can we help key manufacturing sectors transform, innovate, grow and compete globally?
Ms Sun Xueling (Pasir Ris-Punggol): SMEs face developmental issues due to lack of resources and little access to information. I would like to discuss two areas where we can work with trade associations and chambers (TACs) to help our SMEs.
Firstly, on the demand side. The use of big data in business is increasingly prevalent and will become de rigueur. Big data can be used to predict footfall of customers at different times of the day, types of customers that frequent shops, time spent comparing products and even time spent at different parts of a store. With such knowledge, retailers can play with product mix, price elasticity and store layout to maximise revenue.
With big data analysis, their ability to understand, predict and even direct customer behaviour will only increase. How do we enable our SMEs to have access to the same information? Can we work with TACs and IHLs to do big data analysis on consumer behaviour and make available the analysis and public data banks so that our SMEs can leverage them to optimise their offerings and compete effectively?
Secondly, on the supply side, research institutes and large food and beverage (F&B) companies invest in research, innovative packaging to extend the shelf life of food products. Proper control of heat and choice of wrapper can increase the shelf life of products by 40% and also provide consumers reheating and microwavable options. This helps save cost for companies with respect to refrigeration, reduces spoilage during transformation, and increase marketability of products. Can we work with our TACs to keep our SMEs abreast of the packaging technology being researched on and provide them access to technology?
Assoc Prof Randolph Tan: Mdm Chair, the Industry Transformation Programme is a significant addition to the economic landscape in Singapore. It is meant to push for change in the entire industry by working hand in hand with stakeholders at the organisational level. It could turn out to be the type of penetrating approach which is needed to overcome resistance to transformation at the industry and firm level.
Similar, though not identical, industry-level schemes have worked elsewhere. Nonetheless, I have some basic questions about whether overcoming a natural instinct of businesses to view businesses as competitors is possible and, even if it were possible, would it be worth the cost.
Improving the degree of industry-level coordination is key to the Industry Transformation Programme. Previous efforts, such as the Local Enterprise and Association Development (LEAD) programme, have shown what the potential challenges could be. In his Budget round-up speech, the Finance Minister yesterday gave the assurance that anti-competitive practices will not be allowed to creep in.
At the other end of the spectrum, there are also coordination challenges. Is industry-level coordination capable of producing a level of cooperation that can be balanced against the natural competitive instinct? As part of an open market economy, will the potential contradictions in seeking to coordinate entities which are supposed to be natural market-oriented competitors take an excessively heavy toll on the coordinating teams?
I understand that these coordinating teams will be formed from public servants from various agencies. So, will the coordination roles of these public servants result in public service agencies and personnel incurring heavy costs on resources? And would it end up impacting the work of the Government?
Finally, how will such industry-level planning for transformation mesh with sectoral manpower planning?
The Chairman: Mr Henry Kwek, you have two cuts, please take them together.
Mr Kwek Hian Chuan Henry (Nee Soon): Mdm Chair, thank you for letting me take the two cuts together. My first cut is on the Industry Transformation Programme.
The Ministry of Finance (MOF) has announced the Industry Transformation Programme. As I have mentioned in my Budget speech, this is a bold and necessary move, one that will take Singapore into the next phase of economic development. For the public's benefits, can MTI share how this new approach is different from the current approach and how our sectors and companies will benefit?
During the recent debate on the President's Address, I shared my concerns that we must strengthen our startup ecosystem. Our outward-facing mainstream economy is facing intense global competition and we must quickly transit into the future economy as startups play an increasingly prominent role. What is the progress of the Government's efforts to develop a startup ecosystem and does the Government plan to do more to support the growth of startups in Singapore? I look forward to hearing MTI's views on this matter.
Mr Azmoon Ahmad (Nominated Member): Mdm Chair, good afternoon. Thank you very much for giving me the time to speak. I am speaking about startups. Startups are like babies, so, I call them the babies of the industry.
I read an article which sums up the outcome of the Forbes Under 30 Summit in Tel Aviv held recently, which discussed the experiences and lessons learnt on startup companies, amongst many things. It was noted that many startup companies fail, not because they had bad or good ideas, but mainly due to the process of execution. The mistakes the companies made were that they are too focused on the big picture, the big idea and even the product itself and the broad concept. What they missed is spending time on turning the business plan into a thriving business. As the saying goes, \"The devil always lies in the details\".
In Singapore, we can see a growing number of startups recently, especially in the high-tech domain. I believe it is a positive trend and I also believe they need a lot of support. Apart from having a good idea and the will to venture and start his or her own company, these budding entrepreneurs should also be guided in execution of their business plan. In this light, start-ups can also learn from industry professionals who have the experience and knowledge in turning business plans into desired results.
Vice versa, we should also encourage industry professionals, companies and other voluntary organisations to come forward, participate and contribute to this new and growing trend. The knowledge transfer from one to the other will not only benefit the startup, but also the nation at large. With this, we can start an ecosystem where a buddy-and-mentor relationship can be forged within the startup.
So, my question here, Ministers, is: will the Ministry be willing to consider and provide incentives to professionals, companies and voluntary organisations which are willing to come forward to guide and mentor these budding entrepreneurs and technopreneurs?
Mr Leon Perera (Non-Constituency Member): Mdm Chairperson, there are a number of Government loan risk-sharing schemes. Budget 2016 has set up a new working capital loan scheme with 50% risk-sharing. I would like to ask: is there any evidence the Government can cite and, if not, can a study be done to assess if, indeed, these loan schemes are effective in inducing banks to lend to SMEs, when they otherwise would not?
Even partial risk-sharing is still a risk to the bank. And when there are other options for the banks to use their capital, such as lending to large corporates, risk-sharing may not be enough.
I have heard from some SMEs that even if the bank has to bear less than 50% of the risk, many banks still behave as if that is a significant risk. When applying for loans, many SMEs, even fairly large ones, still face high interest rates, small quantums, requests for personal security guarantees, or outright rejection on grounds, such as inconsistent revenues.
Is there any survey evidence to suggest that SMEs feel that they are out of the woods in terms of access to finance? There would not appear to be any. In fact, the reverse is true. In a Singapore Business Federation (SBF)-DP Info survey last year, the index measuring expectations for access to financing fell to its lowest levels since 2013. The low-risk appetite of banks and lack of credit information on SMEs could be one cause.
In Germany and Japan, countries with vibrant SMEs, links between regional banks and regional companies are critical to ensure access to capital. Other countries also have Export-Import (EXIM) banks suggested by the Economics Strategies Committee in 2010. An EXIM bank with a clear mandate could have provided finance to SMEs to tap on the regional market of over three billion people to grow and become competitive.
The Workers' Party has, in the past, called for the EXIM bank idea to be reexamined with a focus on SMEs. Access to capital is an issue that warrants both fact-based analysis and review of counter measures, including the EXIM bank idea, if our SMEs, which account for two-thirds of employment, are to maintain and create jobs for Singaporeans.
Ms Foo Mee Har (West Coast): Mdm Chair, the Government recently announced the new plans for our $19 billion Research, Innovation and Enterprise (RIE)2020 effort. It is vital that we maximise our returns from our R&D spend, a critical investment that takes a significant share of our budget expenditure even as our fiscal position gets tighter.
I support the Government's sharpened focus on growing our capabilities in research translation, innovation and facilitating startups, so that research and innovation can be applied to our economic and social needs.
Germany has a robust system of applying R&D to drive innovations in their businesses. One factor that facilitates this is the practice where professors at German universities often hold concurrent appointments overseeing R&D at industry groups, allowing for seamless testing and implementation of research initiatives. I would like to ask the Minister how our future approach to R&D will differ from those of the past. How will the Government support linkages across R&D value chains to bring technology inventions from the laboratories into our industries and grow strong industry clusters?
Madam, I am heartened to read in The Business Times that SMEs' 2014 R&D expenditure surged 38% to $800 million. I would like to ask the Minister what percentage of the $800 million is a function of Government support and whether such expenditure translates to an increase in competitiveness and productivity.
I would also like to ask the Minister for his insights on the performance of R&D in the various sectors and how such insights will help guide future Government funding support, including how SMEs can tap on the RIE2020 to drive innovation and scale up their businesses.
Ms Chia Yong Yong (Nominated Member): Mdm Chair, during the debate on the Budget Statement, I urged hon Members that we should consciously work towards owning intellectual property (IP) rights arising from innovation. At the very least, we should own IP rights which are of strategic value to Singapore.
My point was simple: without ownership, we do not have the liberty to own, use and exploit such IP for Singapore. If ownership flows out of Singapore, we not only lose the opportunity for value creation, growth and revenue, we run the risk of being rendered obsolete. We must, therefore, have safeguards against the inadvertent use of our funds and resources to equip our competitors.
Mdm Chair, lest I be misunderstood, I wholly support research collaboration, including collaborations with non-Singaporean entities. There is much that we can learn and benefit from such collaborations. I understand there has to be give-and-take. All I am saying is that in giving and taking, we must know what we want to take for what we are willing to give.
Why this on and on about ownership? Because it is intimately and ultimately affecting the flow-through from our research, the flow-through to Singapore, which is why I would like to know the requirements in place, or the requirements that will be in place, to ensure that Singapore's rights to IP created through its funding are adequately secured. I would like to know the Government's requirements in the retention of valuable foreground IP to benefit Singapore and to be commercialised by Singapore entities.
Here, I would like to clarify that when I refer to Singapore, I am not referring to the Government alone. I am not arguing that all IP rights must be owned by the Singapore Government, but rather that the IP rights must be owned within Singapore, whether it is the Government, industry, enterprise or individuals. Of course, I would also prefer very much that grantees of Government funds for purposes of research and innovation would use the IP that they own and grant licences to the Government for national applications.
Economic impact and community impact – we have a lot of talk about that. We need to know what the measurable outcomes should be – long-term, mid-term, short-term, tangible, intangible. Therefore, I would like to know the guidelines and principles, applied and to be applied in the settings of key performance indicators (KPIs). Who determines such KPIs? I would also request to know what the consequences of not meeting KPIs may be.
Last, but not least, I would be grateful if the Minister could comment on the structured framework suggested in my speech during the debate, that is, for the larger involvement of industry as client, rather than feedback provider, and as IP owner and recipient of research grants.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mdm Chairman, the Government has announced the new plans for our $19 billion RIE2020 effort. So my question is: has Budget 2016 already incorporated the fact that companies, especially SMEs, have the possibility of leveraging on RIE2020 to innovate and create value?
I wish to highlight the importance that R&D can play for SMEs. In the case of Japan, with its shrinking workforce, we have witnessed how crucial R&D has been for not only sustaining the workforce with innovations to boost productivity, but also inventing new technologies that are admired and sold worldwide.
As a small country, we have limited manpower and natural resources. Other countries with more resources are always going to do better when it comes to mainstream products and services. Our SMEs must rise above the crowd with unique selling points and innovative products and services, and that can only be achieved through R&D. But R&D may be costly and may not be easily accessible for some.
I would like to propose that SMEs be encouraged to tap on R&D more prevalently. Some measures could include giving them easier access to R&D institutes, polytechnic research units and usage of unused IP technology so that they can enhance their business, and to conduct laboratory tests, for example, at lower costs at our research institutes or polytechnics.
Mr Leon Perera: Mdm Chairperson, the National Robotics Plan is one of the initiatives in Budget 2016. I would like to speak about social robots, which are robots designed for human interaction, company and assistance.
Social robotics is now a recognised field that has spawned industry conferences, global collaboration and much investment. I am aware that social robotics is far from new to Singapore. Late last year, the Nanyang Technological University (NTU) unveiled Nadine, a life-size robot. A*Star Social Robotics Laboratory was launched in 2008. The National University of Singapore and other institutes have social robotics programmes but, to the best of my knowledge, Singapore has yet to bring to market a commercially successful social robot product to compete with, for example, Pepper, the iconic social robot from Japan, which is now selling around 1,000 units per month, even though it is not Jarvis.
Mdm Chairperson, I wish to speak about the relevance of social robotics to two fields in Singapore where we are facing growing needs and which can provide test beds for new products: our eldercare and our preschool sectors.
In the eldercare space, I must stress that social robots should never replace genuine and loving human contact from family, friends and caregivers. Having said that, social robots could be designed to interact with older Singaporeans in various languages. They can also monitor vital signs, help dispense medicine, answer questions verbally, help connect phone calls, obtain emergency help and so on.
In the preschool space, social robots could complement the vital role of teachers in the classroom and provide an amusing and engaging way for children to learn and also receive classroom assistance. This might help raise the productivity and effectiveness of our preschool teachers. An example is KASPAR, a social robot designed by the University of Hertfordshire in the United Kingdom (UK) to help children with autism learn responses from the robot through games and interactive play.
Even though the Japanese seem to have a lead in this space, Mdm Chairperson, Singapore is well-placed to prototype and test bed social robots for the eldercare and preschool markets in Asia, given the Asian multi-ethnic and multilingual nature of our society. I hope this is an area that can receive attention from policymakers and be a subject of collaboration between local enterprises and the R&D sector.
The Chairman: Mr Low Thia Khiang, you have three cuts. Please take them together.
Mr Low Thia Khiang (Aljunied): Madam, in 2010, MTI published the results from their Nuclear Feasibility Study. In it, they recommended that nuclear energy was currently not yet suitable for Singapore, but that we needed to \"keep our options open for the future\".
Both Indonesia and Vietnam have mooted plans to build nuclear power plants. If Indonesia builds a nuclear power plant, there is always a possibility that an earthquake could cause a disaster on the scale of Fukushima and the weather patterns and ocean currents would bring the nuclear fallout to Singapore. Even without natural disasters, a nuclear plant located anywhere in the region would produce a large amount of nuclear waste that would need to be disposed of.
This waste is significantly radioactive and would take tens of thousands of years to be rendered safe. Extremely stringent security must be in place to ensure that this waste does not fall into the hands of terrorists. The waste can be used to make a so-called \"dirty\" bomb, which would be a very effective weapon of terror. Is Singapore prepared for such a risk?
This is not a remote threat, as Prime Minister Lee has revealed at the Nuclear Security Summit in Washington that Singapore authorities have intercepted a cargo with nuclear material. It is good to know that the Government has tightened its export control regime, upgraded radiation-screening technology at the ports and is building a border laboratory.
The National Research Foundation created a five-year programme in 2014 to conduct research and education into nuclear safety, science and engineering. It aims to train about 10 people a year to produce about 100 nuclear experts at the end of 10 years. However, in two years of operation, the research programme has only managed to train nine people, which is fewer than the target. Could the Government give an update on the progress of the programme and the results?
