TNAG-0055-FCO40-91-Defence-review-1977 — Page 88

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redundancies at an average rate of some 7,000 per annum would be created

up to 1970-71 and approximately 5,000 a year up to 1975-76, though the rate

of rundown would presumably not be even throughout the two periods. It is

notable that the phasing at present proposed seems likely to involve a more

rapid rate of redundancy in the earlier years of the rundown than in the

later.

In the Malta negotiations there was considerable pressure to minimise redundancies in the earlier years of the rundown.

37. In addition to the loss of jobs by direct employees there will be

multiplier effects attributable to the decline in the spending of the local employees, and (even more important) the decline in the spending on local

goods and services by the United Kingdom forces and their families. These

indirect consequences are not readily quantifiable but it might be reasonable

to suppose that the total addition to unemployment over the whole period (taking direct and indirect effects into account) might be of the order of 65,000-70,000 and would reach some 30,000 by 1970-71 on present assumptions

if no corrective action is taken. The present labour force of Singapore is

about 540,000 so that by 1970-71 redundancies would amount to between about 5 per cent and 6 per cent of the present labour force rising to about

12 per cent by 1975. About 19,000 school leavers join the labour force

each year and the economy has not been able to provide this number of jobs:

unemployment has been rising and many observers believe that it would go on

rising even if there were no withdrawal. Thus unless substantial additional

employment can be generated the withdrawal will seriously aggravate a situation

which is already difficult and likely to become more difficult.

Budget and Balance of Payments

38. In the absence of corrective measures revenues are likely to decline as

a consequence of the reduction of incomes and spending power. Expenditure will probably increase. Under present assumptions the shortfall of revenue might rise to about £3 million a year by 1970-71 and to over £10 million a year by 1975-76. At some stage during the rundown the Singapore Government

will no doubt feel impelled to increase their present expenditure on defence and internal security. If it was considered necessary to double this

expenditure a further £9 million of annual expenditure would be necessary for

this purpose alone. Thus by 1975 the deterioration in the budgetary position

as a result of the withdrawal might amount to something of the order of

£20 million a year representing about 30 per ⚫ent of prosent budget receipts.

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