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

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interests, to provide aid and to encourage private capital investment; in the light of our withdrawal it is questionable whether there is any prospect of succeeding in this in the circumstances of our withdrawal.

but

For

all these reasons the only safe assumption is that we would have to bear the bulk of the costs of such remedial measures as might be agreed upon and these would have to be found as an addition to the sums needed to maintain aid

commitments elsewhere.

45.

It may be urged that since Hong Kong has achieved such success with her export industries, there is no reason why Singapore should not follow suit. In the longer run the economy of Singapore, if it remains relatively isolated from Malaysia, will no doubt have to try to develop along lines analogous to the development of Hong Kong. In Hong Kong, however, the rise of industry is largely attributable to massive immigration of relatively skilled workers combined with a large influx of Chinese capital, enterprise and know-how. These conditions do not apply in Singapore where a massive reorientation of the economy towards export markets could not be achieved at all quickly. In addition, available information suggests very strongly that production costs in Singapore are at present appreciably higher than in Hong Kong.

and the The labour force will have to acquire more sophisticated skills; altogether wider basis of entrepreneurial abilities and attitudes cannot quickly be generated.

46. In the long term the aim should no doubt be to create additional incomes through the provision of productive employment opportunities. However, as has been indicated above it is doubtful whether this will in fact be possible, within the timescale of our withdrawal, for lack of the

It would markets on which viable additional industries could be based. certainly not be feasible to create jobs in viable productive enterprises at a rate which would absorb the unemployment created in the early years of the rundown. We have to think, therefore, in terms of palliative measures designed to cushion the initial shock,

Redundancy Payments

47. Presumably there will be redundancy payments (and pensions where appropriate) for those discharged. Over the whole period Ministry of Defence figures suggest that these payments to locally engaged staff of all categories will cost not less than £12 million spread over the whole period

of the withdrawal.

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