Madam, Singapore is dependent on foreign imports for its energy needs. Over the years we have reduced our dependency on oil and have increased our use of natural gas for power generation, from 74.4% in 2005 to 95.5% in 2015.
While gas-fired plants are among the most efficient and gas is the cleanest fossil fuel, with more countries importing liquefied natural gas (LNG), we are going to face more competition for LNG sources. This heavy dependency on natural gas opens us to risks of spikes in prices and disruption of supplies. In the medium to long term, what is the status of other energy options that we are looking at to further diversify our energy mix to improve our energy security?
The ASEAN Power Grid (APG) has been mooted in 1997 under the ASEAN Vision 2020 towards ensuring regional energy security while promoting the efficient utilisation and sharing of resources. Would we be able to tap on these energy resources under the programme? What is the current status of the APG project?
Currently, electricity tariffs are calculated based on fuel oil prices. In the past, when the rationale for linking our electricity tariffs to fuel oil prices was that there was no distinct market in Asia for the price of natural gas, hence, indexing its price to fuel oil prices is the next best alternative.
Earlier this year, the Singapore Exchange (SGX) started up a new index for LNG known as SLInG, which provides an industry pricing benchmark. Should we consider now factoring in the LNG Price Index in our formula for electricity tariffs to better reflect the actual costs of power generation?
Madam, in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Singapore has progressively opened the retail electricity market since 2001. As at today, there are 890,000 users who can choose their own electricity suppliers, ranging from large-scale plants to small shops.
The Energy Market Authority (EMA) launched the Electricity Vending System as early as 2007. In 2010, EMA launched a trial of the Intelligent Energy System, and in 2012, it rolled out Phase 2 of the trial in Punggol New Town.
During the COS debate in 2013, Ms Sylvia Lim had enquired about the above trial. She had asked if there are plans to fully liberalise the retail electricity market in the near term. At that time, the Minister only elaborated on the sophisticated technology involved, but did not reveal the results of the trial and the operation of the system.
Mr Iswaran, Minister for Trade, announced last October that Singapore's retail electricity market will be fully liberalised in the second half of 2018. This will allow the remaining 1.3 million users, who are primarily domestic home users, to have the flexibility to choose a supplier according to their electricity usage habits. They will be able to choose the electricity price package, just like choosing a mobile phone service package.
The full liberalisation of the market in 2018 may be good for the domestic users. However, if they do not understand how the retail electricity market operates, they may not be able to choose a price package that will help them save on their electricity bills.
I would like to ask the Minister, if there are any plans to help the public understand the full liberalisation of the electricity market. As this change will impact our entire population, does the Government have any plans to kick-start the publicity campaign earlier, so that people have enough time to digest the news?
The difference between domestic users and commercial users is that one may need to communicate with domestic users in a language other than English. Are authorities well-prepared to roll out the publicity in different languages?
Mr Louis Ng Kok Kwang (Nee Soon): Madam, as a small, resource-constrained island, we import almost all our energy needs. Therefore, it is important that we plan ahead and find more sustainable ways to cater to our energy consumption. We also need to find more environmentally friendly ways.
However, due to various technical issues with different forms of renewable energy resources, we can only really rely on solar power. It is estimated that by 2030, we could potentially be tapping on renewable energy to contribute up to 8% of Singapore's peak electricity demand. In addition to our focus on research to improve the performance of solar systems, what further steps are we taking to reach our renewable energy goals?
The Minister for Trade and Industry (Trade) (Mr Lim Hng Kiang): Mdm Chair, I would like to thank Members for their comments and suggestions.
Mr Liang Eng Hwa asked about the global economic outlook and the implications for Singapore's economy. The global economic recovery has been weaker than expected and the IMF has again downgraded its global growth forecasts. It has done so almost every year since the Global Financial Crisis. We are now in a paradigm of slower growth, compared to the previous decade. Meanwhile, there are significant global rebalancing forces that must work themselves through over the next three to five years.
First, the key developed economies have been implementing loose monetary policy through measures, such as quantitative easing and low interest rates, in an attempt to revive their economies. Some of them have even introduced negative interest rates. This is unsustainable in the long run and these economies will have to normalise their monetary policies at some point. As the monetary policies normalise, it will affect financial and currency markets as well as capital flows around the world, especially in emerging economies.
Second, the reforms in China are creating a \"new normal\". Besides rebalancing towards consumption and services-led growth, China has also been increasingly in-sourcing the intermediate goods and services required to produce its manufacturing output, rather than importing them. While China is making this transition, the countries which trade with China will also be affected because supply chains will have to adjust. In Singapore, we will need to find new growth niches in order to remain relevant as China makes its adjustments.
Third, in commodity markets, there has been an oversupply of oil in the global market due to over-investment, leading to a sharp drop in oil prices. With growth in global oil demand expected to remain weak, further adjustments in global oil supply will have to be made. As a result, there may be continued uncertainties surrounding oil prices.
In addition, we will face structural adjustments domestically because of our demographics and ageing population. The local workforce will continue to grow, but at a slower rate than before as more Baby Boomers approach retirement age. Overall workforce growth will be around 1%-2% per annum for the rest of the decade. While all sectors will have to adjust to the tighter supply of labour, labour-intensive services sectors, such as food services, will likely be more adversely affected.
The factors above point to an uncertain economic environment for the next few years. Against this backdrop, we expect Singapore's economic growth to remain modest between 1% and 3% this year. When we are on a slow growth trajectory of 1%-3%, some sectors will grow more strongly than the 1%-3% range and some sectors will be below the 1%-3% range. As Mr Liang Eng Hwa observed, this means that, for some sectors, they are contracting and feel like they are in a recession. This is one of the consequences of a low-growth trajectory. And that is why we are also addressing the challenges at the sectoral level.
Given the current global economic outlook, Mr Liang asked how the Government will help companies ride through this difficult period. We recognise that companies are facing headwinds. The Government is watching the situation very closely and we are prepared to take further action, if necessary. We remain committed to working with companies to overcome these challenges. Let me highlight a few key initiatives.
First, given the tightening credit situation, we are introducing measures, such as the SME Working Capital Loan. This will allow SMEs to access unsecured working capital of up to S$300,000 to complement existing financing schemes to support viable SMEs. Mr Leon Perera asked whether the loan scheme would sufficiently incentivise the banks to extend loans when they otherwise would not. As the Government will co-share 50% of the default risk of the loan portfolio with the participating financial institutions, we expect this to catalyse approximately $2 billion of total loans to companies over the next three years.
The second broad thrust is to provide more support to help companies restructure and transform as well as develop critical capabilities. One way is through the Automation Support Package, which can help companies to improve their productivity by scaling up through automation adoption.
The third broad thrust is through the provision of infrastructure. The needs of the different sectors are quite diverse. JTC has, therefore, developed a pipeline of innovative developments for the various sectors to better cater to their different needs. Some of the facilities that will be ready this year include Aviation Two @ Seletar Aerospace Park, Chemicals Hub @ Tuas South, Space @ Gul and Space @ Tampines North. Others, like the Food Hub @ Senoko, Furniture Hub @ Sungei Kadut and Logistics Hub @ Gul, will be ready in the next few years, and were developed together with the trade associations and companies to ensure that they meet the specific needs of these sectors. Companies should, therefore, take this opportunity to consider regrouping and consolidating their space and land requirements, and leverage these new facilities to achieve better operational efficiency and higher productivity.
Such transformation will require deep partnerships between the Government and industry, and among the industry players to develop a more competitive sectoral response. We recognise that implementation is key. TACs can do more and, in fact, they want to do more, but are constrained by their limited resources. This is why we are introducing a new LEAD+ programme, which will help TACs to strengthen in-house capabilities in four ways.
First, strengthen leadership within TACs, such as through consultancy support for strategic plan development.
Second, build capability in TAC secretariats, including training to manage corporate functions. The Government is also prepared to second up to 20 Public Service officers over the next five years to TACs under this LEAD+ programme.
Third, develop robust processes, particularly in the areas of human resource, information technology and finance, and enhance their branding of TACs.
Fourth, enhance TACs' ability to provide services to companies, such as market research and technology mapping.
Apart from strengthening TACs' capabilities, we will also partner TACs to drive 30 Collaborative Industry Projects (TAC-CIP) over the next three years. TACs will source for bottom-up, scalable solutions to industry-specific productivity and innovation needs. We expect this programme to benefit over 3,000 SMEs.
For example, the Waste Management and Recycling Association Singapore (WMRAS) led a project to encourage the mass adoption of automated canvas covers for the trucks used in waste collection. A total of six service providers were engaged to pilot this adoption for 39 companies in the waste management industry. Expected outcomes include a 25% increase in productivity of each truck, improvement in working conditions and, therefore, manpower retention, as well as improvement in workplace safety. Minister of State Koh Poh Koon will elaborate on our partnership with TACs when he responds on the segment on SMEs.
Mdm Chair, as we stay the course on economic restructuring, we will continue to ensure that Singapore remains open and attractive to foreign investments. Mr Cedric Foo asked about our foreign investment attraction strategy. We have adopted a targeted approach towards attracting foreign investments that take into account our competitive advantage, growth opportunities as well as constraints in manpower, land and planned international commitments on carbon emissions.
For example, we will continue to pursue opportunities arising from growth drivers, including the rise of consumerism and urbanisation in Asia. Our investments in advanced manufacturing capabilities, such as robotics, 3D printing and digital manufacturing, will also position our manufacturing sector well for the future. More importantly, our efforts must translate into good job opportunities for Singaporeans. We have a comprehensive suite of manpower development initiatives, in partnership with the industry and the Institutes of Higher Learning (IHLs), to ensure that our workforce has the right skillsets to take up the new jobs that have been created. Parliamentary Secretary Low Yen Ling will elaborate on this later.
Beyond attracting companies to Singapore, we are also working to establish stronger trade linkages to support Singapore companies looking to expand overseas. Assoc Prof Randolph Tan asked about our 2015 services trade performance and the opportunities from the AEC as well as TPP.
While our services trade balance is, indeed, negative, the deficit has generally narrowed over the past 10 years. In fact, over the period 2010 to 2014, our services exports have actually recorded robust growth of 8.6% on a compound annual growth rate (CAGR) basis and continue to be a good engine of growth. The slowdown in Singapore's services export growth in 2015 was in line with the weakening global trade environment. Nevertheless, amidst this slowdown, we observed that export growth in the financial services as well as telecommunications, computer and information services sectors remained healthy.
Over the longer term, the outlook for these services sectors remains promising, given the rise of the middle class and urbanisation in regional economies like ASEAN. Specifically, AEC and TPP will provide opportunities for us to expand the reach of Singapore's services exports and facilitate services trade flows to our major services export markets.
Mr Cedric Foo and Mr Pritam Singh asked about the benefits of AEC and TPP to Singaporeans and Singapore companies. AEC will benefit Singapore companies over a broad spectrum of sectors. Virtually all goods now flow throughout the ASEAN region tariff-free. This allows our businesses to trade and gain market access into the region while bearing practically zero customs duties. Restrictions have also been eased in at least 80 services sectors. ASEAN countries now allow majority foreign ownership in many sectors. Along with ASEAN's commitments to facilitate, promote, protect and liberalise cross-border investments, Singapore companies can now venture into the region at lower costs and with greater investment protection.
The engineering services sector provides a useful example of how our companies can benefit from AEC. Singapore companies can now own a 100% stake in Indonesia's engineering design and advisory services, as well as in Myanmar's engineering and construction services sectors. Our companies can also benefit from legally-binding guarantees of preferential services market access in the ASEAN region.
Mdm Chair, regional integration is critical in strengthening Singapore's value proposition as a gateway into Southeast Asia. The tighter the regional integration, the stronger our value proposition as a gateway to ASEAN. Therefore, as a small country, Singapore must adopt an inclusionary approach towards trade agreements. This is why we are a founding member of key trade agreements like the Regional Comprehensive Economic Partnership (RCEP), TPP and the eventual Free Trade Area of the Asia Pacific (FTAAP). Being part of such agreements allows us to influence the rules of engagement and, where possible, enables us to enhance demand of manufactured goods and services from Singapore.
Regional trade deals like the TPP enable us to improve our market access beyond what we already have under our bilateral trade agreements. For example, despite the fact that we have the US-Singapore FTA (USSFTA), few of our automotive parts manufacturers would export to the US today. This is because the US also has the North American Free Trade Agreement (NAFTA), which has created a very competitive automotive supply chain amongst the US, Canada and Mexico. However, when the TPP enters into force, Singapore will have direct access to all the NAFTA markets and, because the rules are applied commonly to all TPP countries, Singapore automotive parts manufacturers may become a competitive supplier of auto parts to TPP countries over time.
In other sectors, such as textiles, our companies, likewise, have difficulties utilising the US-Singapore FTA to enter the US market at a preferential rate, because too little of the raw materials are being produced in Singapore. With the TPP, however, more of the raw materials that we process will count towards being \"TPP or Singapore made\". Our garment manufacturers can, therefore, look forward to sourcing more competitively from the TPP region and focus on keeping the high-value aspects of production in Singapore, knowing that their exports will now enjoy a comparative advantage because of this \"regional cumulation\" effect. This is a very significant development, especially for our SMEs in the textile and garment sector.
MTI has been actively engaging businesses on the benefits of the TPP through platforms such as the recent SME Convention 2016. We will work closely with our TACs and our economic agencies will develop more sector-specific outreach sessions.
Mdm Chair, agreements like AEC, RCEP and TPP will enhance the competitiveness of our companies as well as our workers, and support the creation of good jobs for Singaporeans. The SkillsFuture movement will prepare Singaporeans to take advantage of the evolving job landscape and opportunities provided by these regional economic integration efforts. Specific sector plans will be targeted at upskilling workers in both the traditional areas, such as retail, as well as the emerging areas, such as finance technology, or Fintech. MTI is one of the key agencies supporting SkillsFuture and we will continue to work with the various Government agencies to support our companies and workers.
Mdm Chair, we can confidently address the regional and global challenges facing us because Singapore has a strong foundation from which to work from. This includes our strong legal and physical infrastructure, our well-diversified economy and an educated workforce. We need to build on these strengths and continue to implement measures to stay competitive. That is why it is timely to reiterate the key principles that will continue to remain relevant in the years to come.
First of all, as a small economy, we must remain open and connected to grow the external wing of our economy. Our external economy can continue to contribute significantly to our GDP and good jobs. So, we must look at opportunities that lie beyond our shores in markets, such as ASEAN and beyond.
