§ Sir D. Campbellasked the Secretary of State for the Colonies whether he will make a statement on his recent discussions with the Finance Minister of the State of Singapore.
§ Mr. Iain MacleodMy noble Friend the Minister of State and I have had most useful and friendly discussions with Dr. Goh Keng Swee, the Minister for Finance, and a delegation from the State of Singapore. We were very glad to welcome them to London
Her Majesty's Government recognise that the State of Singapore, whose population is amongst the youngest of any in the world, will undoubtedly require substantial help in financing a development programme on the scale necessary to enable the State to keep pace with the needs of its growing population. The discussions have shown that, on the assumption that maximum possible use is made for Singapore's own resources both internal and external during the first two years, the need for external 253W finance is likely to be greater in the later stages of its new Five Year Plan than in the earlier years.
The Singapore Government were anxious, in addition to obtaining financial assistance in respect of their armed farces, to make provision for the financing of the whole of the Five Year Plan. Her Majesty's Government are however unable, in view of the terms of the current Colonial Development and Welfare Act, to promise specific amounts of aid to Singapore's Development Plan beyond the period covered by that Act. In regard to the financing of the Plan, therefore, Her Majesty's Government have concentrated their attention on the earlier years and, taking into account also the request for assistance towards the cost of Singapore's armed forces, have undertaken now subject to Parliamentary authority as necessary, to provide the State of Singapore with grants and loans totalling £7.6 million, of which £2.6 million will be in the form of grants. The bulk of this assistance, namely £6 million, will be provided towards the financing of the Development Plan, including expenditure on the airport.
Her Majesty's Government's assistance towards Singapore's armed forces will be by way of a contribution of £500,000 a year towards the recurrent cost of the Singapore Military Forces and of half the recurrent cost of the Singapore Division of the Malayan Royal Naval Volunteer Reserve. This arrangement reflects Her Majesty's Government's recognition of the dual interest of both Governments in these forces. It will apply to the three years 1961–63 and will be reviewed at the end of that period.
Her Majesty's Government recognise that further assistance is likely to be needed in the later years of the Development Plan, and I have informed Dr. Goh that, subject in due course to the approval of Parliament as may be necessary, it would be the intention of Her Majesty's Government to make a further contribution. In other words, the contribution of £6 million may be regarded as the first instalment of Her Majesty's Government's assistance towards Singapore's Five Year Development Plan. It has accordingly been agreed that further talks should be held at the beginning of 1963 to consider the progress made with the Plan, and the needs of the State of Singapore for further overseas finance.