Monday, 20 August 2018

National Day Rally 2018

New Merdeka Generation Package to help 500,000 Singaporeans born between 1950 and 1959 with healthcare costs

All Singaporeans with chronic conditions to qualify for Community Health Assist Scheme (CHAS), regardless of income

New Voluntary Early Redevelopment Scheme (VERS): Owners in flats aged 70 years and older can vote for the Government to buy back their homes before their leases run out

All HDB flats will be upgraded twice during 99-year lease under expanded Home Improvement Programme

PM Lee explains why HDB leases are 99 years long

Government will do its part to alleviate concerns about cost of living

Singapore to nominate hawker culture for listing on the UNESCO Representative List of the Intangible Cultural Heritage of Humanity

Singapore-Malaysia relations:  Room for discussion on High Speed Rail, but Water Agreement is “sacrosanct”

8 things you need to know from Prime Minister Lee Hsien Loong's National Day Rally Speech
By Yuen Sin, The Straits Times, 19 Aug 2018

Prime Minister Lee Hsien Loong, in his National Day Rally address on Sunday (Aug 19), highlighted challenges faced by Singapore at home and abroad such as trade tensions, cost of living pressures, and in healthcare and housing.

He elaborated on how the Government will provide support for Singaporeans in areas like healthcare and public housing, and how Singaporeans can work with the Government to anticipate the country's needs and opportunities in the long-term future.

Here are eight key takeaways from his speech.


More owners of older HDB flats will get a shot at going en bloc before their leases run out, with a new scheme called the Voluntary Early Redevelopment Scheme (VERS).

Under VERS, these residents in eligible precincts can vote to have the Government take back their flats, starting from around the 70-year mark of their lease.

The move will also allow the authorities to progressively redevelop old estates over a longer period, instead of only when their leases expire.

But he added that the compensation terms will be less generous than those for the Selective En bloc Redevelopment Scheme (SERS), which acquires ageing blocks with high development value for redevelopment and compensates residents at market rates for their old flats.

This is because there is less financial upside for the Government to take back these flats early.

Only 5 per cent of flats are estimated to be eligible for SERS.


The Housing Board's Home Improvement Programme (HIP), which heavily subsidises the costs of fixing maintenance problems of ageing flats such as spalling concrete and structural cracks, will be expanded to cover newer blocks.

Previously, it covers flats built up to 1986. It will now be extended to those built up to 1997, benefiting another 230,000 flats in estates such as Pasir Ris, Yishun, Tampines and Jurong.

This kicks in when the flats are about 30 years old. Another scheme - HIP II - will be launched when the first flats reach 60 to 70 years old about a decade from now.

This means that every HDB flat can expect to be upgraded twice during their 99-year lease - once when they are about 30 years old, through the Main Upgrading Programme or HIP, and a second time through HIP II when they are about 60 to 70 years old.

The first HIP will cost the Government more than $4 billion and HIP II will probably cost more than that, as the flats will be twice as old. But this expenditure is well justified, said PM Lee, and the Government will do it as long as the Ministry of Finance has the money.


In recognition of their contributions during Singapore's early years of independence, those born between 1950 and 1959 will be given a Merdeka Generation Package, said PM Lee.

Some 500,000 Singaporeans - mostly in their 60s - will benefit, with additional support to meet their medical expenses, such as outpatient subsidies, Medisave top-ups, MediShield Life premium subsidies and payouts for long-term care.

These are similar areas as what those born in 1949 or earlier got in the Pioneer Generation Package (PGP), announced in 2014.

The Merdeka Generation Package benefits will not be as large as the PGP, as the pioneers had fewer advantages in life, said PM Lee. But, he added, it will go some way in relieving the concerns that this generation may have about healthcare costs. More importantly, it will show appreciation for their contributions.


The Community Health Assist Scheme (CHAS), which provides healthcare subsidies for middle and lower-income Singaporeans and the Pioneer Generation, will be extended to all Singaporeans with chronic conditions, regardless of income, PM Lee announced.

The benefits will continue to be tiered according to income, and the Ministry of Health will announce further details later.

This can help Singapore's ageing population, said PM Lee, as more Singaporeans will have chronic conditions like diabetes or high blood pressure as they get older, which will incur regular medical bills.


The international system is at a turning point, with mounting trade tensions between the United States and China and the US and Europe arguing fiercely over trade and defence spending, said PM Lee.

He warned that there is uncertainty over whether new rules and norms for international cooperation will form after a while, or if there will be prolonged tension and suspicion, mutual rivalries and hostile blocs.

While Singapore cannot be confident that the major powers will continue to work with one another, or if the existing international system will still hold, said PM Lee, it hopes that all countries will act with restraint and wisdom, overcome the current challenges, and find a new way to move forward together.


While Malaysia has seen a historic change in government during its last general election, which saw the Pakatan Harapan coalition led by Tun Dr Mahathir Mohamad take over from the Barisan Nasional coalition, the fundamentals of Singapore's relationship with Malaysia have not changed, said PM Lee.

The two countries, bound by ties of kinship, history, geography and economy, must work together to tackle common challenges, and find constructive ways to resolve their differences when their interests diverge, he said.

PM Lee touched on two policies that Dr Mahathir's government wants to review after taking over - the High Speed Rail (HSR) and the Rapid Transit System (RTS) Link to Johor, and the 1962 Water Agreement.

On the former, PM Lee said that Singapore entered the two projects in good faith after careful negotiations because they benefited both countries. He added that both Singapore and Malaysia have to carry out what has been agreed to under the legally binding bilateral agreements, unless both sides mutually agree to vary the terms.

On the 1962 Water Agreement, PM Lee reiterated Singapore's view that the pact is sacrosanct, and that its terms must be followed with strictly.

Under the current agreement, which expires in 2061, Singapore is entitled to draw up to 250 million gallons a day (mgd) of raw water from the Johor River at 3 sen (1 Singapore cent) per 1,000 gallons.


Singaporeans are feeling cost of living pressures, acknowledged PM Lee.

He offered four reasons why they feel this way:

- young families are worried about housing and pre-school education

- the sandwiched generation looking after both children and older parents worry about education and healthcare costs

- Singaporeans are spending more on items such as mobile phones and overseas holidays to sustain a higher quality of lifestyle

- inflation which has led to price increases.

PM Lee also noted that while overall wages have increased, some have had wage stagnation while others have lost their jobs. Retirees are also worried about savings running out.

On price increases, PM Lee said that while the Government has tried to keep inflation low and prices stable, price increases for some resources such as water and electricity tariffs cannot be completely avoided as Singapore faces resource constraints.

Some price increases are also a matter of perception, he added, as people tend to remember increases vividly but not price decreases.

The Government will make sure that housing, healthcare and education are kept affordable, but Singaporeans will also have to do their part to watch their expenditure by saving water and electricity, and making smart consumer choices, he added.