Second, we need to leverage the small size of our economy to our advantage and be more nimble, adaptable and flexible. We must adapt to changes brought about by the rebalancing of the global economy. We cannot simply remain business-as-usual and we cannot be afraid of change, or we will be left behind.
Third, we need to leverage key trends and our strengths to develop growth areas that can create value, and invest in future growth engines to spur our economy. We must prepare ourselves for the future and the Committee on the Future Economy was, therefore, established to leverage these opportunities.
Mdm Chair, through these efforts, we will ensure that Singaporeans will continue to benefit from our economic growth. As the global economy rebalances, we will continue to work with businesses to stay the course on economic transformation and ensure that Singapore remains attractive to foreign investments. Our economic growth strategies will enable us to seize regional as well as global opportunities to create more value. Together, we can continue to create good jobs for Singaporeans and ensure that we are well-positioned for the future.
The Chairman:\tMinister Iswaran.
The Minister for Trade and Industry (Industry) (Mr S Iswaran): Mdm Chairperson, I thank all the Members who have spoken on our industry development strategy. They have raised a wide range of questions which I will now endeavour to address.
Miss Cheryl Chan has asked about our strategy to generate sustainable economic growth and create good jobs for Singaporeans. This, in fact, is the focus of CFE, which Mr Liang Eng Hwa enquired about.
Madam, the CFE is the latest in our continued effort to look ahead and prepare for longer-term challenges and structural changes, even as we manage some of the short-term cyclical challenges in our economy. We have done so previously with the Economic Review Committee in 2001; and the Economic Strategies Committee in 2009. And this resolute focus on the long term has really been our hallmark, you could say even our competitive advantage, in the way we have worked on the economy.
In consultation with industry leaders, the CFE is studying the trends that will underpin the next wave of growth markets and sectors. And it is a national effort to understand the threats and opportunities these trends present, and what we need, in this next phase, in terms of corporate capabilities, connectivity, infrastructure and skills so that we can sustain our economy well into the future.
Madam, changes in global trade patterns, market integration that Minister Lim has talked about and also new technologies and novel business models that Mr Liang and Ms Sun Xueling referred to, these are some of the forces that are reshaping the global economic environment. They are disrupting industry structures and value chains and also changing the nature of jobs.
China's in-sourcing of intermediate goods and services, similar trends in the US in terms of re-shoring, will have a major impact on distributed manufacturing networks and cross-border supply chains. Meanwhile, India, ASEAN and other emerging markets have a growing middle class that is demanding more and sophisticated products and services.
New technologies are blurring traditional industry boundaries and creating hybrid sectors like Fintech. They transform existing industries. For example, if you look at 3D printing and advanced robotics, they can revolutionise manufacturing. Many Members have talked about it. The impact is in terms of rapid prototyping, optimised design and vastly improved efficiencies.
Digital technologies, such as big data, Internet-of-Things (IoT), artificial intelligence, and Cloud, these enable innovation and new business models to access markets and address evolving preferences of consumers anywhere in the world at any time. For example, e-commerce is transforming retail. In fact, there is an article on this today in The Straits Times, with big data and predictive analytics allowing retailers to better target customers in whichever market.
These changes, coupled with our domestic constraints, affect different sectors differently. An enterprise level response, while necessary, is not sufficient, given the nature and the scale of these challenges. So, we need broader sector-focused strategies that systematically harness innovation, talent development and partnerships, to sustain the competitiveness and growth of our economy and industries. And that is the essential thrust of the Industry Transformation Programme.
So, how will we do this? I want to illustrate using the manufacturing sector. Dr Tan Wu Meng commented on its strategic value and Mr Yee Chia Hsing asked for the Government's view on its importance.
Madam, the manufacturing sector is a key pillar of our economy that accounts for nearly 20% of nominal GDP in 2015. Though that is slightly lower than in 2010, largely due to the relatively faster growth of financial and insurance services, amongst others, the real value-added of the manufacturing sector, in fact, increased by $4.6 billion over the same period. That is a compound annual growth rate of about 1.4%. Some commented on the decline last year. But that was due to the impact on one or two particular sectors, especially offshore and marine, due to the oil-related impact.
Manufacturing productivity is also higher and has grown faster than the overall economy. From 2009 to 2015, the real value-added per actual hour worked in the sector grew by 6.1% per annum, higher than the 2.7% which is for the overall economy.
And manufacturing, which employs more than half a million people, continues to provide good jobs not just in the sector alone, but in related areas like R&D, after-sales services and distribution. In 2015, more than 60% – six out of 10 – of the resident workers in the sector were in skilled jobs. This is higher again than the overall economy. Median wages in the manufacturing sector are also higher than that for the overall economy.
In addition, the sector generates healthy spillover benefits for the rest of the economy, through its wide range of industry inter-linkages. Based on MTI's estimates, a $1 billion increase in manufacturing value-added due to an increase in final demand will generate about $300 million of value-added and 2,400 jobs in the rest of the economy. So, the spillover impact is substantial. For all these reasons, manufacturing remains important to our economy.
But the nature of manufacturing is changing and we must undertake several measures to ensure that the sector is well-positioned for the future. Let me talk about some of those measures.
First, we want to invest in advanced manufacturing technologies, such as additive manufacturing and robotics, and also promote their adoption across different verticals. The global robotics industry is projected to grow from about US$27 billion last year to about US$80 billion in 2025. To seize this opportunity, we will invest over $450 million through the National Robotics Programme (NRP) in the end-to-end development of robotics technology. This will include public-private partnerships among research institutions, companies and public agencies, to pilot robotics technology applications across various industries.
We will support the mass adoption of robotics across sectors to drive productivity. In fact, EDB and the Standards, Productivity and Innovation Board (SPRING) are working with technology partners and system integrators locally to develop standardised and scalable modular robotics solutions. This will allow SMEs to mix and match these modules to suit their needs and, importantly, the cost of adoption can also be reduced by about 50%. These are important upfront work that we need to do in order to not just come up with solutions, but encourage its adoption.
Mr Leon Perera would be interested to note that there are potential robotics applications in the services sector that are currently being worked on in Singapore to automate manual tasks, raise productivity and address manpower challenges. In eldercare, the use of assistive technology can ease the burden on healthcare professionals and caregivers, and nursing homes, such as Peacehaven, are already exploring possible applications. Similarly, with the Singapore Tourism Board's (STB's) support, two robots will be deployed from July this year in Park Avenue Rochester Hotel for housekeeping and back-of-house functions, such as transportation of linen, refuse and bulky items. So, if you go there, you may not see it because it is operating at the back-of-house. But there are plans to take it further to the front-of-house for the delivery of luggage or room service to guests.
The adoption of robotics in areas where you have human interface, what Mr Leon Perera called social robots, would take more effort. Precisely because of the human interface, a lot more effort needs to be done, in terms of how you calibrate these devices in order to serve their purpose and to be able to respond. But there are significant efforts being made and part of it is, of course, what we are trying to do in some of these verticals.
Secondly, in terms of new business models in manufacturing, many of these are emerging. It is expanding the notion of manufacturing and we are working with the industry to capture those opportunities. Let me give Members an example.
Medical technology firms are using analytics – Members have talked about it – to go beyond producing medical devices to providing digital healthcare solutions. So, they are enlarging the value proposition, such as the remote monitoring of medical conditions. EDB and the Ministry of Health supported the Eastern Health Alliance to establish their innovation team at Changi General Hospital to work with the industry and test-bed new healthcare solutions. This team partnered Philips Healthcare to jointly develop a tele-health programme for heart failure patients in Singapore, to care for their health and, more importantly, to reduce the risk of re-admission via tele-monitoring, education and customised care plans. EDB also worked with Philips to establish its Asia-Pacific Centre of Excellence for its hospital-to-home business units in Singapore.
This is an example of how a firm that was in manufacturing of medical technology (medtech) is also moving into larger solutions or related service activities which complement manufacturing. This is something we want to work on and there are other examples in aviation, aeronautics and so on.
Dr Tan Wu Meng highlighted the need to bring together the industries and disruptive technologies of tomorrow. I think this is very important because many new opportunities actually lie precisely at this confluence of different industries and new technologies.
Physical proximity is one means to encourage greater interaction among enterprises, solution providers and researchers that can spark novel ideas and create new products. We have done this at one-north, which is home to some 250 leading companies and global institutions, many incubators, startups and public research institutes and they, collectively, create about 40,000 jobs. This rich ecosystem has spawned many collaborative projects in biomedical sciences, infocommunications, physical sciences and engineering.
The Jurong Innovation District (JID) can do the same for the manufacturing sector, with several new growth areas that can be housed there, for example, advanced manufacturing, robotics which I mentioned, urban solutions, cleantech and also smart logistics as an extension. It will host the entire value chain, which will include R&D, design, prototyping, production and supply chain management, and have access to NTU's research and engineering capabilities. JTC LaunchPad @ JID will be ready in 2017 to support startups, incubators and accelerators.
[Deputy Speaker (Mr Charles Chong) in the Chair]
But ultimately, Chairman, we must ensure that our people benefit from these changes and the opportunities, as Dr Tan Wu Meng has emphasised. Under SkillsFuture, the tripartite partners are working closely with education and training institutions to equip Singaporeans with the requisite skillsets under various sectoral manpower plans. Sir, may I have your permission to display some slides on the LED screen, please?
The Chairman: Yes, please go ahead. [Slides were shown to hon Members.]
Mr S Iswaran: Thank you. One example of a Singaporean who has acquired new skills to meet the needs of his industry is Mohd Jamil Bin Mohd Said from Sanwa-Sayama Precision Engineering Pte Ltd. Mr Jamil joined Sanwa in 1998 as a technician specialising in mold-making. In 2012, he enrolled in the Precision Engineering Master Craftsmen Programme conducted by Nanyang Polytechnic where he acquired technical skills, such as machining process design.
Upon graduation with the Workforce Skills Qualification (WSQ) Diploma in Precision Engineering Master Craftsmen Skill and a WSQ Specialist Diploma in Precision Engineering, Mr Jamil now oversees the mold-making team and facilitates the automation of machining processes. This is a very good example and there are many others like him. We need similar efforts across all sectors and Parliamentary Secretary Low Yen Ling will elaborate further.
Members would have noted that partnerships are central to these industry transformation efforts. Assoc Prof Randolph Tan asked whether such coordination and cooperation can be balanced with the natural competitive instincts of an open-market economy. On the face of it, Chairman, this inherent tension seems irreconcilable. Yet, if we look at our track record and experience, we have always encouraged and nurtured close partnerships among quite diverse stakeholders in our economic system; some of them are \"natural partners\" and others could even be competitors. Let me illustrate what I mean.
We have supported \"natural partners\" through schemes, such as the Partnerships for Capability Transformation (PACT), where large enterprises upgrade their suppliers' capabilities, through sourcing and qualification processes, and that is mutually beneficial. Last year, PACT was enhanced to support activities like joint product development between larger enterprises and their suppliers. So, there is co-development.
We have also brought together competitors in collaborative projects. An example of that is A*STAR's Aerospace Research Consortium, which brings together Airbus, Boeing and Embraer, to undertake pre-competitive research into complex problems facing the industry. This is not just about collaboration with the Government, but also within the private sector. More companies are embracing the idea of open innovation and working collaboratively. These partnerships are not dysfunctional. They are born out of the recognition that even competitors stand to benefit when they cooperate in certain parts of the business process, either because it is an area which is very complex or where the barrier costs are very high. So, a collective effort tends to achieve a much better outcome and they can all share in it.
Mr Henry Kwek and Assoc Prof Randolph Tan asked how the Industry Transformation Programme differs from our current approach. At the enterprise level, the Government will continue to support our companies in their innovation, productivity, skills upgrading and internationalisation efforts. However, as I have mentioned and we have heard in the comments by many Members, the nature of the current trends and challenges is such that it calls for broader strategies at the sectoral level. We need measures which the market may not be ready to supply or adopt. Take, for example, the case of modularised robotics solutions. It may not be quite market-viable yet. We could call this market failure or perhaps market gap. We will need to act proactively in order to generate the solutions which can be adopted.
Under the Industry Transformation Programme, what we can do is bring stakeholders and our resources together, with scale and focus to proactively support each sector's development and response to the differing challenges that they face. And we do not underestimate the scale of this challenge. This is a point that several Members have made.
Industry Transformation is challenging and will require deep partnerships among large and small companies, public research institutions and private enterprises as well as TACs and, of course, Government agencies. Each will bring an important perspective. Centres of innovation, for example, will have a view on the technology landscape. TACs will have a better grasp of industry trends and what the needs of their members are. Unions will have a view on how skills training and workforce development can take place. We need to bring all these together to address some of the most salient issues in the medium to long term for our sectors.
To coordinate and execute the industry transformation effort, we will appoint \"cluster champions\" from agencies like EDB, SPRING and IE Singapore. But they are not the only ones, because there are other agencies looking at different sectors. I understand Assoc Prof Randolph Tan's fears that this might impose an excessive administrative burden. However, based on our experience, the plans that are being formulated should result in a tighter coordination of efforts and a more effective use of our resources. We will have to implement and work on this, and it is going to be an iterative process as we go forward.
Sir, the Industry Transformation Programme will be complemented at the enterprise level by efforts to support businesses to adopt technology, and key to this is the Automation Support Package which was announced in this Budget. Over the next three years, $400 million of support will be available for more than 300 automation projects. This will comprise three elements: the enhanced Capability Development Grant (CDG) which supports 50% of full-scale automation project costs up to $1 million; the new 100% Investment Allowance (IA); and the enhanced Local Enterprise Finance Scheme (LEFS).
Let me illustrate how a company could benefit so that this is crystalised. Mr Tan is the owner of a local medium-size food manufacturer, with plans to automate and increase production for export. He engages a system integrator to study the automation project, with a consultancy and installation fee of $200,000. He then invests $1.8 million to purchase three robotic arms and a conveyor belt system that integrates the packing and palletising process.
Under the enhanced Capability Development Grant, Mr Tan will receive a support grant of $1 million, defraying $100,000 of consultancy and installation fees, and $900,000 for the cost of capital investments. And Mr Tan will also receive a 100% Investment Allowance on the remaining capital investment of $900,000, which will translate to about $153,000 of tax savings. Finally, Mr Tan can obtain financing for the equipment purchase from financial institutions participating in the enhanced LEFS. And as Members know, the Government's risk-share has been increased from 50% to 70% for SMEs. This should improve Mr Tan's chances of securing a competitive loan.
With the capacity to scale production, he can also tap on IE Singapore's schemes, such as the Market Readiness Assistance and Global Company Partnerships, in order to go overseas. So, taken together, this is a package which will deliver substantial benefits to SMEs that are prepared to take the decision to automate. That decision will also give SMEs the capacity to think about going overseas and entering new markets, for which there are also support schemes available.
