S'pore system remains fair and sustainable

Deputy Prime Minister Tharman Shanmugaratnam yesterday wrapped up three days of debate in Parliament on Budget 2015. Here is an edited excerpt of his speech, with a focus on the CPF system, balancing the Budget and benefits for middle-incomers relative to the taxes they pay.

WHEN you take all the taxes that people pay and all the benefits that they receive through our different schemes, how does it add up? It's basically a progressive system and one that's being made more progressive, where the higher-income households contribute the bulk of the taxes and the lower-income households receive the bulk of the benefits. But it's also one where the middle income receives more benefits than it used to.

If you take the top 20 per cent of households, they pay 55 per cent of all taxes, when you add up income tax, property tax, GST, car taxes, maid levies, everything. And they receive 12 per cent of the benefits. If you look next to the middle 20 per cent of households, they pay 11 per cent of all taxes and they receive 20 per cent of all benefits. When I say middle 20 per cent, I mean those between the 40th and 60th percentile. And the lowest 20 per cent of households pay 9 per cent of all taxes, largely through the GST, but they receive 27 per cent of all benefits. This is a progressive system.

And I should add that we have also shifted significantly in the weight being placed on structural transfers, permanent schemes as distinct from temporary schemes that we're able to afford when the Budget is in good shape. Ninety per cent of our transfers last year comprised permanent schemes.

The system is not just about redistributing from the rich to the poor, it's also about the middleincome group. Very importantly, the middle-income group in Singapore are net beneficiaries of our system. And there's been a very significant increase in the amount of benefits the middle-income group have got over the last 10 years. For every dollar of tax paid by the middle-income group, they now get a bit more than $1.70 back.

The benefits that our middle-income group get are not like what you see in the Scandinavian countries or the United Kingdom. Some of them have free health care, free tertiary education, but they are paying for it. And in most of these societies, with the Scandinavian countries being a classic example, in fact their tax systems are not particularly progressive. They rely mainly on the VAT (value-added tax) and high income tax for everyone to be able to flow back the benefits. Everyone is paying for the free benefits that they're getting. And when you add it all up, the benefits they get from a dollar of tax they pay in the middle-income group is in fact less than ours.

We're a low-tax regime. We try to keep the burden of taxes on the middle-income group low. We target our benefits in health care, in education, in every area for the low-income group and the middle-income group. Everyone co-pays for what they are getting, so we know that nothing is for free. We co-pay, we keep taxes low and the net benefits are ones which the middle-income group gains from.

Now let me go on to explain what this adds up to in terms of our thinking, our values, our philosophy. We have tilted our system deliberately to help the lower- and middle-income group, and in the last five years there's been a significant tilt. The Government is playing a more active role in redistribution. But the key to building a stronger society is not in how much we're doing to redistribute. It is about how we strengthen the values that undergird and sustain a fair and inclusive society. It's not how much we're doing but how we do it. And whether what we're doing helps to strengthen the values and the habits that sustain the fair and inclusive society.

A stronger social compact

AT THE heart of it all, we're seeking to build a stronger social compact for the future, a compact where personal and collective responsibility go hand in hand. Our approach is quite different from the cradle-to-grave welfarism that was developed over 50 or 60 years in many of the advanced countries. Our approach is about empowering people and aspirations, and rewarding responsibility throughout life. It's about encouraging and empowering people to learn at every age, to work, to take second or third chances and to make meaningful contributions through our careers, whatever the job. Helping people to own a home and, whether it's breadwinners or homemakers, to raise the next generation. And helping people, helping everyone to make the most of life even in our senior years.

It's also about developing a broader cultural responsibility in our society. It's not just about everyone doing their part, rich or poor. It's also about being able to count on each other, and those two things go together. We are able to count on each other now or in the future only if everyone plays their part, if everyone plays their responsible role. Our whole approach therefore has been to avoid a zero-sum game between personal and collective responsibility, and get a compact where personal and collective responsibility in fact reinforce each other.