Singapore will nominate its hawker culture to be inscribed on the UNESCO Representative List of the Intangible Cultural Heritage of Humanity, PM Lee announced in his Mandarin speech.

If successful, it will be Singapore's second inscription, after the Singapore Botanic Gardens was declared a UNESCO World Heritage site in 2015.

Putting Singapore's hawker culture on the list of intangible cultural heritage will help to safeguard and promote this unique culture for future generations, said PM Lee.

All HDB flats will be upgraded twice under expanded Home Improvement Programme
Govt will also launch voluntary scheme to redevelop precincts in 20 years' time
By Royston Sim, Deputy Political Editor, The Straits Times, 20 Aug 2018

Every Housing Board flat will be upgraded twice in its 99-year lifespan, as the Government extends an existing programme to cover more flats and unveils plans to roll out a new one in future.

Prime Minister Lee Hsien Loong yesterday announced that the Home Improvement Programme (HIP) will now cover housing blocks built up to 1997 that reach about 30 years of age. It is currently offered to flats built up to 1986.

This will benefit another 230,000 flats in Tampines, Pasir Ris, Yishun, Jurong and other housing towns.

A new multibillion-dollar programme - HIP II - will be launched in 10 years' time, to cover all flats that are 60 to 70 years old and upgrade them a second time.

"HIP II will keep the flats safe and liveable, and also help them to retain their value as their leases run down," said Mr Lee, who delivered his 15th National Day Rally at the Institute of Technical Education (ITE) College Central campus.

"And it should see the flats through to the end of their leases."

In the longer term, more residents in ageing HDB towns will have the option of selling their flats to the Government before the leases expire.

The Prime Minister unveiled the Voluntary Early Redevelopment Scheme (VERS), which will allow residents in selected precincts to vote on whether to take up the Government's offer to buy back their flats.

Housing experts said the three initiatives - HIP, HIP II and VERS - could help address concerns over the hot topic of expiring leases, as the Government is taking steps to preserve the value of ageing flats.

Under VERS, the Government will progressively take back flats that reach about 70 years of age, and redevelop older towns over two to three decades.

Mr Lee said planning for VERS will begin now, but the scheme will start only 20 years down the road.

"We need time to work out how to select the precincts, how to pace the redevelopments out, the specific terms of the Government's offer and so on," Mr Lee said.

Currently, the Government acquires certain older flats with high redevelopment value through the Selective En bloc Redevelopment Scheme (SERS). Only an estimated 5 per cent of flats are suitable for SERS, and there are only a few more of such projects left.

VERS will allow more households to benefit from redevelopment, but the terms will be less generous than SERS "because there will be less financial upside", Mr Lee said.

On expiring leases, Mr Lee said 99 years is actually a very long time.

Those who buy a new flat in their early 30s will still have more than 60 years of lease left when they retire, he noted. "That is long enough for it to retain substantial value, and be a good retirement nest egg."

He also gave the reassurance that the Government will help HDB residents whose leases expire to get another flat. This could be a new Build-To-Order flat, a resale flat or a two-room flexi flat.

They will have to pay for a new lease, regardless of which housing option is chosen, he added.

The Government's various plans to improve public housing and healthcare will require large expenditures and span several generations, Mr Lee noted.

"Very few countries can make such long-term plans, and anticipate needs and opportunities into the distant future. But in Singapore, we can, and we will," he said.

"This Government believes it owes it to you to look ahead, share our thinking with you, pool our ideas, and work with you to make it happen."

'Merdeka Generation' to get healthcare help
By Salma Khalik, Senior Health Correspondent, The Straits Times, 20 Aug 2018

About half a million Singaporeans - those born in the 1950s - will receive help from the Government with their medical expenses.

Announcing a new multibillion-dollar package to help this group, dubbed the Merdeka Generation, Prime Minister Lee Hsien Loong pledged that "a significant sum" will be set aside for this purpose.

The Merdeka package will cover similar ground as the $8 billion Pioneer Generation Package which was given in 2014 to those born in 1949 or earlier. This comprised outpatient subsidies, Medisave top-ups, MediShield Life premium subsidies and payouts for long-term care.

Although the Merdeka Generation will get lower benefits than those for the Pioneers, what they will get "will go some way to relieve their healthcare worries", said Mr Lee.

Details of the package will be released next year.

Noting that while members of the Merdeka Generation were too young to participate in the events leading to Singapore's Independence in 1965, they "lived through the battles and upheavals of the Merdeka struggle", and grew up understanding what was at stake. "They accepted hardships, made sacrifices, answered the call of duty and worked with their leaders to build a better tomorrow."

The men were among the earliest batches who served national service, while many left school to start work early, especially women, to support their families and siblings, he noted.

"I think we owe something to them," he said at the National Day Rally yesterday, drawing applause.

Healthcare is one of the areas in which the Government "will spare no effort" to help citizens, Mr Lee promised in his speech, pledging that "no one should be denied medical care because they could not afford it."

"This is my commitment to you," he said.

Mr Lee also announced that the Government will extend subsidies to all Singaporeans with chronic ailments who are getting treatment in the private sector. They can get a Community Health Assist Scheme (CHAS) card which lets them get treated by private doctors while enjoying government subsidy.

Now, about one million Singaporeans who qualify through means testing, and the Pioneer Generation, get such subsidy. Going forward, it will be extended to all with chronic ailments regardless of income.

Benefits will be tiered according to income. Now, those with the blue card get up to $480 a year for the treatment of chronic conditions, while those with the orange card get up to $300.

Managing chronic conditions well will allow people to live a full life, said Mr Lee, adding: "I think all of us will appreciate a little bit of help with the regular medical bills for such chronic conditions."

PM Lee explains why Govt is offering medical subsidies, top-ups to Merdeka Generation
Merdeka Generation accepted hardships, made sacrifices
Together with pioneers, group born between 1950 and 1959 contributed to building Singapore
By Salma Khalik, Senior Health Correspondent, The Straits Times, 20 Aug 2018

Four years after launching the $8 billion Pioneer Generation Package which helps 450,000 Singaporeans with their healthcare needs, the Government is now turning its attention to those born a decade later.

These 500,000-plus Singaporeans, born between 1950 and 1959, currently get $100 to $200 in annual Medisave top-ups.

But a Medisave top-up is not the same as the Pioneer Generation Package, said Prime Minister Lee Hsien Loong at the National Day Rally yesterday, adding: "We have not forgotten this group."

He then announced a new Merdeka Generation Package for Singaporeans born in the 1950s, most of whom are now in their 60s and have left the workforce or will soon be retiring, and have similar health concerns as the pioneers.

Like with the pioneers, the Government will help them with outpatient subsidies, Medisave top-ups, MediShield Life premium subsidies and payouts for long-term care.

But the benefits will not be as large as those offered to the Pioneer Generation, since those from the Merdeka Generation are generally better off than their seniors.

Details will be announced later, but Mr Lee said that a "significant sum" has been set aside for this.