Sir, let me now turn to the issues beyond industry transformation and, in particular, the need to fuel growth and value creation by generating new ideas, products, services and business models. Entrepreneurship and innovation are two important enablers of this. Many Members have spoken on this. Mr Henry Kwek asked about the progress of our efforts to develop a startup ecosystem.
Over the years, startup activity has increased, with the number of startups in Singapore more than doubling from 24,000 in 2005 to 55,000 in 2014. Our startups have also attracted more investor interest, which is one measure of their quality. The number of venture capitalist deals doubled from about 70 in 2007 to 140 in 2013, with aggregate deal value increasing seven-fold from $120 million to $860 million. The number as well as the value of these venture capital funded transactions have been significant in the startup space.
Importantly, our efforts to nurture the startup ecosystem have allowed budding entrepreneurs to fulfil their aspirations. One example is Assoc Prof Tina Wong. She is the co-founder and CEO of Peregrine Ophthalmic, a local biotech start-up. With SPRING's support and, together with co-founders, Deputy President and provost of NTU, Prof Freddy Boey, and Chair of the School of Material Science and Engineering at NTU, Prof Subbu Venkatraman, Assoc Prof Wong has developed the world's first sustained-release nanomedicine for ophthalmology for the treatment of glaucoma. Her startup has attracted the attention of the world's top five pharmaceutical companies and will make inroads into the global glaucoma drugs market worth US$4.3 billion, potentially benefiting up to 80 million glaucoma patients by 2020.
Mr Henry Kwek also asked about the Government's future plans to support the growth of startups in Singapore. We plan to support the startup ecosystem by supporting innovative companies to scale through: (a) internationalisation; (b) partnerships; (c) an enabling regulatory environment; and (d) talent development.
First, on internationalisation. There are more and more opportunities for a startup to scale through digital internationalisation. Indeed, you could say that many of these companies are born global because, from the moment they start, they can access international markets. BeMyGuest (BMG) is a local startup that recently became the first Singaporean company to be featured on Fast Company's \"World's 50 Most Innovative Companies List 2016\" for its online travel platform. IE Singapore supported this company in its digital integration with Ctrip, China's largest online travel agency. This has allowed BMG to establish tie-ups with 25 other Chinese partners and increase bookings by over 100 times in a period of nine months. That is the power of digital access to markets. And this year, the company is also working with IE Singapore to penetrate other Asian markets, such as Japan, India, Indonesia and Korea.
SPRING and IE Singapore will continue to support our companies, especially the startups, to build capabilities in these areas, such as customer analytics, social media marketing, mobile commerce and digital platform development, to benefit from the global digital economy.
Second, on partnerships. What we see more and more of are large enterprises embracing open innovation to access new technologies and ideas. EDB and SPRING have, in fact, been working with many MNCs and large local enterprises (LLEs) to undertake corporate incubation and venture activities, as well as co-innovation partnerships with our startups. What this means is that with such partnerships, our startups will have the financial resources, expertise and networks to scale.
On regulatory environment, let me use the medtech industry as an example. The Health Sciences Authority (HSA) has been adopting a risk-based approach to the regulation of medical devices by ensuring that the controls commensurate with the risk of the devices to individual health. HSA has also expedited approvals for devices that have been cleared by reference agencies. More recently, they have introduced an online Medical Device Risk Classification Tool, which allows companies to quickly identify the risk classification of a medical device within five to 10 minutes. This is important because the risk classification tells them the kind of regulatory hurdles they face. And these five to 10 minutes, to put it in context, are much faster than the previous one to two weeks of paper-based processing. HSA and many of our other regulators are exploring how we can create an enabling environment without compromising their core regulatory objectives.
Mr Azmoon Ahmad asked about our efforts to nurture entrepreneurs. We will continue to provide support for mentorship through initiatives, such as SPRING's Incubator Development Programme (IDP). Under IDP, incubators and accelerators are supported with grants to enhance their capabilities and programmes, including the engagement of mentors. Through the 21 incubators and accelerators supported under IDP, about 90 industry professionals have been engaged to provide mentorship and expertise to our startups. This is something we can scale according to the needs and responses.
Let me now move on to the point on innovation. I agree fully with Ms Foo Mee Har and Ms Chia Yong Yong who emphasised the need to ensure that value is created for Singapore from our $19 billion investment in RIE2020, and our broader investments in R&D. Our investments in R&D have strengthened our innovation ecosystem and created value for Singapore. One measure is the number of research scientist and engineer jobs in Singapore, which has increased from 19,000 in 2004 to 33,000 in 2014. That is a significant increase and, importantly, 70% of those jobs are held by locals. So, we have been able to grow our local capacity as well.
Another measure is the business spending on R&D, which has doubled from $2.6 billion to $5.2 billion over the same 10-year period, catalysed by public spending on R&D. So, on the one hand, the businesses have been catalysed to spend more on R&D, and we also see a commensurate enhancement in our capacity, especially in the local talent pool, to meet those needs.
Importantly, our R&D investments have also enabled new industries to grow. Our biomedical sciences (BMS) R&D initiative, which was launched in the 2000, has spawned a strong BMS sector, contributing over $12 billion in value-added (VA) and employing more than 18,000 people in 2014. As a reference, if I remember correctly, in 2000, VA from the BMS sector was about $4 billion.
To assure Members, we also have a framework to track the KPI of our R&D investments. These range from input measures, such as R&D intensity and researcher intensity, relative to comparable economies so that we have some benchmarking, to measures of the quality of the research, such as citations and papers published, and measures of value creation, which several Members have talked about, through commercialisation, including licensing and spinoffs.
Ms Chia asked about the treatment of IP ownership arising from R&D activities. In general, A*STAR retains ownership of the IPs that it develops; where an IP is jointly developed with a collaborator, including from the private sector, the IP may be jointly-owned. And we have multiple mechanisms to facilitate the use and commercialisation of that IP later on. Licensing is one, but there are other mechanisms.
Beyond the licensing of IPs, we also have longer-term initiatives to align our R&D investments with the needs of companies and the economy. The Industry Alignment Fund (IAF), which was introduced under RIE2015, seeks to tighten the linkages between R&D capabilities and the industry's needs. We are trying to bring the research in our institutes closer to industry, and IAF is one mechanism to do that. IAF has supported about 600 projects to date. These projects were carried out in collaboration with industry by our public sector research institutes and also pertain to developing capabilities needed by the industry.
Under RIE2020, the IAF funding will be increased by $200 million to $1.8 billion. We are adding to that Fund because that is where we want to emphasise the R&D efforts in the way it is aligned with the industry.
The IAF is also being adapted to meet the changing needs of industry, which are becoming more complex and need to tap on a diverse spectrum of capabilities. For example, Nestle sees opportunities in combining traditional food manufacturing with sophisticated biomedical knowledge, especially on nutrition and formulations. The Nestle Research Centre Asia was established here to leverage A*STAR's research capabilities to develop new nutritional products.
We will allocate about $660 million to this form of IAF-Industry Collaboration Projects, which will draw on the best researchers and capabilities across our public sector research community. And this goes to the point about what we expect in return – we require tangible contributions from industry partners in cash, in terms of the resources they commit and the longevity of that commitment, as a measure of their commitment to the projects and the projects' relevance to industry. Very often, these commitments are also in parallel with other kinds of activities the industry partners are undertaking in Singapore.
I just want to make one final point on this. I know this was not the intent of Ms Chia Yong Yong's comment. The Member qualified it but I would like to restate it. We should be cautious not to adopt a parochial attitude towards innovation or the ownership of IP. That is a very important thing to bear in mind. Some of the best outcomes in innovation are produced when it is undertaken in an open and collaborative manner. We must preserve that environment in our R&D ecosystem. Hence, we must maintain an open innovation ecosystem that fosters collaboration among multiple stakeholders, whether they are public or private, large or small, local or foreign. Such R&D activities bring many other valuable benefits to Singapore which I have enumerated.
Ms Foo Mee Har, Mr Saktiandi Supaat and Ms Sun Xueling rightly pointed out that innovation should play a key role in the push for our SMEs to transform. And we will enhance SMEs' access to technologies and expertise. One way is through the Intellectual Property Intermediary (IPI) under A*STAR, which has helped our companies source technologies locally and overseas. So far, they have matched, I am told, more than 70 companies.
Recently, this intermediary was transferred to SPRING. Through SPRING's network amongst SMEs and TACs, I think the level of technology transfer that is relevant to the needs of SMEs is going to be significantly improved.
There is also an initiative to simplify licensing terms for SMEs. I was very pleased to learn that A*STAR's licensing agreements are now shorter and use simpler language. We can all do with simpler language and it has reduced the time required for licensing significantly.
We will also do more – and I think this is something that is noteworthy for Members – to grow the in-house innovation capabilities of our SMEs. A*STAR and SPRING's GET-Up Programme actually seconds our public researchers in our IHLs, research institutes and polytechnics to SMEs to undertake innovation projects. So, they become the employees of that company to work on their research blueprint, in order to develop particular solutions. In many cases, they have gone on to become commercially valuable. To date, we have more than 600 researchers who have been seconded to SMEs. Under RIE2020, we will enhance the programme to second senior research scientists and engineers (RSEs) to SMEs.
Sir, may I, finally, turn to our goal of ensuring a secure, reliable and sustainable supply of competitively-priced energy to our economy?
Mr Low Thia Khiang asked about the Government's plans to enhance and diversify our energy sources. We have taken significant steps in this regard. Our LNG terminal, which commenced operations in 2013, allows us to geographically diversify our sources of natural gas, which is our main source of energy. Just to take up Mr Low's point, you could say that we are intensifying our use of LNG. But what we are actually doing with the LNG terminal is diversifying geographically our sources of natural gas. That is a very important strategic step and something that should not be underestimated in terms of its value to Singapore. We have been expanding the terminal capacity and the fourth tank could be completed by 2018, which would take throughput capacity to 11 million tonnes per annum. EMA is studying the need for more.
There are some questions on renewables which Parliamentary Secretary Ms Low Yen Ling will take up. We are also studying the feasibility of electricity imports in the medium to long term. That is where the ASEAN Power Grid is relevant. It is really a plan to have a network of the grid infrastructure for an integrated ASEAN electricity market. To date, Members may not be surprised to hear that six of the 16 planned bilateral interconnection projects have been completed, including one between Singapore and Peninsular Malaysia.
Mr Low Thia Khiang asked about the potential impact to Singapore should our neighbours embark on a nuclear power programme. The pre-feasibility study, which the Member noted was completed in 2012, concluded that the currently available nuclear energy technologies were not yet suitable for deployment in Singapore. However, we are strengthening our capabilities to understand nuclear science and technology to allow us to assess the implications for Singapore of evolving nuclear energy technologies and regional nuclear energy developments.
In April 2014, the Government announced the plan for a $63-million Nuclear Safety Research and Education Programme to support capability development in this space. It comprises the Singapore Nuclear Research and Safety Initiative focusing on research and developing capabilities in nuclear safety science and engineering, and the Nuclear Education and Training Fund to support education and training in these areas. It works on a wide range of areas and I am happy to furnish more information. But so far, four of the research projects have commenced in 2015 and the remaining five are expected to commence in 2016.
In terms of scholarships, so far, nine scholarships have been awarded. Mr Low Thia Khiang commented that it is lower than expected. Well, the only comment that I would make is that this is a rather specialised field. It is not so easy to get people in their applications to say, \"Let's take up the scholarship to go and do nuclear studies\". What we have done is to reach out to try and attract students to take this up, and we will continue to invest in these efforts significantly. Importantly, it is also about working together with other nuclear technology partners in other established venues like in France and the US and so on, which adds to our knowledge and ability to build up the core of Singapore-based capabilities to understand this space.
Finally, on the responsibility of countries that deploy nuclear energy, they have to be accountable to their population and to the neighbouring regions to ensure that high safety and security standards, based on those set by the International Atomic Energy Agency (IAEA) and international conventions, such as the Convention on Nuclear Safety, are adhered to. This is both on aspects of operations as well as issues of disposal of nuclear waste which Mr Low Thia Khiang mentioned.
It is important that our region collectively build and strengthen our emergency preparedness and response as nuclear and radiological emergencies have basically no boundaries. We are working with the ASEAN countries through the ASEAN Network of Regulatory Bodies of Atomic Energy (ASEANTOM) and IAEA to strengthen cooperation in this area and to share radiation monitoring data.
Mr Low Thia Khiang has asked if electricity prices can be delinked from oil and linked to natural gas or LNG instead. It is quite ironic because, right now, we actually have lower electricity prices because of lower oil prices. So, we should be careful what we wish for. Having said that, the crux of the matter is not about picking which is going to be cheaper because, at some point, oil prices may be low; at other times, it may be high, and we will see a similar impact on gas prices.
What we really want to do is to allow options in Singapore where the buyers of gas have the opportunity to create a portfolio which they think best suits their risk appetite and hedges against the movements that they are concerned about. So, SLInG, which Mr Low highlighted, is one possibility. It is very new and not quite ready yet for that sort of indexing, but we think that it has potential and we have to see how the market responds.
There is also the question of full retail contestability. As announced, the plan is to have full retail contestability in the electricity market by 2018. Certainly, well before we embark on that, we will need to have a comprehensive education programme to make sure households and individuals understand.
Having said that, I want to make two points. First, we need to get the system right before we talk about communication. So, that is what the work is on now. The system is not just about the technical aspects but also the potential suppliers, how they will come in and what kind of packages they offer. Secondly, we also want to make sure that there is a default fall-back option for households, precisely because some of the households may not be able to fully appreciate the decisions or may not want to make those sorts of choices. These are some of the policy aspects that are being worked out. Once we are ready, we will embark on an education programme to socialise our households to the opportunities.
Sir, I have addressed the key points and I want to end by emphasising that the fact of the matter is our economy faces important challenges arising from all the forces we have talked about. It calls for proactive measures at the sectoral level, even as companies try and adapt to some of the challenges that they face. So, we are responding with efforts like the Industry Transformation Programme (ITP) and also through efforts to boost entrepreneurship and pervasive innovation in order to create value in the economy.
I would conclude by saying that it is a formidable task but not insurmountable. The key is that we have all parties on board in order to achieve the objectives that we have set for ourselves.