We cannot solve problems if we leave it entirely to the market or the natural workings of society. It will lead to widening income gaps that reflect not just people's different abilities and efforts, but also the advantages and disadvantages of the backgrounds they start with. And it will sap the morale of our society if we just leave it to the market to sort things out. Neither can we think the social policy interventions alone can create a fair and cohesive society without a culture of personal responsibility in the family, in education, at work and saving for our future. It will not create a fair and inclusive society, and it will sap the vim and energy of our society at every level.

So I think we need some humility, actually in every society we need some humility as to what works in social policy. Take truths from both the left and the right, but we must have some humility because one of the lessons we've learnt from the policy interventions in the more mature societies is that lasting improvements in society are not easy to achieve. And it's certainly not just a matter of putting in more government resources. Our real task is to find ways to help people not just by providing them with more resources but helping them to rebuild family lives, making sure we've got empathetic teachers, mentors, community volunteers, and helping them to build circles of friends and peers around them, people with a positive and aspiring outlook on life. We must preserve our Singapore ethic of work, effort and responsibility and collective responsibility for the community. I think that sums it up.

Sustainable spending

LET me now talk about a critical issue which is sustainability.

Fairness is not just about what we do today, how we distribute taxes and benefits, who takes what share. It's not just about the current generation. We must build a fair and inclusive society for today's generation, our children's generation and generations into the future. That's the difficult task.

There are countries that are more progressive than us. There are countries that in fact achieve a very high degree of transfers and redistribution. But it's worth watching them and how they change over time, how their values change and also whether they've been able to sustain what they're doing. The whole experience of the UK, Europe and to some extent the US has been one of building up unsustainable social welfare systems.

The UK is a very good example. With each electoral term, each party and each government coming into power has increased social spending, particularly on the elderly. It's a vote buyer. But the system is now unsustainable and they are paying the price. Unfortunately the ones who are paying the price are the young and the lower-income group. Spending in the UK in the last few years has been cut for children. In fact, between 2009 and 2012 - I don't have the more recent data but I know that it's been intensified austerity - real spending per child in early education fell by 25 per cent.

Spending was cut on programmes to strengthen childcare, subsidised early education for disadvantaged children, significant cut, more than a 30 per cent cut on these early education initiatives. Spending on social services was cut. And it's not as if it was to help poor retirees because the whole weakness of their system was to extend benefits to everyone, including the upper middle-income group and the rich.

So the rich get generous pensions. They get winter fuel allowances. They get free transport. They get everything. And even a Conservative government today has committed to preserving those benefits for the rich and the upper middle-income group at the expense of the young and the poor. That's how inequitable it is.

We've got to sustain a fair and inclusive society for generations, not one election at a time. The US faces the same situation. It has lower taxes than many European countries, but the same basic flaw of looking at things short-term and through a highly political lens. What's happened in the US is they - and the Obama administration has recognised this - are severely constrained for the future in investing in their future. The reason is because, first, the interest on the debts they've accumulated is going to grow as a share of their budget. Second, the entitlements that have been promised are also going to grow because people are getting older.

An OECD report in fact stated quite forthrightly, governments will have to make tough choices about how fair it is to ask current workers to pay taxes to support pension payments of a level that they themselves won't enjoy. So we've to avoid these basic political flaws. We have to avoid them.

I'm glad members have raised caution and have asked the right questions, which we've to keep asking as we move along. And we've to make sure that we never cross the red line of failing to balance our Budget within each term of government, ensure sustainability, ensure we never run down our reserves. This is why in fact we've written rules into our Constitution. We've gone further than most other countries by writing the rules into the Constitution to prevent the Government from running a deficit within its term of government, accumulated deficit - except in a crisis, when you have to go to the President and get his permission to draw on reserves.

We've written it into the Constitution so that it's enshrined, it's part of our political culture, no matter who's in government.

Let me clarify that the government Budget has been in a healthy position. For this year, the deficit is almost entirely due to funds being set aside for future investments. It's not a deficit of spending over revenues. It's a deficit because we're setting aside funds that we've earned in this term of government for the future. And until this year, during this term of government, we've not recorded a deficit in any year before setting aside funds for the future. For example, the small deficit we ran last year would have been actually a significant surplus had we not set aside money for the Pioneer Generation Package.