Explaining why the Government is extending this helping hand, he said that the Merdeka Generation lived through the tumultuous years of the 1950s and early 1960s as Singapore first struggled for independence from the British till it gained full independence in 1965.

"Singapore politics was fiercely fought, over different visions of the colony's future. In 1959, Singapore gained internal self-government, one big step towards independence," he said.

The People's Action Party won the General Election in 1959 and formed the Government for the first time. Then came the split with the communists, merger with Malaysia, separation and independence. "For those born in the 1950s, these were indelible, formative experiences that shaped them for life," said Mr Lee.

Although they were too young to take part in the events of those years, "most were old enough to sense the electricity in the air, to share the excitement of the changes, to feel the hope of a brighter tomorrow".

They heard the rallying cry of Merdeka:freedom and independence. "One word that expressed the determination and passion, the ambitions and aspirations, of a people who were roused and on the march," he said.

And seldom have people been more roused than on June 3, 1959, when the then newly elected Prime Minister Lee Kuan Yew told a huge rally crowd at the Padang: "Once in a long while in the history of a people, there comes a moment of great change. Tonight is such a moment in our lives." A video clip of this was shown to the audience. Mr Lee, looking emotional, said he was proud to be part of the Merdeka Generation.

This group, he said, "accepted hardships, made sacrifices, answered the call of duty and worked with their leaders to build a better tomorrow".

They lived through the battles and upheavals and saw how their parents "scraped and slogged for them". When they grew up, they understood instinctively what was at stake.

The men were among the first batch of national servicemen, many of the girls could not complete their education, and all started working at a time when wages were low.

Together with the Pioneer Generation, they contributed to building Singapore. But because they were younger, they were generally better educated and benefited from an extra decade of economic growth.

They earned more, and saved more in their Central Provident Fund (CPF) accounts, than the pioneers, said Mr Lee. "But of course, the cohorts that came after them did even better."

The Merdeka Generation, he said, have similar healthcare concerns as the pioneers and now "are looking at their CPF savings and Medisave accounts, worried about having enough for their medical needs as they grow older".

Said the Prime Minister: "I think we owe something to them."

More polyclinics to be built to provide more affordable primary care
By Linette Lai, Health Correspondent, The Straits Times, 20 Aug 2018

By 2023, there will be six more polyclinics in Singapore, bringing the total to 26.

Four will be built in Sembawang, Eunos, Kallang and Bukit Panjang by 2020. Two more will start operations in Nee Soon Central and Tampines North by 2023.

"We will have more affordable, accessible, high-quality primary care all over Singapore," Prime Minister Lee Hsien Loong said in English at his National Day Rally yesterday.

He added that polyclinics such as that in Ang Mo Kio have been upgraded in recent years and others will follow suit.

"It is bigger and better, with more and improved services," Mr Lee said of the Ang Mo Kio polyclinic, which moved to a larger facility in January and reopened officially in June. "In fact, Ang Mo Kio Polyclinic has become so popular that the staff told me they are getting 'medical tourists' - not from overseas, but from Yishun and even Bedok and Jurong."

At the rally, Mr Lee also announced other initiatives to boost healthcare affordability. These include changes to the Community Health Assist Scheme and a new Merdeka Generation Package to help people born in the 1950s with their medical expenses.

"Singaporeans are indeed spending more on healthcare, partly because we have more advanced treatment options and better equipment," he said.

"But a bigger reason is Singaporeans are living longer and growing older, which means we are more likely to have more episodes of illness and more medical problems to treat."

He added that the Government is "very focused" on the costs of housing, education, and healthcare.

"We will spare no effort to ensure you can afford them."

CHAS subsidy scheme to be extended to all Singaporeans with chronic ailments; no income restrictions
By Linette Lai, Health Correspondent, The Straits Times, 20 Aug 2018

All Singaporeans with chronic ailments will be able to tap the Community Health Assist Scheme (CHAS) regardless of their income, said Prime Minister Lee Hsien Loong yesterday.

This move will qualify them for subsidised medical treatment, with tiered benefits based on their income levels. The Health Ministry will give more details later, including when the expanded scheme will take effect.

The current CHAS subsidises outpatient medical and dental treatments for lower-to middle-income citizen households and the Pioneer Generation, which refers to Singaporeans who were aged 16 and older in 1965.

Mr Lee, speaking in English at the annual National Day Rally, said it has worked well. However, as people grow older, more will have chronic conditions, like diabetes and high blood pressure, he said.

"But we can continue to live a full life if we manage these conditions - by taking good care of ourselves, eating healthily, taking our medications regularly and following up with our family doctor."

He added: "I think all of us will appreciate a little bit of help with the regular medical bills for such chronic conditions."

In the present three-tiered CHAS, people can get subsidised treatment for common illnesses, chronic health problems and specified dental issues. They are also entitled to cheaper health checks.

Blue CHAS cardholders have a per capita monthly household income of $1,100 or less, while for middle-income orange cardholders, the monthly household income criteria is between $1,101 and $1,800 per person. When it comes to chronic health conditions, these groups can get up to $320 in yearly subsidies depending on their income level, or $480 if the condition is considered complex.

For those in the Pioneer Generation, subsidies are capped at $360 a year for simple chronic conditions, and $540 a year for complex ones.

Although Mr Lee did not elaborate on the expansion of CHAS, he pointed out to audience members that the CHAS graphic on screen was yellow. "If you look carefully at this, you'll find that this is a yellow CHAS, which is a different colour from the orange one," he said. "Maybe there's a hint down there."

Dr Chia Shi-Lu, who heads the Government Parliamentary Committee for Health, said the extension of the scheme is a move in the right direction since two-thirds of people still visit general practitioners (GPs) rather than polyclinics for primary care.

"This will further improve affordability and accessibility for our population with an increasing chronic disease burden, as it will lessen out-of-pocket expenses for those who are more comfortable going to their GPs," Dr Chia said.

At the rally held at the Institute of Technical Education College Central campus in Ang Mo Kio, Mr Lee also assured Singaporeans that healthcare costs will not spiral out of control, and pledged that the Government will "spare no effort" to ensure Singaporeans can afford medical care. For many years, the "3Ms" of Singapore healthcare - Medisave, MediShield Life and Medifund - have served the country well, he noted. "(This framework) has produced good healthcare outcomes. It has held national healthcare spending low and also kept healthcare affordable for you."

More recent changes to government healthcare financing schemes - like the introduction of national disability insurance scheme CareShield Life - are also intended to keep healthcare affordable in the years to come.

"We want all Singaporeans to have access to affordable, high quality healthcare," Mr Lee said. "No one should be denied medical care because they cannot afford it. This is my commitment to you."

99-year leases for HDB flats most practical, fair for future generations, says PM Lee
It allows flats to be passed down to descendants, yet allows for building of new flats for future generations
The Straits Times, 20 Aug 2018

A lease of 99 years for HDB flats is practical, as it allows people to live in their flats until old age or even as long as they live, while making it possible as well for the Government to continually rejuvenate public housing for future generations.