Mr Thomas Chua Kee Seng (Nominated Member): Mr Chairman, in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Chairman, and fellow Members, trade associations (TAs) can play an important role in helping SMEs and traditional industries to be future-ready. Many TA leaders are dedicating their services to their TAs while managing their businesses. Although companies compete amongst themselves in businesses, everyone in their TA stands united and works hand in hand for the common interests and with the goal of enhancing the overall image of the industry. The motivation behind it is passion and a \"never-say-die\" mindset.
However, we have to acknowledge that no one can stop its evolution. Traditional industries need to move with the times and make adjustments proactively. I would like to share the approach by three TAs in this regard.
The first is the Singapore Precision Engineering and Technology Association (SPETA), renamed from \"Tooling\" to \"Technology\". The second is the Singapore Houseware Association, which was renamed from \"Chinaware\" to \"Houseware\". The change of name provides broader scope for these TAs.
Another example is the Singapore Industrial Automation Association. They did not change their name, but repositioned themselves through their events. Their conference and exhibition were named ioTAsia, with \"ioT\" being the \"Internet of things\", a very modern technology terminology. A change in name or positioning of the organisation reflects the change in mindset of TA leaders and it is the first step to transformation.
Thus, when Minister Heng Swee Keat announced that 20 TAs would receive the Government's assistance to formulate their industry transformation blueprints, and that Government officers would be seconded as \"industry leaders\" to the various industries, many TAs started speculting on which would be the lucky ones. Would their TA be selected? I am wondering how the knowledge and experience of the 20 officers would be applied to the TAs? According to a report by The Business Times, there are currently more than 350 TAs nationwide. How can other TAs participate in this project after the 20 officers have been assigned?
To effectively promote the collaboration between the Government and TAs, I would like to highlight two dilemmas of TA leaders. Firstly, the sustainability of TAs. TAs are non-profit organisations and have limited operational funds. With the support of the Government, some projects which have shown initial good results would see Government officers being over-eager to deliver the KPIs, to the extent of even bypassing the TAs and taking over the projects via setting up new entities.
Secondly, the phenomenon of \"celebrity-chasing\" by Government agencies. TAs which have performed well are overwhelmingly sought after and supported by different Government agencies with various assistance schemes and incentives. However, those TAs with limited resources but which work hard in search of new directions can only fend for themselves although they need even more assistance. This situation takes place probably because Government officers have a preconceived notion, that is, supporting TAs that they deem promising and not wanting to waste time on TAs that they feel would not be able to make it.
I need to reiterate that bringing up these two dilemmas does not affect TAs' support and expectations of Government policies. As the President of the Singapore Chinese Chamber of Commerce and Industry (SCCCI), I am heartened that the Chamber's TA Hub has received the strong support of many Government agencies and TA members. We hope to provide the various TAs with a platform and space to better lead their respective industries. At the same time, we hope that the TA leaders from the different industries can meet one another more often, creating chemistry for new business and new opportunities.
Chairman, after listening to the speeches in Parliament over the past few days, I fully agree with the union leaders who called for companies and employees to move with the times and be well-prepared for the future. During business transformation, even with a comprehensive plan, the management still needs to have good communications with their staff, especially when it involves adjustments to work processes or the introduction of automation equipment.
Some staff are accustomed to their current practices and do not want to learn new skills. Some employees worry that with the company's transformation, they will lose their edge and even fear losing their jobs. This kind of mindset is resistant to change.
Looking at the current business environment and advances in new technologies, no one can guarantee that their specialties will always have a market. Therefore, the employers and employees of SMEs and traditional industries must work together to be future-ready.
Miss Cheryl Chan Wei Ling: Mr Chairman, while I am glad that both the Ministers have addressed some of the challenges and also some of the support packages or schemes that would be made available, but, with the weak global growth, the immediate business outlook for some of SMEs, as well as startups is still poor. Here, I would like to suggest a few areas in which the Government can step in to assist on a short-term basis and help the companies continue to transform and remain competitive.
First, for startups and SMEs, managing startups and ongoing costs is one of the key challenges. Any schemes that support reduction of their fixed costs will be useful for them to manage their cash flow. Cost of labour and rental are the main components of their fixed costs. The Government can consider providing some of their subsidised rental and tax rebate for a fixed period, based on some mutually agreed objectives, like innovative business models, target financial returns and others.
Second, I am glad that Minister Lim Hng Kiang has referred to the fact there would be the LEAD+ programme that would actually provide these shared corporate support functions. To take that further, I would suggest that they can also provide job opportunities for some of the retirees who have past management and extensive business experiences. A platform can be established for matching these retirees to SMEs and startups to serve as mentors and consultants so that they continue providing their know-how in the field.
Lastly, for businesses, managing cost is only one of the many aspects that they have to handle amidst the challenging economic conditions. The silver lining for businesses that survive tough situations is that their businesses would have stress-tested a differentiating edge −.one with an agility to adapt and constantly keep abreast of market trends. And the crux of this is the culture within the company and the mindset of the business owners. As a step to encouraging more innovation and piloting some of these creative ideas, we need an open, flexible and trusting environment. To facilitate this, I hope that the Government could strengthen the framework for IP protection, streamline some of the channels for information search and their applications, as well as to leverage the trade networks that could assist them in future expansion as part of the transformation process.
Mr Yee Chia Hsing: Mr Chairman, businesses, in particular SMEs, are being affected by global factors, such as a slowdown in China, as well as domestic factors, such as high business costs.
During the debate on the President's Address, I spoke on the slowing economy. For instance, annual container volume handled at our ports for 2015 was 8.7% lower than for 2014. The numbers for this year continue to paint a gloomy picture. Container volume handled in the first two months this year is 9.7% lower than for last year.
In the face of these challenges, business confidence among SMEs has been slipping. The latest index by SBF and DP Information Group to measure business sentiment amongst SMEs showed that SMEs do not expect any growth during the next six months, with the Index at its lowest since it was first published in 2010. Can MTI share what is the Government doing to help companies ride through this difficult period?
Mr Azmoon Ahmad: Mr Chairman, I regard the ITP which the Minister for Finance has outlined in his Budget speech as highly significant. It is a mega shift which Singapore is about to embark on. I am quite certain this will have a significant impact and repercussions on our SMEs at all levels.
I am also quite concerned with those SMEs at the lower segment, especially if a one-size-fits-all approach is taken. This is especially so when there are gaps of varying degrees of capabilities and competencies among our SMEs. We can roughly say that there are various types of SMEs: the normal SMEs, small SMEs, very small SMEs and very, very small SMEs, and even further down the road.
With each facing its own unique difficulties, I am sure each will also need to find its own set of formulas and solutions to survive and grow. From financing to resources, to processes and organisational capabilities, each SME has to decide what has to be focused on.
I reckon this is like a sportsperson who wants to improve on his performance. Engaging a coach will then suggest that the sportsperson will undergo a step-by-step regime, thus building up the right muscles to elevate his or her strategic parts of the body and, ultimately, toning up the muscles where they really need for that particular type of sport. Not embarking on the right regime may lead to the wrong muscles being developed and, hence, not able to reach the desired outcome.
I would presume that, likewise, this is needed in the growing of our SMEs from one level to the next, thus moving in tandem with the overall strategic goals of the nation. I reckon it is well understood that different regimes have to be offered to the different levels of SMEs. My question, henceforth, is: has the Ministry already planned or is in the process of planning a targeted approach for the lower level SMEs which, I presume, will need very specific, if not customised assistance?
Mr Louis Ng Kok Kwang: Sir, with an expected global economic slowdown, small business owners are, understandably, concerned about their company and are looking to the Government to provide some help and support during the downturn.
As I mentioned in my speech during the Budget debate, they are concerned about the lowering of the cash payout rates for the Productivity and Innovation Credit Scheme and that the Government is proceeding with increasing the foreign worker levies for the services and construction sectors.
There is also concern that a significant portion of the Budget seems to be tailored towards helping the larger SMEs. Considering that micro SMEs will be hit the hardest during an economic slowdown, what initiatives will the Ministry be launching to help these smaller SMEs?
Mr Sitoh Yih Pin (Potong Pasir): Mr Chairman, I am heartened by the Minister for Finance's emphasis on fostering innovation and improving productivity in the latest Budget.
Targeted support for hiring of older workers, as well as automation efforts, are steps in the right direction as our workforce matures and we face constraints with the number of foreign workers.
There are also measures in this Budget that help SMEs to embrace innovation and improve productivity. ITP and TechSkills Accelerator are exciting initiatives that help our companies and workers adapt to rapidly changing economic realities. Change is the only constant in life.
Sir, but while business cycles shrink and we must embrace change, I hope that the Government, especially MTI and MOF, can help our workers develop deep skills in their chosen fields. Deputy Prime Minister Tharman has also said on several occasions that our workers need to develop deep skills, in particular, in the finance and logistics sectors. He used the term \"deep mastery\" and referred to the German model of Mittelstand companies. I cannot agree more.
The Mittelstand companies are the rough equivalent of our SMEs but they are also quite different. They are very focused on doing something really well, are very nimble and customer-centric. But what really differentiates the Mittelstand companies from Singapore SMEs is that they have a very strong system of apprenticeship that helps their workers develop deep skills. It is these deep skills, developed over time and generations, that give Mittelstand and, indeed, German Industry, their competitive edge in the world.
Sir, I think the idea and value of apprenticeship are under-appreciated in Singapore. Exceptions to be found are in the traditional professions of medicine, law and accounting where training is still considered very much a part of the apprenticeship process. It is no surprise that these examples are considered highly skilled professions.
Our SMEs hire two-thirds of the workforce and produce 50% of our GDP. That is not a very encouraging statistic in terms of productivity. And I suspect this is due to the fact that our SMEs do not have a robust apprenticeship system that engenders the development of deep skills. Job-hopping between companies and sectors almost certainly does not lead to deep skills.
Deep skills are needed not just for productivity but for innovation as well. Innovation is not about sitting around and having a \"Eureka\" moment. Innovation also requires deep skills and mastery. The beautiful fonts we associate today with Apple computers and iPhones were due to the fact that Steve Jobs attended calligraphy classes in college conducted by a former Trappist Monk called Robert Palladino who had mastery of calligraphy and fonts. Locally, the salted egg yolk croissant which has become very popular lately is also a result of deep skills. If you cannot make a decent croissant, you certainly cannot make a good salted egg version.
So, I would like to ask the Minister what measures are in place to encourage SMEs to give apprenticeships and what incentives are there to engender the spirit of apprenticeship among our workforce. Our workers must look at apprenticeship as a necessary step to developing deep skills and, hence, excellence.
Mr Saktiandi Supaat: Mr Chairman, over the years, we know our average productivity growth has slowed. This is especially so for sectors, such as retail and F&B. Companies in these sectors are also faced with constraints, from a tight labour market to high business costs. Deputy Prime Minister Tharman also highlighted recently that there has been a divergence in productivity growth between outward-oriented sectors and domestically-focused ones. Even as outward-oriented sectors, such as logistics and manufacturing, saw productivity growth of 3.2% each year over the last five years, in the domestically-oriented sectors, such as retail and F&B, productivity has fallen by about 0.6% each year in the last three years.
I note that a number of efforts have been made by various agencies to encourage innovation and the usage of technology to boost productivity, but the impact on productivity has not been evident. Have we got to the root cause of this issue? How have our productivity initiatives been working, in particular, for the domestically-oriented sectors? Can MTI share the efforts to capture new measures of productivity that can be monitored for policy purposes? What is MTI's strategy to raise productivity growth, particularly in the most affected sectors? And if we already have one, are we on track?
The low productivity rates, coupled with disproportionately high wages, are worrying as this situation is not sustainable. It suggests that either wages will eventually have to fall as we price ourselves out of the market, or productivity has to go up. But the latter would need some concerted effort and focus, and current measures may need more time before we can see the benefits.
Mr Leon Perera: Mr Chairman, in Budget 2016, the Government has pledged more resources to our TACs and it is no doubt good that we aim to level up TACs to play more of a pan-industry role. But I would like to sound one cautionary note.
TACs are, generally, run by an executive committee (exco) that consists of representatives from different companies. If there is to be much greater involvement in communication with Government agencies, it is the exco and staff reporting to the exco at the TACs who will be on the frontline of that communication. Those exco members also have their own individual corporate interests.
In working with TACs, I urge MTI to take pains to ensure that communication efforts and engagement are as inclusive as possible towards all TAC members. This is so as to mitigate any risk that the TAC exco members will use or will be perceived, rightly or wrongly, to be using any access to Government resources or information for the benefit of their own firms, rather than for the whole TAC membership. Promptly circulating minutes of meetings between the Government and the TAC staff and exco to all members would be one way to manage this.
Ms Foo Mee Har: Chairman, it has been announced in this Budget of the increased role for TACs in helping their respective sectors transform and scale up. The pivotal roles that TAs play in supporting their industries have a long history dating back to the Middle Ages.
Today, in some of the most competitive economies, such as the US and Germany, TAs fulfil wide-ranging functions, including lobbying and guiding Government regulations, setting standards and best practices, R&D, upgrading processes and products in their industry, education and professional development for those employed in their industries and, often, they also act as a watchdog and develop codes of practice to increase stakeholders' confidence. In Korea and Taiwan, TACs act as formidable consortiums to capture overseas business.
In contrast, Sir, SMEs in Singapore tell me that TACs here have much room to step up to the role expected of them. With a few exceptions, most TACs have weak capabilities and few resources despite being most sincere about the intentions to support their industries. Most companies I spoke to are sceptical of TACs' abilities to lead the development of industry-wide transformation projects.
Sir, Minister Lim Hng Kiang just shared several new schemes to support TACs, such as the new LEAD+ programme to help TACs improve their outreach, attract talent, develop their capabilities, and strengthen their processes and services. But, Sir, the LEAD programme has already been in operation for over 10 years. In fact, just last year, Minister Lim Hng Kiang awarded further funding totalling $7 million to six TACs.
So, I would like to ask the Minister what impact has this support had over the last 10 years in helping TACs contribute meaningfully to the industries? How can we be sure that the additional funding this round that has been announced for TACs will, indeed, add value to the ground? How can TACs start to position themselves for the pivotal role demanded of them in this Budget, which calls for development of transformation roadmaps for over 20 sectors, in order to help companies lift productivity and drive innovation?
Sir, I am pleased to hear that the Government is planning to second up to 20 officers to TACs to improve partnership with the sector and facilitate better understanding of the needs of our companies. Like the hon Member Mr Thomas Chua, I urge the Government to consider having a larger number of such officers as there is a large number of TACs. Secondment of public officers will enable the much needed depth of understanding of specific needs of the industries and will empower them to be in a better position to design tailor-made support schemes and specialised infrastructural developments to spearhead transformation and innovation of the industries.