So essentially what we've been doing is prudent budgeting. We've had a temporary surplus in revenues, particularly because of the revenue boost from the property cycle, and rather than spend those revenues in the current term, which is what some other governments do when they've got a bonanza in revenues, we have set it aside. And that should remain the way we go about fiscal planning in the future. When you have a temporary boost of revenues and you know the cyclical reasons why your revenues exceed your spending, set it aside for the future, don't spend it immediately or don't spend all of it immediately. That way we avoid feast and famine in our spending.

Temasek's investment strategy

LET me go on to two major issues that arose in the debate that relate to sustainability. The first has to do with the net investment returns framework and the use of reserves, and the second is the CPF system as well as Silver Support.

Several MPs raised questions about sustainability of our system of drawing income from reserves and making sure that we're not disadvantaging future generations. The net investment returns (NIR) framework in fact underlines our commitment to preserve the value of our reserves and to allow it to grow with the economy over the long term. It allows the Government to tap part of the investment returns for current spending and it strikes a fair balance between present needs and the interest of future generations. We put a lot of thought into it when we moved the constitutional amendment in 2008. It ensures that we spend from our reserves in a disciplined and sustainable way, first by spending at most 50 per cent of expected long-term returns, which means that at least 50 per cent are kept in reserves.

Second, by spending based on real returns, not nominal returns, so that we preserve the international purchasing power of our reserves. Otherwise, if we have high inflation globally and you earn higher nominal investment returns and you spend more on that basis, actually what you're doing is reducing the real value of your reserves for the future. And we've also provided stability in the NIR by spending based on expected long-term returns, not actual returns, and this recognises that actual returns will be more volatile than long-term expected returns but we smooth our asset base.

This is an important point - that the two ways in which we achieve stability over time, first is spending based on expected returns rather than actual returns, which can be volatile, but second, we also smooth our asset base. So, for instance, if there's a boom in the asset markets, a boom in asset prices, and the value of our reserves goes up, the value of the asset base goes up, we don't spend on the basis of that boom in asset prices, we smooth the asset base so as to discount the latest changes in prices. So if there's a boom in asset prices, it doesn't mean you spend more NIR because we do a smoothing of the asset base. So these are rules that we've written in that help ensure that there's a fair balance between current and future generations.

There have also been some questions understandably in the media about whether bringing Temasek into the NIR framework will impact Temasek's investment strategy. And the same question can be asked about the GIC and the MAS. So let me assure members that this will not be the case for Temasek, just as it is not the case for the GIC and the MAS.

The NIR framework provides a formula to work out how much the Government can spend from reserves. That's what the NIR framework is about. It's not based on actual returns but on the expected long-term real rate that we expect our investment entities to earn within the framework. So it is not a dividend policy in disguise that determines how much cash Temasek has to pay the Government each year, and if anything, by focusing on expected long-term returns we ensure that at no time in the future does the Government put pressure on our investment entities to sell assets, realise capital gains and pay more dividends. It keeps the investment strategies independent of the spending rule of government.

The natural question that arises, of course, is that if the Government is spending on the basis of expected returns, which will not year by year be matched by actual returns, where then does the Government obtain the funds, the cash flow for the NIR to go into the Budget? This is a liquidity management issue, not to do with the spending rule and not to do with investment strategies or investment entities. It's a liquidity management issue which I had addressed in Parliament when we first introduced the NIR framework, and I won't go into the details again but we have a variety of sources of liquidity and cash flows that will enable us to manage the Government's liquidity needs independent of the investment strategies of the three entities - Temasek, GIC and MAS. So let me assure you that what we are doing does not change investment strategy in the least.

The strengths of the CPF

I GO on now to the second important issue in sustainability, which is the CPF system and Silver Support. The CPF system is different from the main systems that we see abroad. We've tried to avoid the major disadvantages of these other systems while being able to take some of the advantages.

The CPF system is both individual and collective. It is first and foremost built on individuals' savings and responsibility. But there's a strong element of collective responsibility. The Government provides support through the Budget to lower-income members and provides assurance to all. And through CPF Life, we are pooling risks to support one another in the face of life's uncertainties throughout retirement. It is progressive, like most of the collective pension schemes. But it is financially sustainable, unlike the collective pension schemes. It places no investment risk on the individual, unlike the defined contribution schemes of individual retirement accounts.