Prime Minister Lee Hsien Loong made this point in English yesterday at his National Day Rally as he addressed an issue that has been in the spotlight in the past year.

One fundamental reason HDB leases are 99 years is "to be fair to future generations", he said.

A 99-year lease means a flat can be handed down to one or two more generations before it must be returned to the state. But if flats were to be sold as a freehold property, the Government would eventually run out of land to build new flats for future generations, Mr Lee said.

There would be other long-term repercussions as well. Owners would pass down their flats to some of their descendants, many generations into the future, he said.

Those not lucky enough to inherit a property would get nothing.

"Our society would split into property owners and those who cannot afford a property, and that would be most unequal and socially divisive," Mr Lee said. That is why 99-year leases are not just for HDB flats, but also for private housing. He pointed out that land for private housing is sold only with a 99-year lease.

On a more practical note, buildings tend to look worn even before they reach 50 years.

"After a century, I am sure the mechanical and electrical systems will be obsolete and even if we could fix all that, the recurrent maintenance costs would be very high."


So, it is better to let the leases expire, take the blocks back, demolish them and rebuild afresh, he said.

"We may keep a few blocks which have historical or heritage value, or which will remind people what the old days were like, but these should be the exception," he added.

"For the others, we can rebuild newer, better, more liveable flats, blocks and townships, more suited to what our grandchildren and great-grandchildren will want to live in."

Further, 99 years is a very long time, Mr Lee said. If a couple buy a flat in their early 30s, they will be at least 130 years old at the end of the lease. And when a couple retire after having lived in the flat for 30 or 40 years, it would still have more than 60 years of lease left, he added. "That is long enough for it to retain substantial value, and be a good retirement nest egg."

The home owners could then choose to continue living in the flat, rent out a room for income if needed and one day, bequeath the flat to their children. Alternatively, they could sell the flat and move to a smaller unit, or opt for the Lease Buyback Scheme, which allows retired home owners to return the remaining lease on their flat to HDB, then use the money they receive to fund their senior years.

The 99-year lease is also long, even if someone had bought a resale flat, Mr Lee said.

After all, Singapore's oldest flats are at most 52 years old, with a remaining 47 years on their lease.

HDB estimates that fewer than 2 per cent of households, including those who bought resale flats, will outlive their leases, he said.

Mr Lee noted that the Government can do several things to help residents monetise their older flats, including expand the Lease Buyback Scheme and improve the liquidity of the resale market, and added that the National Development Ministry is working on this.

He also said that even if a home owner had to return his flat at the end of its lease, the Government will help him get another flat to live in. This might be a Build-To-Order flat from HDB with a fresh 99-year lease, if the person is eligible, a resale flat on a shorter and cheaper lease, or a two-room flexi flat.

The flexi is a flat offered under the two-room Flexi Scheme, which lets elderly citizens choose the length of lease on their flat, based on their age, needs and preferences.

Voluntary Early Redevelopment Scheme (VERS): Owners of old HDB flats can vote to let Govt buy back flats early, get new ones with proceeds
VERS allows for more orderly redevelopment
By Rachel Au-Yong, Housing Correspondent, The Straits Times, 20 Aug 2018

Residents in ageing Housing Board (HDB) towns will get a chance to experience what it is like to go en bloc as the Government seeks to avoid the mass redevelopment of such estates all at one go.

Under the new Voluntary Early Redevelopment Scheme (VERS), owners in flats aged 70 years and older can vote for the Government to buy back their homes before their leases run out, if their precinct is selected for VERS.

They can use the proceeds to buy a new flat, while the Government redevelops the precinct. If they vote against such a move, they can continue to live in their flats till the leases run out.

Prime Minister Lee Hsien Loong, in announcing the planned scheme at his National Day Rally speech yesterday, said VERS would allow the authorities to redevelop older HDB towns in an orderly way - paced over two to three decades, rather than crammed in four or five years.

He noted that several older estates, such as Marine Parade, Ang Mo Kio and Bedok, were built in a rush to stave off a housing shortage, mostly during the 1970s and 1980s.

Without a scheme such as VERS, "we will have to find new homes for a lot of people at once", he said.

"HDB will have to tear down and rebuild all the old flats in a hurry... These towns will become construction sites all over again, with cranes all over the place," he said.

The scheme, he added, allows redevelopment to take place in a "more measured and considered way".

It also gives more Singaporeans a chance to experience large-scale redevelopment - something previously restricted to those part of the Selective En-bloc Redevelopment Scheme (SERS).

Only 5 per cent of flats are estimated to be eligible for SERS, and most of them have already been completed.

Unlike SERS, however, the compensation for VERS will be "less generous", as there is less financial upside for the Government to take back these flats early.

Eligible SERS flats often have "high development value", where the HDB is likely to build more flats in the underutilised plot of land.

Also unlike SERS, VERS will be determined by a vote.

Mr Lee noted that VERS will not be implemented for another 20 years, adding that the Government needs more time to work out how to select the precincts, space the redevelopments out, decide what the compensation would be and how to afford the scheme for the long haul.

Some of the oldest HDB flats are in estates like Queenstown, Jurong and MacPherson.

"But I think such a scheme is necessary, and so we will start planning for VERS now," Mr Lee said.

Observers said the announcement, together with more upgrading programmes, sends a clear signal that the Government will not let the value of a flat automatically drop to zero.

National University of Singapore real estate professor Sing Tien Foo said VERS targets a group of people who are likely to increasingly face challenges in monetising their ageing flats, without being a moral hazard.

He added that older flats in strategic locations such as near the city centre or an MRT station are more likely to be sold back early, as they have lost their structural value and there is redevelopment potential.

But International Property Advisor chief executive Ku Swee Yong wondered if the scheme would undo the warning call made by the Government last year not to pay overly high prices for ageing flats.

"Despite the uncertainty about whether people will vote for VERS, sellers being sellers may listen to this announcement and have unreal expectations about what their flat can go for," he said.

"They might tell a buyer that the precinct has a higher chance of being 'VERS-ed' and raise prices, just like how SERS has never been a certainty but people still gambled based on that."

Voluntary Early Redevelopment Scheme (VERS): A novel solution that keeps HDB flat as both home and asset
By Lee Su Shyan, Business Editor, The Straits Times, 20 Aug 2018

Many Singaporeans have been preoccupied with the issue of ageing HDB leases lately. This came to the fore in March last year when National Development Minister Lawrence Wong, concerned about the high prices some were paying for old flats, warned that not all will be eligible for the Selective En bloc Redevelopment Scheme or SERS.

Mr Wong said only 4 per cent of Singapore public housing stock had been selected for SERS since it began in 1995. Most of the remaining flats will return to the HDB when the leases run out and there will be no residual value.

Since then, there has been much speculation and concern over how this issue would be resolved.