Sir, there is no better time for TACs to reinvent their role as sector leaders. I hope that all will rise to the challenge and that we will all do our best to support them.
Mr Chen Show Mao (Aljunied): Sir, commercial and industrial rentals are a perennial issue for Singapore SMEs and have been for quite some time.
In 2013, it was reported that a survey conducted by the Institute of Certified Public Accountants of Singapore found over eight-tenths of respondents wanted measures to reduce rental costs as their number one wish-list items for businesses.
Recently, the economy appears to have hit a bad patch. SBF, in their position paper for a Vibrant Singapore, mentioned that even with increased supply and slowing demand for rental premises, rents are still a concern for many businesses. This likely reflects their experience with higher annual increases over the longer term.
Over the longer term, access to low-rent premises has diminished, following the corporatisation of JTC assets as well as the commercial pricing of Housing and Development Board (HDB) rentals. Commercial and industrial rentals have risen substantially over the years. These now are significant expense items that breed insecurity for many small businesses.
We call on the Government to not only keep commercial and industrial rental increases near or below inflation but also keep their absolute amounts manageable as part of the more serious effort to nurture SMEs as the third pillar. This may require actions to, first, take a long-term view of reducing business rentals and have JTC pick up, in part, their former approach of building lower-cost industrial and commercial property before many of their many properties were privatised. Based on indications of strong demand for existing low-cost facilities, like incubators, this will go a long way towards stimulating the startup and SME sector.
Second, similarly increase the supply of HDB commercial space and lower the rentals for HDB commercial properties, which have increased substantially over the past 20 years, in order to stimulate retail-oriented businesses in the SME and startup sector and bring added diversity and vibrancy to our heartlands. This would be a welcome investment to nurture the SME sector. The extent by which HDB commercial rentals should be lowered can be calibrated based on available Budget surpluses and other considerations.
Sir, in keeping with the spirit of innovation, if nothing else, I hope the Minister will consider seriously these suggestions and, perhaps, test out the solutions in connection with the development of the JID or other special entrepreneurial zones made available to local SMEs through SPRING's schemes to promote start-ups.
Mr Kwek Hian Chuan Henry: Chairman, I would like to make a cut on potential adjustments to rental prices. I am happy to hear that the Government stands ready to act if the economy continues to slow down. Moving forward, should our domestic economy worsen considerably to warrant an off-Budget measure, and should our market rentals not adjust accordingly, would the Government consider taking the lead in reducing business costs by lowering JTC and HDB industrial and commercial property rental rates? Such a move could accelerate the rental adjustments to a more sustainable long-run equilibrium.
Mr Lim Biow Chuan (Mountbatten): Mr Chairman, may I declare my interestss as President of the Consumers Association of Singapore (CASE). Over the past few years, more and more Singaporeans go online to buy goods and services. And with more transactions, CASE has also seen more complaints.
The major complaints are: (a) failure to honour; and (b) misleading claims by vendors online. Unfortunately, online transactions are not well-regulated. Consumers are sometimes made to tick some boxes and agree to the vendor's standard terms and conditions. Some of these clauses are unfair or unreasonable. For example, one vendor made it compulsory for disputes to be referred to arbitration, knowing full well that most disputes involve smaller sums and consumers cannot afford the high costs of arbitration. It also means the ouster of the jurisdiction of the Small Claims Tribunal. Another case involves a vendor who introduced pre-ticked boxes for consumers, making them sign up as a member paying monthly fees without the consumer realising it.
I urge the Government to review the legislation regarding online purchases. Make it compulsory for vendors or retailers to provide clearer product information and full details about the online retailers. Allow online consumers to be given a right to return goods within seven days and get a full refund. Ban the practice of having pre-ticked boxes whereby consumers are misled to agreeing to certain terms unless they know how to untick the boxes. Ensure that all disputes can still be referred to the Small Claims Tribunal and not restricted to arbitration.
CASE is also concerned that more and more businesses are collecting prepayment for their products. When the business fails, consumers would not be able to recover their deposits and would suffer losses. This happened when a bridal shop closed last year and, recently, when a travel agency ceased operations.
I appeal to the Ministry to introduce greater consumer protection for consumers who have made advance payments to businesses in good faith, and then, these consumers find that when the business subsequently cease operations, they are left without recourse, except that they can make a claim as an unsecured creditor against a liquidator.
I urge the Ministry to consider introducing laws to ensure that prepayment deposits collected are paid to an escrow account only and not directly to the business or, alternatively, some other ways to protect prepayment deposits for consumers.
Last year, I expressed concerns about the lack of teeth in the Consumer Protection Fair Trading Act (CPFTA) and for criminal action to be taken against dishonest traders or contractors who have cheated consumers. MTI agreed to review the matter. So, may I seek an update on the proposed amendments to the CPFTA?
Finally, may I also ask the Ministry whether they can provide up-to-date information about petrol prices so that there is more transparency about petrol prices? This will allow consumers to know which is the cheapest petrol being sold by the petrol companies and allow greater competition.
The Chairman:\tThe Minister of State for Trade and Industry.
The Minister of State for Trade and Industry (Dr Koh Poh Koon): Mr Chairman, may I have your permission to display some slides later on in my speech?
The Chairman:\tYes. [Slides were shown to hon Members.]
Dr Koh Poh Koon: Thank you, Sir. As mentioned by the Minister for Trade Lim Hng Kiang, we recognise that companies are facing headwinds this year. Some sectors will be more affected than others. Mr Yee Chia Hsing and Miss Cheryl Chan asked about how the Government will help SMEs ride through this period.
During this year's Budget Statement, the Minister for Finance announced a number of measures to address the near-term concerns of our companies, especially SMEs. And these include measures, such as the enhanced corporate income tax rebate, holding off foreign worker levies for certain selected sectors and the new SME Working Capital Loan Scheme. The Government is monitoring this very closely and we stand ready to act when necessary. Let me highlight that these new measures are over and above the existing suite of assistance schemes that we have introduced over the years to help SMEs in their transformation journey.
I am pleased to announce that over the next five years, the Government will set aside a grant budget of over S$2.3 billion under the fifth tranche of the Enterprise Development Fund (EDF 5), specifically for the development of local enterprises. This is a significant increase from the $1.4 billion approved under the previous tranche. EDF 5 will support existing SPRING and IE Singapore schemes, and EDF 5 will go towards supporting ITP that the Minister for Finance has announced.
Mr Liang Eng Hwa may wish to note that this will go towards supporting SMEs to upgrade and capture new growth opportunities. But even as we set aside more funds for development of local enterprises, we are also sharpening our assistance schemes to make sure that our interventions are more targeted. This will ensure that we get the most out of our limited resources. For instance, we will put more resources into schemes that have created the biggest impact on our SMEs. One such scheme is SPRING's CDG.
I am glad to also announce that another scheme will be enhanced which is the Ministry of Communications and Information (MCI) and IDA's Infocomm for Productivity and Growth (IPG), which is funded from the National Productivity Fund (NPF). The $500-million IPG was first introduced at Budget 2014 to accelerate the take-up of IT solutions by SMEs and this will be enhanced in three ways.
Firstly, the scope of the scheme will be widened to support costs like retrofitting and business consultancy that are needed to unlock the productivity potential of the solutions. Secondly, help will be made available for SMEs to upgrade to the most effective solutions, even if they have received help from IPG before. And to maximise impact, we will also support the costs of solutions across all branches of the business.
I would like to assure Mr Louis Ng and Mr Azmoon Ahmad that Government support is open to all local enterprises, including the smaller ones. Depending on their specific needs, many SMEs have made use of the $5,000 Innovation and Capability Voucher (ICV) for consultancy services, and to adopt the various Integrated Solutions, such as fleet management systems and mobile ordering and payment schemes.
So, there are solutions that SMEs can adopt based on their individual specific needs. But the key challenge is in the outreach to this diverse group of 116,000 local micro-enterprises which can range from our HDB heartlander shops to a car workshop, for example. To make Government assistance more accessible to SMEs, especially the smaller ones, SPRING has worked with TACs to set up a network of 12 SME Centres, all across Singapore, housed within TACs, our Community Development Council (CDC) offices as well as within the heartlands. Like general practitioner (GP) clinics, these SME Centres have been serving as the first port of call for SMEs and providing one-to-one consultations on business and productivity assistance. In 2015, our Business Advisors at the SME Centres reached out to more than 22,000 SMEs. But I hope that SMEs will also take the opportunity to be proactive in seeking help from these SME Centres, especially if they are in need of assistance.
As mentioned by the Minister for Finance, the second half of 2016 will also see the public launch of the Business Grants Portal, which will make grants even more accessible to our SMEs.
Ms Sun Xueling shared her concerns about SMEs' access to information. Apart from one-to-one consultations at these 12 SME Centres, our economic agencies like SPRING and IE Singapore have been conducting regular dialogue sessions with SMEs to discuss the latest trends and opportunities for SMEs. Just last week, SME Centres held a Convention for SMEs to share knowledge on business model transformation and innovation. Additionally, SMEs can also visit SPRING's SME Portal, which is in both English and Chinese-language, for information on broad level industry trends, business guides as well as business opportunities.
Our companies, especially in the SME sector, must transform and do so urgently. As a small country with limited resources, we cannot compete on costs alone. We recognise that costs, as Miss Cheryl Chan pointed out, continue to be of concern to businesses. The two business costs often cited by businesses are labour and rent, as Mr Chen Show Mao said earlier.
The truth about labour costs is that between 2009 and 2015, real wage growth outpaced productivity growth. While labour productivity, as measured by value-added per worker, rose by 2.2% per annum over this period, the real median income of full-time employed residents, however, rose by a higher 2.5% per annum. This has contributed to an increase in unit labour cost of 1.5% per annum over the same period. Therefore, we need to press on with increasing our productivity to keep pace with wage increases.
Next, on rental costs. Mr Chen Show Mao expressed concerns about rental costs in our shops. Mr Henry Kwek also suggested that steps be taken to lower rents should the economic situation worsen. But in reality, rents are already coming down and will continue to face downward pressure from a further supply of rental spaces coming on stream.
Let me illustrate. In 2015, industrial rents fell by 2.1% compared to the previous year. In the next two years, an average of 2.3 million square metres of industrial space will come on stream annually. Similarly, for office and retail space, rents have fallen by 6.5% and 4.1% respectively in 2015, while a large supply of 993,000 square metres of office space and 808,000 square metres of retail space remains in the pipeline in the near future.
Mr Saktiandi Supaat asked about the root cause of our slow productivity growth. Let me, first, say that slowing productivity growth is not something unique to Singapore. It is a global challenge. Productivity growth in the Organisation for Economic Cooperation and Development economies, for example, has fallen below 1% since 2012 and has remained weak at 0.3% in 2014.
More than five years into our national productivity drive, we are on track to achieve the Economic Strategies Committee's target of 2% to 3% productivity growth for the decade as a whole from 2009 to 2019.
At the macro level, between 2009 and 2015, labour productivity, as measured by value-added per actual hour worked, grew by 2.7% per annum. However, most of this was due to the high productivity growth in 2010. Productivity growth since then has weakened.
At the sectoral level, however, the situation is somewhat more varied. Some sectors, especially the outward-oriented ones, are doing better than others. For example, since 2009, our finance and insurance sector achieved productivity growth of 4.7% per annum. Overall, labour productivity of the outward-oriented sectors grew by 5.1% per annum from 2009 to 2015. On the other hand, our domestic sectors, such as retail and food services, where the bulk of the companies are still heavily reliant on manpower, are not doing as well. From 2009 to 2015, the labour productivity growth of these domestically-oriented sectors remained rather weak, at 0.8% per annum. Therefore, we need to press on with productivity drives in these weaker sectors.
Mr Saktiandi Supaat asked about our productivity strategies going forward. For our productivity drive to succeed, we must go beyond Government incentives and Government measures. Business and consumer mindsets must change. Let me illustrate this with the retail sector.
Under the second five-year Retail Productivity Plan that was announced last year, one key focus area is sales growth. SPRING will support retailers to improve their online sales by collaborating with e-commerce players, such as SingPost, Google, eBay and RedMart. This will be especially helpful for retailers who already have their own brands as they can reach out to markets beyond Singapore.
According to a recent report by Bain and Company, two-thirds of the 150 million digital consumers in Southeast Asia are already shopping online. This is a huge online market compared to the physical market of five million in Singapore.
A number of local retailers understand that the opportunity for e-commerce is here and now. Forward-looking businesses are already changing in response to the changing consumer shopping habits. The Singapore Food Manufacturers' Association (SFMA) has also worked with IE Singapore to launch the first Singapore Pavilion e-commerce shopfront on Tmall.com, China's largest e-commerce marketplace. This has helped Singapore food manufacturers benefit from the collective branding, joint marketing, as well as the sharing of warehouses and logistics. And since the platform's launch in August 2015, 40 food companies have participated in this initiative.
We have been focusing a lot on what the Government should do and how our businesses can transform. However, the reality is that businesses also respond to consumer needs and behaviour, and the retail sector cannot transform quickly enough if consumer mindsets and purchasing habits do not change. Consumers can also play their part in helping our businesses to transform. For example, we have been working with the major supermarkets to proliferate the use of \"self-checkout counters\". If consumers adopt such behaviours, it will help to release manpower from these supermarkets to do higher value jobs.
To shift consumer mindsets, MTI has launched a series of publicity campaigns to promote this \"Do-it-yourself (DIY) culture\" within our consumers. In a survey conducted after the campaigns, 94% of respondents said they were aware of such self-checkout facilities. Among these, 97% of them have used the facilities. If consumers play their part and we see businesses responding to it, we will get better traction in our productivity drive.
Mr Thomas Chua asked about the need to help our traditional sectors transform and upgrade. One key strategy is the cluster development approach to revitalise and transform traditional sectors. We want to create a social environment where co-located SMEs can collaborate more with one another and find common solutions to solve common problems. Miss Cheryl Chan may wish to note that by clustering companies from sector-specific areas together, SMEs can share infrastructure and services to enjoy better economies of scale and lower the start-up costs. With reference to Mr Chen Show Mao's comment, this is one way that we have changed how we use business space while maintaining affordability and competitiveness.
For example, the JTC Food Hub@Senoko, conceptualised jointly by JTC, SFMA and the Singapore Manufacturing Federation (SMF), houses a shared cold room and warehouse facility (CWF). At the food hub signing ceremony I attended last week, food manufacturing and services companies told me that they could save on start-up and operating costs by tapping on these ready-built facilities and services offered by the CWF operator.