The move to launch a new scheme - Voluntary Early Redevelopment Scheme (VERS) - can only be welcome news. It gives more households the option, when their flats turn 70, to sell to the Government what is left of the lease.

This mechanism goes a fair way in assuaging home owners' concerns about the value of their flats, offering another option other than taking their chances with market forces or letting their leases run down to zero.

This measure, coupled with the moves to expand the Home Improvement Scheme (HIP) to include flats built up to 1997 - and the new programme to ensure all flats go through a second round of upgrading when they hit the 60-, 70-year mark - will reassure HDB flat owners that the value of their homes will be maintained throughout the lifetime of the lease.

It will have a spillover effect on the HDB resale market, which has been dampened by Minister Wong's word of caution.

His comment cast a cloud of uncertainty over the fate of ageing flats, and this depressed HDB resale prices as well as the volume of transactions, as reflected in recent quarterly figures.

Now, with the newly announced VERS, the market can be expected to be more stable, as major upkeep is undertaken periodically and many are given an exit option at the 70-year mark.

It also effectively quashed hopes of other options, like allowing the top-up of leases, which could have resulted in even greater speculative activity.

The Government's decision to offer the exit option only at 70 years, when the lease has run down substantially, is also a prudent move that does not require it to shell out too large a payment.

These measures dovetail nicely into the bigger picture of Singapore's urban redevelopment.

As International Property Advisor chief executive Ku Swee Yong puts it, in 20 years, Singapore's urban landscape will need to be "resculpted, to be significantly modified for smart lamp posts, autonomous vehicles, drone taxis, solar energy".

If people can hold on to their homes for 99 years and beyond, such infrastructure development would be undertaken in piecemeal fashion or take too long to materialise.

Although Singapore is about 20 years away from its first VERS project, it is not too long a wait given the details, large and small, that need to be ironed out. Not least among them is the calculation of the amount the Government will pay to buy back the residual lease.

There is also the issue of how the Government will fund what is likely to be an exercise costing billions of dollars over decades.

Going by the experience of the private market, collective-sale processes have not always been smooth-sailing. Marketing agents have been sued by residents. Neighbours have fallen out with one another. Residents are sometimes most unhappy at having to leave their homes, the windfall notwithstanding.

Individual interest and the common good sometimes are in conflict.

Current collective-sale tenders in the private home market generally involve a few hundred home owners. With an HDB precinct, the numbers would have to be larger to make it viable.

A VERS project could well put neighbourliness and the kampung spirit of HDB folk to the test.

550,000 Housing Board flats to be spruced up under the Home Improvement Programme
First HIP will cost the Government more than $4 billion while HIP II will likely cost even more
By Grace Leong, The Straits Times, 20 Aug 2018

A total of 550,000 Housing Board flats will benefit under the Home Improvement Programme (HIP), the HDB said yesterday. Some 320,000 flats are already eligible under the HIP, which was introduced in 2007.

Prime Minister Lee Hsien Loong said in his National Day Rally speech last night that another 230,000 flats built between 1987 and 1997 would be included.

Flats will be eligible for upgrading when they hit around 30 years old and, not only that, HDB owners can look forward to another upgrading when the flats reach about 60 to 70 years old, PM Lee added. This second phase of the programme, HIP II, will start in about 10 years' time.

Previously, only flats built up to 1986 that had not undergone the previous Main Upgrading Programme (MUP) were offered the HIP.

There are about 320,000 flats eligible under the 1986 age band. Of that number, the HIP has been announced for about 242,000 since 2007, HDB said. Upgrading work has been completed for 122,000 flats and is under way in the rest. The Government expects to spend about $4 billion on these flats.

MUP was launched in 1990 and completed in 2011, benefiting some 130,000 additional households.

"We launched the HIP 10 years ago. The final batch of HIP flats will be announced by next year. So within a few years, all flats eligible for HIP will have been balloted, passed, executed and upgraded. That means altogether 450,000 flats upgraded under MUP plus HIP," PM Lee said.

The first round of upgrading, which includes flats built up to 1997, will start soon, Mr Lee said, adding: "Pasir Ris will get HIP, and so will Yishun, Tampines, Jurong and several other estates."

The second round of upgrading is expected to start in about 10 years' time, when flats reach 60 to 70 years of age.

The Government pays up to 95 per cent of the upgrading cost, so residents pay as little as a few hundred dollars. "The first HIP will cost the Government more than $4 billion. HIP II will probably cost even more, because the flats will be twice as old by then. But it is well justified, and we will do it as long as MOF (the Finance Ministry) has the money," Mr Lee said.

An essential upgrade, the HIP fixes maintenance problems. "We upgrade the electrical supply too... because more families have air conditioners, washing machines, computers and, now, personal mobility devices," Mr Lee said.

"It's not surprising that after upgrading, the flat value usually goes up," he said. The two rounds of upgrading keep flats in good shape. "We are determined not to let our public housing degenerate into ragged squalid slums, which has happened in many other cities."

HIP II will help flats stay liveable and retain their value as their leases run down, said Mr Lee.

ERA Realty Network key executive officer Eugene Lim said HIP II is seen as "a 2/3 life upgrade for HDB flats". It will help to rejuvenate the flats as they await Voluntary Early Redevelopment Scheme (VERS) or end-of-lease return to HDB.

The HIP, HIP II and VERS are well-rounded and innovative policies that could address the concerns of Singaporeans, OrangeTee & Tie's head of research and consultancy Christine Sun said. "As most flats will be upgraded twice before the lease expires, Singaporeans may not need to worry too much about the depreciating value of an ageing flat now," she said. "Most importantly, the new schemes ensure that there is sufficient land to be recycled for the next generation, and housing will continue to be affordable."

PM Lee explains why Singaporeans feel cost-of-living pressures
He cites 4 reasons for that despite people having better lives now than their forefathers
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 20 Aug 2018

Singaporeans today, compared to their forefathers, have better lives, with access to world-class education, affordable and high-quality healthcare, and a high rate of home ownership, said Prime Minister Lee Hsien Loong yesterday.

But they still feel pressures from the cost of living, he noted in his National Day Rally speech in Mandarin which focused largely on the issue.

Acknowledging their worries, he said: "They sense that they have to spend more, that their earnings never seem quite enough."

He gave four reasons Singaporeans feel this way, and pledged that the Government will do its part to ease their concerns.

But people need to do their part, too, he said, urging them to adopt some lifestyle changes to ease the squeeze on their wallets.

The reasons for feeling financially pressured vary, he noted.

Young families, for example, pay close attention to the costs of housing and pre-school education as they are buying their first property and planning to have children.

The sandwiched generation looking after both their children and ageing parents are concerned with healthcare and education costs.

A third reason is that the cost of living has risen on account of changing lifestyles.

Pointing to the quality of life improving with economic growth and technological progress, Mr Lee said people eat out more and vacations have become more common.

Things that were once considered luxury items or did not even exist, such as air-conditioners and mobile phones, have also become daily necessities, he added. "Our standards of living have gone up. This is a positive development, because it means our lives have improved. However, to sustain this higher quality of life, people are spending more than before, and this can put pressure on households," he said.

The fourth reason is inflation, which has led to price increases.

Mr Lee highlighted four groups who may feel the pinch more: those whose wages have stagnated amid an overall rise in wages, those who fear losing their jobs as the economy transforms, those who are already jobless, and retirees who no longer have income and are living off their savings. "When prices increase, they feel as if 'their wallets have shrunk'," he said.

Delving specifically into the rise in utilities prices, Mr Lee said while the Government has tried to keep inflation low, "we cannot completely prevent prices from increasing".

This is so especially for electricity tariffs, since Singapore generates electricity with imported natural gas, which is priced based on global oil prices. To fix electricity tariffs would thus require costly subsidies that are unsustainable, and will also end up benefiting the wealthy more since they consume more electricity.

Instead, the most effective way to help low-and middle-income households with utilities bills is via U-Save rebates for families in Housing Board flats, he added. "I hope people will understand that we have adopted the best approach to lessen the burden of Singaporeans."

While cost of living is a perennial concern, the issue has gained traction recently with increases in water and electricity prices kicking in.

Mr Lee assured Singaporeans the Government looks closely at the three major expenditure items - housing, healthcare and education - that people worry most about.

"We will make sure (they) are affordable, so that Singaporeans do not have to worry about them."

He also urged Singaporeans to do their part by making small changes - "save water, save electricity, and at the same time, shop around for the best prices, and be a smart consumer".

Specifically, he cited mobile phones, infant milk formula and hawker centres to give tips on how people can save on phone bills, bringing up their children and food.

He urged people to watch their data usage on their mobile phones, advised parents that expensive formula milk is not always the best, and pledged to build more hawker centres with affordable food options that cost $3 or less. The Government will build 13 more hawker centres in the coming years.

"While the Government will do its part to alleviate people's cost of living concerns, each of us also has a responsibility to 'look after our own wallets'," he said.

Why fixing electricity prices not best way to subsidise lower-income families
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 19 Aug 2018

As Singapore is not an oil-producing country, fixing electricity tariffs will mean costly subsidies, which cannot be sustained financially in the long run, said Prime Minister Lee Hsien Loong on Sunday (Aug 19).

Such a move would also mean those who consume more electricity will receive more subsidies, he added.

So, he does not think it is the best way to help low-income families because the heavy consumers of electricity are the wealthy.

Mr Lee argued the point in his Mandarin National Day Rally speech when he explained the issue of price increases and what the Government has done to ease cost of living pressures associated with them.

In a quick quiz he gave the audience, Mr Lee sought to show that electricity tariffs today cost less than 10 years ago, even though tariffs have gone up recently.

In 2008, the electricity tariff was 25.07 cents/kilowatt hour (kwh). This year, it is 23.65 cents/kwh.

Most of the audience at the rally held at the Institute of Technical Education (ITE) College Central campus in Ang Mo Kio did not have the answer when asked whether today's electricity tariffs are higher or lower.

Mr Lee said: "Unfortunately, we all remember vividly when the electricity tariff goes up, but when the tariff comes down, we forget quickly."

He added, to laughter from the audience, that this had created a political problem.

Flashing a chart to show that Singapore's electricity tariffs track fluctuations in oil prices, he explained that Singapore "cannot control electricity tariffs because we import almost all our energy".

Natural gas is used to generate electricity here, and the prices of natural gas are based on global oil prices.

"The Government has tried to keep inflation low and prices stable, but we cannot completely prevent prices from increasing," he added.

On how best to help the low- and middle-income households deal with this, Mr Lee said the U-Save rebates for families living in Housing Board flats is a more effective way to subsidise people's utilities bills.

The U-Save rebate is distributed every three months. It was announced earlier in Budget 2018 that eligible households will receive an additional $20 a year for three years, from next year to 2021.

Those living in one- and two-room flats can receive close to $400 in such rebates, which is about four months' worth of utility bills. Those living in bigger flats get less.

In his speech, Mr Lee also touched on the recent increase in water prices, explaining that it was necessary as the cost of producing clean water has gone up significantly over the years.

Singapore also needed to build more Newater factories and desalination plants to produce more of its own water, he added, saying water will always be a precious resource, strategic and security issue as well as a sensitive foreign policy matter.

"We put off the increase for as long as we could," he said.

He added: "I have spent some time today explaining the relationship between utility prices, energy prices, and U-Save rebates. I hope people will understand that we have adopted the best approach to lessen the burden of Singaporeans."

Clear message on role of Govt, individuals in easing cost of living
By Elgin Toh, Deputy Political Editor, The Straits Times, 20 Aug 2018

At the National Day Rally five years ago, Prime Minister Lee Hsien Loong joked about playing property agent to all Singaporeans, as he explained changes to housing policy and how they would impact their lives.

At yesterday's rally, you could say he turned into one of those savvy financial advisers who dispense valuable tips on how to save money on daily expenses.

One of the big issues that PM Lee tackled was the cost of living - something that has been on the minds of many Singaporeans.

The needle-moving policy announcements on this front last night were nothing to sniff at.

Two of them were in healthcare.

First, a Merdeka Generation Package for all Singapore citizens born between 1950 and 1959, which will relieve pressure from healthcare expenses for the cohort that missed out on the Pioneer Generation Package by a decade or less.

This gesture will no doubt be highly appreciated by the Merdeka Generation as well as their children and grandchildren. It also acknowledges that the sacrifices they made laid the foundations for Singapore's prosperity, and are not forgotten.

Second, an extension of the Community Health Assist Scheme (CHAS) to all Singaporeans with chronic diseases. CHAS provides government subsidies on private GP visits. Currently, it is available only to lower-and middle-income households.

These were meaty announcements that showed the Government is prepared to spend significant sums when it believes the pain from the rise in cost of living is real. But before making these announcements, PM Lee - in keeping with the Government's long-held belief that societal responsibility must be balanced with individual responsibility - called on people to make prudent spending choices.

He gave concrete examples.

One, don't watch movies on your mobile phone without Wi-Fi. If you do that, your 4G data bill will skyrocket, he rightly noted.

"You can download the movie first using your home's Wi-Fi. When you're out, you can tap Wireless@SG when it is available. If we watch our data usage, we will not have to worry about high telecommunications bills," he explained.

Two, don't go for expensive infant milk formula brands. They are basically the same as all the other brands. He went so far as to call out milk powder companies for "misleading parents into thinking that if it is more expensive, it must be better" - when in fact all brands provide good nutrition, and no one brand is capable of making children smarter.

Finally, he pointed out that at all new hawker centres, almost every stall must offer one affordable meal costing $3 or less on its menu. He added that there were seven new hawker centres built in the past few years, after the policy to stop building new centres was reversed. Another 13 are in the pipeline.

The message was clear: You have a choice when it comes to how you spend your money, so exercise it.