I am happy to announce to Members that JTC will be developing a new Metals, Machinery and Timber (MMT) Hub in Kranji for SMEs in metals, machinery and timber trades. To be completed in 2020, this multi-storey MMT Hub will have high ceilings and heavy floor loading to accommodate tenants' heavy automation machinery and products. These specifications will then allow companies to explore productive initiatives, such as the installation of overhead cranes, to replace and reduce their reliance on fork lifts.
In addition, Mr Chen Show Mao may wish to note that JTC's subletting policy provides companies with the flexibility to adjust their space usage according to business needs and supports space sharing by allowing lessees to sublet up to 30% of the total gross floor area to other companies for better synergy or to put temporarily unused space to better use. However, in terms of market share, JTC industrial space currently constitutes only 8% of all industrial space and we do not have the critical mass to influence overall market pricing.
Beyond our local environment, SMEs must also pay attention to the global environment and seize opportunities as they arise. As Mr Liang Eng Hwa pointed out, the Market Readiness Assistance (MRA) programme and Global Company Partnership (GCP) programme were enhanced last year to help companies internationalise and take advantage of these overseas business opportunities.
Just to give some numbers, in 2015, IE Singapore supported 34,000 companies in their internationalisation efforts, and this is a 21% increase over 2014. Over 80% of these companies were SMEs. Through the MRA programme, more than 30,700 companies were supported, and the take-up rate of MRA grants increased by seven-fold over 2014, benefiting mainly SMEs with an annual turnover of below $5 million. And under the GCP programme, over 3,800 companies received help to grow their business overseas in 2015. IE Singapore also helped companies to secure $769 million in trade and financing loans in 2015, up from $753 million in 2014.
Secondly, there was more focus on accelerating overseas growth of Singapore companies. IE Singapore introduced a new tax incentive – the International Growth Scheme, and expanded the scope of Internationalisation Finance Scheme to include mergers and acquisitions.
Thirdly, we introduced more targeted assistance to address the manpower needs of internationalising companies. IE Singapore enhanced the Double Tax Deduction for Internationalisation (DTDi) to include qualifying manpower expenses for Singaporeans who are posted overseas. This supports businesses that are expanding overseas and creates more skilled jobs and opportunities for our Singaporeans. The Minister for Finance has announced that the scheme will be extended for another four years until 31 March 2020.
The Minister for Industry, Mr S Iswaran, talked about the ITP. One key plank of this effort is our partnership with our TAs. Mr Chairman, if I may now speak in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Ms Foo Mee Har and Mr Thomas Chua spoke about the role of our TACs. With over 300 TACs in Singapore, the TAC landscape is very diverse – ranging from the broad-based ethnic chambers, to industry associations, as well as smaller TACs with only a handful of members.
The Government has been working closely with the business-focused TACs to reach out to SMEs. For instance, our apex chamber, the SBF, is one of our key partners in the Committee on the Future Economy (CFE).
Besides working together with the broad-based TACs, our economic agencies will need to take a more targeted approach to drive transformation of our key sectors. For ITP to be implemented successfully, effective partnerships with TACs are crucial. If SME Centres can be compared to GP clinics, then the role of TACs in ITP would be akin to that of \"specialist doctors\". Allow me to elaborate further.
First, businesses best understand the trends, opportunities and challenges of their sectors. In this regard, TACs can play a critical role in leading the transformation of their respective sectors, by organising the industry players and set the direction for growth and transformation of the sector. The Government has to work hand in hand with our businesses. There is a saying that \"the business arena is like the battlefield\"; businesses should work closely with one another to achieve greater results. In this regard, the Government can set the economic strategies but, at the tactical level, businesses must still lead the charge.
Second, TACs' extensive reach and business networks also create a multiplier effect for the Government to touch base with many more SMEs than Government agencies alone are able to. Ms Sun Xueling had asked about how SMEs can be alerted to business trends and opportunities. One effective way is through TACs. Mr Leon Perera may also wish to note that Government support for TACs is carefully scoped out and meant to create as wide an impact as possible. Since 2005, SPRING and IE Singapore have worked with 35 TACs on various sector upgrading projects under the LEAD programme. As of March 2016, 35 TACs have been supported for more than 180 industry-upgrading projects, totalling more than $120 million in grant and benefiting about 40,000 local enterprises.
Third, TACs can also support their sectors' growth by facilitating the aggregation of demand and provide shared resources for the industry. This can free up the time and energies of many SMEs and allow them to focus on their core functions.
Fourth, TACs can embark on Operation and Technology Roadmapping (OTR) with A*STAR under the GET-Up Programme for their respective sectors. OTR is a detailed step-by-step plan that lays out the technological capabilities needed for companies or sectors to remain competitive.
Fifth, as Mr Thomas Chua has noted, TACs can also bring SMEs together and help them internationalise. For example, a number of TACs have worked with IE Singapore on the Deal Hunter Programme to help SMEs source for business leads on a collective basis. Under this programme, the Franchising and Licensing Association (Singapore) organised 47 meetings in Japan for six companies, resulting in 15 business leads and overseas sales of $530,000.
For TACs that are willing and ready to take on a larger role, the Government will put in more resources to build up their capabilities. Ms Foo Mee Har and Mr Thomas Chua may wish to note that we will be introducing the LEAD+ programme to help TACs from selected sectors. For a start, we will be working more closely with TACs that have already achieved a certain level of competency, and from priority sectors for transformation and growth.
To help address the need for leadership development among TACs, SPRING's LEAD+ programme will support selected TACs on strategic planning, succession planning within TACs, as well as groom younger leaders. To strengthen the management of the TAC secretariat, SPRING will support training of the leadership team to manage corporate functions and also the secondment of up to 20 public officers over five years to TACs. SPRING will support up to 70% of the cost of this secondment and development programmes. In addition, SPRING will also support the upgrading of internal processes within TACs, such as in HR, information technology and finance, by providing funding for consultancy, hardware and software upgrading.
To spur transformation of the sector, SPRING will work with TACs under LEAD+ to strengthen the services they provide to their members. For instance, it will support a wide range of TAC-led activities, including collaboration with Centres of Innovation (COIs), OTR and market sensing activities. LEAD+ will be introduced in phases, starting with TACs that are already on board the LEAD programme.
For smaller TACs that may lack the scale or capabilities, I encourage them to start by embarking on LEAD projects with SPRING. As mentioned by the Minister for Trade Lim Hng Kiang, TACs can also work with SPRING on TAC-Collaborative Industry Projects, in order to benefit their members. Through these projects, TACs and SMEs can work with our research institutes and tap on new technologies, which could include data analytics and food packaging technologies, as mentioned by Ms Sun Xueling.
TACs can also come together and collaborate. For instance, our TACs in the logistics sector can also work with TACs in the food or retail sectors, to provide solutions to one another's problems in a synergistic and complementary manner. Smaller TACs can also consider moving to the TA Hub at Jurong Town Hall. By clustering at the TA Hub, smaller TACs can share facilities, tap on secretariat support from the larger TACs and explore collaboration in areas, such as training and organising overseas missions. I am happy to note that in addition to SCCCI, more than 10 TACs have indicated their interest to locate at TA Hub.
The Minister for Finance also spoke widely about the importance of partnerships in the ITP. But just as importantly, transformation must, first, come from the companies themselves. We have grants for companies, and TACs can take a proactive role in transformation and innovation. But all these will come to nought if companies do not have the hunger to transform. As Mr Thomas Chua mentioned during the Budget debate, SMEs need to have the correct mindset and must want to transform. By working with TACs, we want to foster a stronger spirit of self-reliance within our local enterprises.
(In English): Mr Lim Biow Chuan has asked if more protection for consumers can be legislated. The CPFTA is regularly reviewed to ensure that it continues to provide consumers with adequate protection. We started our review last year and have engaged industry, including CASE, for their views. We are nearing the end of this review and intend to start public consultations soon.
Let me respond to Mr Lim Biow Chuan's specific points. First, our proposed enhancements to the CPFTA will include strengthening the injunction framework to prevent errant retailers from side-stepping injunction orders, and appointing an administering Government agency with investigation and enforcement powers. Those who engage in criminal activities, such as outright cheating, will continue to be investigated by the Police under the Penal Code.
Secondly, to mandate that businesses put prepayments into escrow accounts will raise business costs which, unfortunately, would ultimately be passed on to consumers. Instead, consumers can protect their prepayments by choosing retailers that are CaseTrust-accredited. Most CaseTrust-accredited retailers provide protection for consumer prepayments. We encourage more TAs to work with CASE on accreditation schemes to better safeguard consumers' interests.
Thirdly, the CPFTA provides the same protection to consumers, whether their purchases are made online or from our regular brick-and-mortar retailers. On practices, such as pre-ticked boxes and arbitration clauses, the CPFTA already requires retailers to make material information clear to consumers prior to these transactions. We are working with CASE to educate consumers on the importance of reading the terms and conditions before finalising the transaction.
Fourthly, MTI has engaged CASE on making information on petrol prices and discounts more accessible to consumers. CASE is working towards putting such information on their website.
Mr Chairman, in conclusion, economic restructuring is a long-term effort which cannot be put on hold. SMEs must make use of every opportunity to upgrade their capabilities. The Government, too, needs to work closely with the industry on this and, hence, needs to strengthen our partnership with TACs. I am confident that we will emerge from our challenges a stronger economy, with our SMEs more competitive than before.
The Chairman: Parliamentary Secretary, Trade and Industry.
The Parliamentary Secretary to the Ministers for Trade and Industry (Ms Low Yen Ling): Mr Chairman, I would like to thank Members for their comments and suggestions.
The Minister for Trade Mr Lim Hng Kiang, the Minister for Industry Mr S Iswaran and the Minister of State Dr Koh Poh Koon, have explained how our economic strategies will prepare us for the future and create good jobs for Singaporeans. I will now round up MTI's speeches by elaborating on the initiatives specific to renewable energy and manpower that will position Singapore for the future.
Mr Louis Ng asked about the steps we are taking to achieve our renewable energy goals. Given our geography, solar energy is the most viable form of renewable energy in Singapore. The Government is, therefore, proactively facilitating the greater deployment of solar energy while ensuring grid stability.
For example, the Government is funding R&D to facilitate the deployment of solar energy and has streamlined regulations for households using solar power. Alongside improvements in the cost competitiveness of the technology, these have allowed solar adoption to rise from two megawatt peak (MWp) in 2009 to 57 MWp in 2015.
Under the SolarNova programme led by EDB and HDB, the Government is also taking the lead to accelerate solar deployment in Singapore by aggregating solar demand across various Government agencies. HDB, the Ministry of Home Affairs and the Public Utilities Board awarded a tender for an energy supplier to meet 76 MWp of combined demand in December last year, and tenders of 30 to 50 MWp sizes are expected to be launched around every nine months by HDB on behalf of the public agencies. The SolarNova programme will play a key role in furthering our plans to raise solar energy deployment in our system.
Let me now turn to manpower. I would like to thank Mr Liang Eng Hwa for highlighting the importance of our SkillsFuture movement in enabling our workforce to adapt and be future-ready for the future economy. To make this happen, we need everyone to be part of this movement − companies, unions, TACs and all Singaporeans. Together, we equip ourselves to stay competitive and relevant.
We need to attune ourselves to new work trends emerging from disruptive technologies and global developments. Like what the two Ministers have highlighted, there are now jobs in exciting new areas, such as fintech, that did not even exist just a few years ago. The digital economy is also flourishing. According to a report by Accenture, the increased use of digital technologies could add at least $1.36 trillion to the total global economic output in 2020. This has led to new job opportunities in fields like data analytics and e-commerce.
These fast-moving developments are changing the way we work. Today, operators in routine assembly work may also have to master the use of advanced technologies, such as additive manufacturing and robotics solutions. Across various sectors, jobs are being optimised through technology solutions. As Mr Liang Eng Hwa rightly said, we should gear ourselves to ride the waves of change and seize the opportunities of the future economy.
Mr Chairman, may I have your permission to display some slides on the LED screens, please?
The Chairman:\tYes. [Some slides were shown to hon Members.]
Ms Low Yen Ling: Take the example of Ms Lilian Yeo, a 58-year-old sales supervisor for Decks. Decks is the retailer for Surfers Paradise and Island Shop products. Decks has adopted radio frequency identification (RFID) for both its front- and back-of-house operations. Lilian's can-do spirit helped her adapt and learn this new technology. She is now adept at using RFID and appreciates how technology has eased her job and given her more time to focus on frontline duties like serving and interacting with customers. So, like Ms Lilian Yeo, we need to be flexible and stand ready to be trained to develop industry-relevant skills.
To stay ahead of the curve, we must continue to train and produce workers with skills that meet the demands of industries. We can open the doors to a better future by embracing the spirit of lifelong learning. Please allow me to give the House a quick update on the various SkillsFuture initiatives that support Singaporeans on this constant journey, starting with our youths, then the working adults and then businesses.
We fully agree with Mr Sitoh Yih Pin that one of the ways to engender the development of deep skills is through apprenticeships, particularly for our SMEs. To this end, MTI supports the SkillsFuture Earn and Learn Programme (ELP). ELP is a work-study programme matching our fresh graduates from polytechnics and ITEs to suitable companies, including SMEs, in sectors related to their disciplines of study. This not only helps companies to attract talent; it also allows participants to develop deep industry-relevant skillsets during their apprenticeships.
Besides apprenticeships for our youths, we must also nurture in them a curiosity and desire for global exposure. This can certainly support our companies' internationalisation drive as we grow the pool of talents in our workforce ready with the necessary skillsets to support our external economy. The ability to work in international teams and harness cross-cultural capabilities are some of the skills that are offered in the Young Talent Programme (YTP) by IE Singapore.
To prepare them for global careers, YTP offers our students opportunities for overseas immersion through internships and work-study programmes. In November last year, IE Singapore officially extended the YTP-Market Immersion Programme to the polytechnics. Since then, about 200 polytechnic students have gone to China, Germany, the US and the ASEAN countries. I am pleased to report that we will implement the programme in ITEs later this year as well. This will provide more opportunities for our students to gain international exposure.
Our young people will learn how to navigate across cultures and differences. This picture shows Mr Raiyan Muhammad bin Musa from Ngee Ann Polytechnic with some of the friends that he met during his internship at The Ascott Limited in Vietnam. Besides these friends, Raiyan shared with us that he had colleagues from France, the UK, India and Malaysia. During the internship, Raiyan learnt how to connect across cultures and nationalities in the workplace. Such experiences during the formative years will give our young people a potential head start into a global career.