He wrapped up this message with a line from former samsui woman Woo Yun Sum, now 88. She starred in a moving film screened at this year's National Day Parade.

In the video interview, she uttered a now-famous line, with the stoicism that characterises her resilient generation: "When there is rice, eat rice. When there is porridge, eat porridge."

PM Lee commented: "Madam Woo's words remind us of the importance of staying positive and being content even as we seek to improve our quality of life."

His message - that it takes two to tango, and individuals must play their part, even as the Government plays its part - will be well remembered. Individuals do have a choice when it comes to how to spend their money, and must do so carefully. The advice he gives is also practical and clearly actionable - no movies without Wi-Fi - and will stay in people's minds.

That said, not everyone may be fully satisfied. Some will say that there are areas of spending that look discretionary on the surface but don't feel that way.

Take tuition, for instance. Spending on after-school classes has risen by a great deal over the past decade. At last count, this is an industry that, by some estimates, rakes in $1 billion a year.

Parents send their children for additional classes because they feel they are locked in some kind of race: If other parents do it, I have to do it too, or my child will suffer the consequences.

For them, it feels like there is little or no choice but to spend on tuition to keep up with the neighbours.

But perhaps this is a topic for another National Day Rally. Not all issues can be tackled in one speech.

Still, the announcements this year on cost of living were very significant, especially in the area of healthcare costs.

This is important, because if the Prime Minister had called for better spending choices by individuals without unveiling any new initiatives from the Government, the message could have rung hollow. It may have looked like the Government was dishing out advice from the sidelines without helping.

Instead, the CHAS and Merdeka Generation Package announcements gave the Government greater moral authority to ask citizens to help themselves too.

Cost of living is a perennial issue, and a difficult one for governments around the world. Taking the bull by the horns, and doing so in the most important political speech of the year, PM Lee sought to show that his is a government that is prepared to act to address concerns on the ground.

Singapore hawker culture to be nominated for UNESCO listing
PM Lee: It is a cultural institution and unique part of Singapore identity
By Melody Zaccheus, Heritage and Community Correspondent, The Straits Times, 20 Aug 2018

Every day, more than 6,000 cooked food hawkers produce an assortment of mouth-watering dishes at about 110 hawker centres here.

Now, the island's rich hawker culture will be nominated for inscription into UNESCO's Representative List of the Intangible Cultural Heritage of Humanity, Prime Minister Lee Hsien Loong announced yesterday.

If the bid is successful, Singapore's hawker culture will join the likes of Malaysia's Mak Yong theatre from Kelantan, Indonesia's batik and India's yoga on the world stage. Started in 2008, the list which has about 400 elements, sets out to demonstrate the diversity of world heritage and ensure its protection.

In his Mandarin speech at the National Day Rally, Mr Lee called hawker centres Singapore's "community dining rooms", adding that they are a cultural institution and unique part of the country's heritage and identity.

He also described the Singapore Botanic Gardens' inscription as a UNESCO World Heritage site in 2015 as a proud moment for the country.

Putting Singapore's hawker culture on the intangible cultural heritage list will "help to safeguard and promote this unique culture for future generations". He said: "It will also let the rest of the world know about our local food and multicultural heritage."

The organisations fronting the bid - the National Heritage Board (NHB), National Environment Agency and Federation of Merchants' Associations Singapore - said hawker culture was selected as it has shaped the Singaporean identity in many ways.

For instance, hawker centres function as accessible multi-ethnic spaces where people can feast on a wide variety of multi-generational and multicultural food offerings that have evolved with the times. The culture is built on the hard work, knowledge and culinary techniques and traditions of hawkers past and present.

Singapore's hawkers started out as migrants who peddled their food on streets and sidewalks. They were moved into purpose-built facilities by the Government from the 1970s. Hawker centres are still being built today and by 2027, a total of 127 hawker centres will dot the landscape.

The cherishing of hawker culture also shows up in a series of engagements conducted with Singaporeans to discover what aspects of the country's intangible cultural heritage resonated with them. This included an NHB poll earlier this year where 27 per cent of 3,000 respondents said food was more important to them than social practices and festivals, and traditional performing arts, which each got 18 per cent.

Countries must demonstrate public support for the bid and a website ( has been launched for Singaporeans to pledge their support.

In February, Singapore ratified the UNESCO Convention for the Safeguarding of Intangible Cultural Heritage as a signatory. This allows the Republic to submit nominations to UNESCO. In April, the NHB launched an inventory featuring 50 intangible cultural heritage elements practised here, which is a criterion for the nomination.

By next month, a committee made up of members from the public and private sectors will be formed. It will submit the hawker culture nomination dossier to UNESCO by March. The result will be announced by the end of 2020.

An item's listing does not imply it belongs, originates from or exists only in the submitting country.

Hawkers The Straits Times spoke to said the nomination can give due recognition to the labour-intensive trade.

Among them, second-generation hawker Loh Teck Seng, 62, who took over his father's itinerant business selling soya bean milk.

Mr Loh, who has been operating a stall at Tiong Bahru Market, said: "I feel appreciated and a sense of pride. It can help elevate our standing and attract tourists to our stalls. Perhaps new generations of Singaporeans will also desire to pick up the trade."

Cultural geographer Lily Kong, Singapore Management University's provost, believes a successful listing "enhances our sense of pride and ownership of our cultural heritage".

Professor Kong added: "The process is also important, in bringing Singaporeans together to articulate what it is that matters to us as a people, and what our shared heritage is."

Malays here have done well, but more can step forward to volunteer, says PM Lee
By Hariz Baharudin, The Straits Times, 20 Aug 2018

While Malays here have taken great strides to build a strong culture of self-reliance and cooperation, more can step forward to volunteer with community groups, Prime Minister Lee Hsien Loong said yesterday at the National Day Rally.

In his 15-minute Malay speech, Mr Lee held up the contributions of three key Malay/Muslim organisations which he dubbed M³ - the Islamic Religious Council of Singapore (Muis), self-help group Mendaki and the People's Association Malay Activity Executive Committees Council (Mesra) - and urged more Malays here to volunteer.

The groups will continue to work closely together, pool volunteers and resources and collaborate with the Government and other Malay/ Muslim organisations.

By doing so, said Mr Lee, they can make more progress in tackling challenges faced by the community, including getting more children to attend pre-school, empowering and mentoring youth, and supporting those left behind because of drugs or social problems.

"I hope more Malays will contribute to the community through M³, whether you are new volunteers or activists already in the mosques and various Malay/Muslim organisations. Let us come forward to help, and take the community forward," he said at the rally at the Institute of Technical Education (ITE) College Central in Ang Mo Kio.

Mr Lee highlighted some of the plans and contributions of Mesra, Muis and Mendaki.

During the holy Muslim month of Ramadan in June, Mr Lee said he went to Geylang Serai to walk around and to see Wisma Geylang Serai, a community hub developed by the People's Association. Mesra has planned a series of events like youth festivals in the run-up to the hub's official opening in January.

Plans are also afoot to make Geylang Serai a more culturally distinctive district, said Mr Lee.

Senior Minister of State for Defence and Foreign Affairs Maliki Osman will work with Mesra, business owners, the Government and Singaporeans, including the Malay community, to make the area more vibrant.

In his speech, Mr Lee also praised Muis for playing an important role in overseeing mosques here and providing religious guidance.

Many eminent Muslim thinkers have visited Singapore on the Muis Distinguished Visitor Programme to speak about Islam. They include the Grand Imam of Al-Azhar, Dr Ahmed Al Tayyeb, who was hosted to dinner by Mr Lee in May.

Mr Lee said Dr Ahmed's lecture emphasised how people of all religions should respect other faiths and interact in a practical and inclusive way - advice which is important for multiracial and multi-religious Singapore.

As for Mendaki, Mr Lee credited it with uplifting the community through its education and social programmes. These have helped Malay students to achieve sustained education improvements over the past few decades. "Most importantly, it has fostered a sense of pride in the community, a can-do spirit, of helping one another and making a difference," he added.

Wrapping up, Mr Lee said the Malay community has done well and maintained its identity, while being very much a part of Singapore.

Said Mr Lee: "Singapore must remain a country where all Malays can achieve their aspirations. Let us work together to strengthen our harmonious, multiracial community, and progress as one people, one Singapore."

Countries should act with 'restraint and wisdom' amid changing world order, says PM Lee
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 20 Aug 2018

The world is at a turning point, with major uncertainties looming over global affairs, noted Prime Minister Lee Hsien Loong last night.

"We cannot be confident that the major powers will continue to work with one another, and that the existing international system which has held the world together for so long will still hold," Mr Lee said.

"We do not know whether after a while, new rules and norms for international cooperation will form, or whether there will be prolonged tension and suspicion, mutual rivalries and hostile blocs."

The Americans and Europeans have long been firm friends but are now arguing over trade and defence spending, while the Americans and the Chinese, who have the most important bilateral relationship in the world, are waging a trade war.

The United States and China need to work closely together on issues such as climate change, but America's leaders have labelled Beijing a "strategic competitor". China, for its part, has pledged to push back and not "turn the other cheek".

Pointing to this "unprecedented situation", Mr Lee said:"We hope all countries will act with restraint and wisdom, overcome the current challenges, and find a new way to move forward together."

The ongoing global frictions will affect Singapore, he added. Openness, globalisation and free trade have come under pressure as the US, which used to promote free trade and the free movement of people, imposes tariffs on imports from other countries, including European Union nations, Canada, Mexico and China.

"These countries are retaliating, imposing their own tariffs on US exports like soya beans, bourbon, blue jeans and Harley-Davidson motorcycles," he said.

"This tit for tat affects business confidence, undermines the multilateral trading system and threatens global prosperity."

There are no winners in a trade war, he said. Small and open economies are especially vulnerable, he added, and Singapore will suffer collateral damage.

While highlighting these uncertainties, Mr Lee noted that Singapore played a part to "shine a light" in the world, when it stepped up to host the summit between US President Donald Trump and North Korean leader Kim Jong Un in June.

While Singapore was not involved in the discussions, it had a big responsibility to ensure the summit proceeded smoothly and safely, he said. The US and North Korea chose Singapore as host because they considered the Republic to be a serious and reliable partner, Mr Lee added.

"We are friendly and straight with all parties, and both trusted us to have the infrastructure and capability to provide a safe and secure environment."

It was a daunting task but Singapore rose to the challenge, he added, extending a personal word of thanks to all who worked hard to make the summit a success.

"Organising the summit brought us all together, supporting and cheering one another on. We have every reason to feel proud of ourselves."

Singapore, Malaysia can pursue win-win cooperation if ties are kept stable and close, says PM Lee
Both can focus on their domestic priorities, and work together to tackle common challenges
By Royston Sim, Deputy Political Editor, The Straits Times, 20 Aug 2018

Singapore and Malaysia can pursue win-win cooperation and focus on their respective domestic priorities if bilateral relations are kept stable and close, said Prime Minister Lee Hsien Loong.

The fundamentals of the relationship between them have not changed, he said, even though Malaysia has a new government led by Prime Minister Mahathir Mohamad.

"We are closely bound by ties of kinship and history, geography and economy," said Mr Lee yesterday, as he addressed concerns about the state of bilateral ties with Malaysia under Tun Dr Mahathir.

"We need to work together to tackle common challenges. And when our interests diverge, we must find constructive ways to resolve our differences," he added.

The Pakatan Harapan coalition came into power in May, defeating the ruling Barisan Nasional government in the general election.

Dr Mahathir subsequently announced plans to scrap the project for the high-speed rail (HSR) line between Kuala Lumpur and Singapore, before changing tack by saying that Malaysia is looking to defer the project. He has also revived the issue of water.

Mr Lee noted that Singapore has worked with Dr Mahathir before, when he was Malaysia's prime minister for 22 years until 2003.

Both countries completed several important projects together in that time, including the Second Link at Tuas and the Linggiu Dam in Johor.

Soon after the election in May, Mr Lee called on Dr Mahathir, Deputy Prime Minister Wan Azizah Wan Ismail and her husband, Datuk Seri Anwar Ibrahim.

"I had good meetings with all three of them. I told Dr Mahathir that I wanted to work with him to take our bilateral relationship forward," Mr Lee said.

"He agreed that we should, because we are each other's closest neighbours."

Mr Lee said he appreciates the reasons why the Malaysian government is determined to review and change many of the policies set by the previous administration.

But some reviews affect Singapore's ongoing projects with Malaysia, including the HSR and Rapid Transit System (RTS) Link to Johor, he noted.

"We entered into these two projects in good faith, after careful negotiations, because they benefited both countries," he said.

Transport Minister Khaw Boon Wan recently met Malaysia's Economic Affairs Minister Mohamed Azmin Ali "to understand Malaysia's intentions, and to find a constructive way forward".

Mr Lee reiterated that both the HSR and RTS Link have legally binding bilateral agreements that clearly set out the duties of each party, and what happens if either party wants to change or terminate the agreements.

"Both sides have to carry out what has been agreed to, unless we mutually agree to vary the terms," he said.

On water, Mr Lee pointed out that the issue of reviewing the 1962 Water Agreement has come up before, during Dr Mahathir's previous term as prime minister.

Singapore's view is that the Water Agreement is sacrosanct, he said. "We must proceed strictly in accordance with its terms."

That is why Foreign Minister Vivian Balakrishnan recently reiterated Singapore's position in Parliament, to avoid any misunderstanding, he added.

Singapore has worked well with Malaysia over the years, Mr Lee said, and has done substantial projects with successive governments that have brought tangible benefits to both Singaporeans and Malaysians.

"I hope that with Dr Mahathir and his new team, we can build on our deep partnership, look ahead and make further progress together."

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