In addition to building young talent for global jobs, we are also grooming promising Singaporeans to take on leadership positions through the SkillsFuture Leadership Development Initiative (LDI). It aims to grow a pipeline of Singaporean leaders across all career levels. As part of LDI, EDB has been partnering companies to design and implement leadership development roadmaps tailored to their business objectives and HR priorities. For example, MasterCard's Management Associate Programme has an overseas stint in emerging markets that provides fresh graduates with global exposure and in-market experience across key business units. Upon completion of the programme, the management associates will be better positioned to take on larger roles in the company.
We all know talent is key for businesses, big or small, to grow and succeed. For SMEs that may not have the resources to build up their talent development and worker competencies, we have created the SkillsFuture Mentors Programme under SPRING Singapore. The agency works with industry partners to build a pool of mentors who support the development of SMEs' capabilities and help them participate in SkillsFuture initiatives. Since its launch in December last year, 70 mentors have been qualified and 15 SMEs have been matched in sectors, such as retail and engineering. Over the next three years, we aim to build up a pool of 400 mentors to support 2,000 SMEs across different sectors. Moving forward, the Government will continue to invest in SkillsFuture to ensure that our workers and companies are well-positioned to meet the challenges of the future. Mr Chairman, please allow me to continue in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Upskilling is key to the vitality of our economy. It is not only a means to future-proof our workers, but also a key facet of industry transformation. As the Minister for Finance and Minister for Trade and Industry (Industry) have explained, ITP will integrate our restructuring efforts in productivity, innovation and manpower development at the sectoral level to maximise impact.
An integral element of this plan is the Sectoral Manpower Plans (SMPs), which identify the strategies and action plans required for developing sector-specific skills. Last year, SMPs were launched in sectors, such as hotel and retail, setting out five-year manpower strategies that support the growth of these sectors.
SMPs are developed and implemented together with Sectoral Tripartite Committees (STCs), consisting of unions, TACs and companies. The strategies under the Hotel SMP, for example, are being implemented on the ground in partnership with STB, the Workforce Development Agency, hotels, the National Trades Union Congress, the Food, Drinks and Allied Workers Union (FDAWU) and the Singapore Hotel Association (SHA).
Through consultations and discussions with various partners, SkillsFuture aims to strengthen the nexus between the needs of industries and manpower development.
There are also many other ways that our companies can be part of the SkillsFuture movement. Besides providing training opportunities, our companies can also offer competency-based career progression pathways to motivate and retain talent.
Take, for example, Tee Hai Chem, a local company that sponsors high-performing employees on part-time diploma studies. Tee Hai told us that they believe that people are their most important asset and that all their staff are given equal opportunities to upgrade their skills and knowledge. Mr Kelvin Ong joined the company in 2010. He started out not knowing much about logistics. But Tee Hai recognised his good performance and potential and sponsored him to study a part-time Diploma in Logistics Management. I am heartened to learn that, after starting out as a storekeeper, Kelvin is now a logistics supervisor at the company. Indeed, Kelvin's success is not just his own, but also the company's.
Here, MTI would like to encourage our companies to be long-sighted as well as courageous to innovate and transform, so that they will be well-placed to compete on the international stage. Besides using technology to improve efficiency, companies must be willing to redesign jobs, train their staff and help them upskill. In time to come, with increased productivity, their revenues will also increase.
From the employees' point of view, the opportunity to take on higher-skilled and higher-value jobs will mean greater job satisfaction and better wages.
Companies that invest in their employees' training and development will be well-positioned to take on the new challenges of our new economy. We would like to see more companies like Tee Hai Chem who invest in their employees for the future. Allow me to conclude in English.
(In English): We understand skills upgrading takes effort and may not be easy for all, especially for mature workers. But successful upskilling is possible at any age when one is armed with a positive and can-do attitude. Take Mr Mohammad Romzi Bin Kassim, for instance. The 46-year-old employee at PestBusters has upgraded his knowledge and skills by attending several technical and WSQ training courses. In just six years, Romzi has been promoted three times from a pest control technician to being an executive. And he does not intend to stop learning. He is keen to hone his craft with technology and has been selected to learn best practices in pest control work in Melbourne under Mediacorp's sponsorship. Romzi's proactive approach towards learning certainly exemplifies SkillsFuture's spirit of passion for lifelong learning.
Mr Chairperson, the Government remains committed to supporting the development of our workforce. But we cannot do this alone. Lilian, Raiyan, Kelvin and Romzi have shown us that all of us can take ownership of our own training and career paths. We call upon our partners and every Singaporean to come on board the SkillsFuture movement. Together, we will build a future-ready workforce empowered to overcome challenges and stay on track for success in the global economy.
The Chairman:\tClarifications from Members, if any? Mr Liang Eng Hwa.
Mr Liang Eng Hwa: Well, I applaud the Government's move to establish the cluster champions consisting of teams of officers from the public sector rolling up their sleeves and fast-tracking the transformation of about 20 sectors. That is a tremendous effort, accounting for about 80% of our economy. But also, it requires the officers to adopt a new approach of working beyond just within the service. As the Government, you work in a Government agency; but, now, to work with the markets, you work with the businesses.
So, in terms of resourcing and organising, I would like to ask the Minister how does the Ministry at this stage set up the headcount that is needed, the changes in terms of the different agencies to be able to drive this sector roadmap that was introduced by the Finance Minister?
Mr S Iswaran: Sir, I thank the Member for his clarification. As I stated, and as we all acknowledged, it is a major task and it will require a coordinated effort across various stakeholders – companies, TACs, Centres of Innovation and also in terms of the unions. We will be appointing cluster champions from our various Statutory Boards for some of these key sectors.
What we propose to do is that, in the time-honoured tradition of financial prudence, we will start by working within what we already have. But, of course, where necessary, and it may well be necessary, we will then seek assistance from the MOF.
The Chairman: Mr Leon Perera.
Mr Leon Perera: Mr Chairman, in his Budget wrap-up speech, the Minister of Finance referred to the Holistic Industry Productivity Scorecard (HIPS) system that is run by SBF, which provides a calculator of productivity and allows companies to log on to the system, input some data, calculate the productivity level and benchmarks the productivity level against certain industry norms.
If I recall correctly, the Minister for Finance said that there are roughly 80 companies currently using this HIPS system from SBF. He said this in response to my suggestion for a national productivity benchmarking system. So, I would like to ask MTI whether they will be working with SBF, perhaps to take this tool and push it out to all the companies that we have. I believe that we have 180,000 businesses and companies. SBF's target is to get 30,000 of them onto HIPS by 2020. So, that still leaves many, many more companies that have not been using the system.
If SBF achieves that target, will the Government actually work with SBF to push out this tool, as a benchmarking tool, not just against industry norms and Singapore, but also industry norms globally, so that our SMEs can have a very clear quantifiable view of what they can achieve, what they can aspire to achieve in terms of productivity?
Dr Koh Poh Koon: Mr Chairman, I thank the Member for his question. The Government has been working closely with SBF on many initiatives and we will continue to do so. As far as productivity benchmarking is concerned, there are various benchmarks that can be utilised.
The Government publishes labour productivity benchmarks, such as value-added per worker and value-added per actual hour worked. The Government also publishes sector-specific outcome indicators, such as site productivity for the construction sector. Other than the benchmark that the Member has mentioned, companies can also use the calculator on the \"Way to Go\" website to determine their productivity and compare it against other benchmarks.
The Government's productivity assistance schemes are intended to support all companies and we will continue to utilise benchmarks that are useful for us to assess the productivity of companies.
Ms Foo Mee Har:\tWith the great initiative to second public officers to TACs to help them deepen their knowledge and to support TACs, I would like to ask the Minister whether the decision-making and empowerment of these officers would be enhanced, so that they can truly do something meaningful, for example, to tailor-make schemes for these sectors? Also, if they are empowered, what is the decision-making process so that they can get things through quite quickly, so that the TACs which have got a good plan, can get on with it?
Mr Lim Hng Kiang:\tThe key in seconding public officers to TACs is to strengthen their secretariat because we recognise the key to a successful implementation requires the secretariat to be reinforced. We have to work very carefully because, as we all know, TACs differ very significantly. Many of the TACs have adequately resourced secretariats already. What we need to do is to work with them to strategise and to work out the sectoral plan. Some TACs require reinforcement. This is the area where the secondment of the 20 public officers will make some impact. Then we will have to see how it goes. Based on the experience of working with these TACs, we will have to then amend and adapt our plans accordingly.
The Chairman:\tMr Liang Eng Hwa, please go ahead.
Mr Liang Eng Hwa:\tThe Minister did talk about the benefits of TPP. Clearly, quite a list of things that our businesses can benefit from. We know that TPP is now political football, as we observe the US elections. I would like to ask the Minister whether he still sees hope that we can get this ratified in the US administration and Congress and whether we should now bank on RCEP instead, given that we are likely to have an agreement this year and, hopefully, the smooth ratification as well. Given that we also have a US-Singapore FTA, with that FTA plus RCEP, without TPP, does it impact us that much? I wish to hear the Minister's views on this.
Mr Lim Hng Kiang: We have all been following the progress of TPP in the various countries, all 12 of us. The good news is that the Japanese are proceeding to get TPP ratified in their Diet before July, before the Upper House's elections.
For the US, they have been telling us that they are very deeply engaged with the Congress leadership. They have very good experience taking the Trade Promotion Authority, the fast-track authority, through Congress. They know roughly where the votes lie – both in the House as well as the Senate. They are having very close links with the congressional leaders in the different groups to see whether this vote pool is still valid for the next step of ratification. So, we are watching the developments.
As I had mentioned in my speech just now, although we have the bilateral US-Singapore FTA, the TPP adds on to this, because, for one, the TPP gives us a free trade agreement with Canada and Mexico, which we do not have bilateral FTAs with thus far. But more importantly, the TPP gives us better market access because of regional cumulation. I gave the examples of automotive components and textiles and garments. Singapore companies can now source from TPP countries and this is then added on to qualify for the rules of origin to enter preferentially into the TPP markets.
So, even though we may have the US-Singapore FTA, the TPP adds a new dimension and more market access. Therefore, it is very important for us to have the TPP ratified as soon as possible so that our companies can benefit from the TPP.
On the RCEP, it is a very different set of dynamics, because we have the ASEAN countries and the six ASEAN+1 dialogue partners. As we know, with the dialogue partners – Australia, New Zealand, China, Japan, Korea and India – the dynamics are very complicated. For example, to get the RCEP resolved, you have to solve the bilateral dynamics between India and China, just to illustrate. So, it is not a simple task where we can get to a successful conclusion of RCEP by the end of the year. We still need many, many more steps to get there.
As to the dynamics between TPP and RCEP, it is quite obvious that when TPP was concluded, there was greater pressure on RCEP participants to get RCEP also concluded. If we do not ratify the TPP, then I am very concerned that the pressure on RCEP may be lifted. RCEP participants may not feel the same pressure to get it concluded. This is already in addition to the very complicated political dynamics within the 10+6 participants of RCEP.
Mr Low Thia Khiang:\tMr Chairman, since the TPP and RCEP are so complicated, are we looking at some other alternatives? China recently has announced \"One Belt One Road\" as a new macroeconomic strategy. Is MTI looking into how Singapore can position itself to take advantage of the new economic strategy?
Mr Lim Hng Kiang: Our strategy for China is very comprehensive. We have a bilateral FTA which we are in the process of reviewing and improving. That is the bilateral Singapore-China FTA.
We have an ASEAN-China FTA, which also presents quite a lot of additional benefits to us. Last year, we just concluded an upgrade of the ASEAN-China FTA. Over and above this, we have the RCEP. The reason why I consider the RCEP very important is, as I had explained in my speech just now, in North America, you have NAFTA, and that makes it very difficult for us to break into NAFTA, because the supply chain of the US, Canada and Mexico is very closely integrated.
So, when we have TPP, we are now able to be part of that bigger ecosystem. As I had mentioned, our automotive components companies now have a fair chance of breaking into the automotive market in the US and compete with Mexico and Canada.
In Asia, there is a potential NAFTA-equivalent if China, Korea and Japan conclude their trilateral FTA. If that happens, Singapore will be excluded. So, it is very important for us to have the RCEP, so that we are part of the 10+6, so that we are also part of a bigger market and a bigger ecosystem. As I had emphasised in my speech just now, our trade policy must be inclusionary. We should not be left out, because we want market access to as many markets as possible.
Mr Chen Show Mao:\tI thank the Minister of State for his answer and his advice to wait and see on the declining trend in business rental. He mentioned that JTC has only 18% of the industrial space for rent and, therefore, does not have much influence over the rent of industrial space. I would like to ask the Minister of State whether JTC would consider increasing that percentage through the provision of additional, new, low-cost industrial space.
Dr Koh Poh Koon:\tMr Chairman, I thank the Member for his clarifications. As mentioned in my speech earlier, there will be 2.3 million square metres of industrial space that will come on stream annually in the next two years. I think market forces would allow rentals to soften over the next couple of years. With the supply of retail and industrial space coming up, I do not think we are in any position to add to the supply.
The Chairman:\tIf there are no other clarifications, Mr Liang, would you like to withdraw your amendment?
Mr Liang Eng Hwa: Thank you, Mr Chairman. In this year's Budget, clearly, the word \"transformation\" is key. It is mentioned so many times – as well as \"industry transformation\". These are obviously the priority items in this year's Budget. And thereafter, we will have the CFE where, again, MTI will be all hands on deck to push ahead with the transformation. Minister Iswaran mentioned about the formidable task ahead and we empathise with the responsibility on MTI's shoulders. I just want to say that MTI and the family of agencies should draw on the inspiration of the power-packed Transformers, since they are transforming the economy, and then charge ahead.
With that, we wish you all the best and we are with you. I want to thank Minister Lim, Minister Iswaran, Minister of State Koh Poh Koon and Parliamentary Secretary Low Yen Ling for their replies. I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $924,799,100 for Head V ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $5,662,788,200 for Head V ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply Reporting Progress","subTitle":null,"sectionType":"OS","content":"The Minister for Trade and Industry (Trade) (Mr Lim Hng Kiang):\tSir, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?
The Chairman: I give my consent.
[(proc text) Resolved, \"That progress be reported now and leave be asked to sit again tomorrow.\" – [Lim Hng Kiang]. (proc text)]
[(proc text) Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Mr Lim Hng Kiang:\tMr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2016/2017 and ask leave to sit again tomorrow.
Mr Deputy Speaker: So be it.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Adjournment","subTitle":null,"sectionType":"OS","content":"[(proc text) Resolved, \"That Parliament do now adjourn.\" – [Ms Grace Fu Hai Yien.] (proc text)]
Adjourned accordingly at \t7.35 pm.
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