The reason the CPF system is both progressive and sustainable, which is a rarity, is because the transfers that take place in the CPF are from the government Budget, not transfers from one generation to the next. Or promises made to the current generation which eventually have to be funded by the next generation. It is transfers that are achieved through the government Budget - and a government that has a Triple A rating. That is the strength of the CPF system. It is sustainable, it is progressive but it achieves its progressivity through transfers from a Triple A-rated Government. And that's why it's important that we retain a whole system of fiscal discipline, prudence and planning for the future. It keeps the CPF system both progressive and sustainable.’

The Straits Times

www.straitstimes.comPublished on Mar 06, 2015

From 'study book' or du shu to learning with joy for life

This is an edited excerpt of a speech by Education Minister Heng Swee Keat in Parliament yesterday.

IN 1965, education meant du shu or "study book". Our pioneers had a sense of where they wanted to be in the future, where they were, and worked hard to bridge that gap. The big gap then was basic literacy and numeracy skills - so "study book" made sense as they learnt the three "Rs" - or reading, writing, arithmetic.

Many became literate and numerate. We then built on this education system. At critical points, we made important choices to adapt and change. Educators, parents, students responded with spirit, and each wave allowed us to make further progress with purpose. But there were also inadvertent negatives. In our mind, "study book" became increasingly about exams, grades and qualifications.

A strength - in focusing on academic grades - can be overdone and become a weakness, as we leave little time to develop other attributes that are necessary for success and fulfilment.

Students tell me of the stress they faced because of the high expectations placed on them. The chase for better grades fuelled a tuition industry. It created a vertical stacking of qualifications, as well as the tiering of schools in the minds of parents based mainly on academic results - a hierarchy of grades.

We are not unique in this. The same "study book" culture that enabled the three East Asian dragons - South Korea, Hong Kong, Taiwan - to make great strides is also generating the same, if not even greater, pressure in their societies.

Like our pioneers before us, we have to ask anew: Where do we want to be in the future, where are we today, and how do we make the leap?

The future will be more uncertain, volatile as the global economy and political order change in unpredictable ways. An ageing population will create challenges that we cannot totally foresee. A younger generation that is digitally connected can either be more united or more divided.

The nature of jobs will also change. Many existing jobs will disappear. Smart machines and lower- cost workers elsewhere will take these jobs. We have to change jobs, maybe several times over our lifetime. But jobs that need uniquely human qualities cannot be displaced by machines, and will become more valuable.

Traits like creativity, inventiveness, adaptability, socio-emotional skills, and cultural and global awareness will give Singaporeans an edge. Some of us will create jobs for others as entrepreneurs. And if our economy grows well, more jobs will be created. All these present new and multiple pathways for success.

At a crossroads

WE ARE at a crossroads. We have two options.

We could continue with the "study book" path, with a narrow focus on grades and exams, and descend into a spiralling paper chase and expanding tuition industry, as many of you have warned. Employers choose not to invest in employees, relying wholly on academic qualifications to determine who gets the job. Educators drill and test, and see their duty as helping students obtain the best exam grades possible. Parents obsess over grades and spend ever-increasing amounts of resources to give their child an edge over other children. And students chase the next point, and spend most of their time going for more tuition and enrichment in very narrow areas.

Stress levels in society climb, and the system churns out students who excel in exams, but are ill-equipped to take on jobs of the future, nor find fulfilment in what they do. And unemployment or under-employment becomes pervasive.

Or we can have another outcome.

We can act with boldness and resolve to embark on a major transformation. We will need collective will and action by employers, teachers, parents and students and society at large.

Where employers look beyond academic qualifications in hiring and promoting the best person for the job, where bosses support employees in skills upgrading, where educators focus on holistic education, building a strong foundation of values and the capacity to learn, where our institutions of higher learning play a leading role strengthening the nexus between learning and work, learning and life, where parents recognise every child's unique strengths, and do their part to build their children's character, where students flourish through a range of academic and co-curricular activities, take different pathways to success and grow up to be well-rounded.

The economy stays resilient and flexible, with high levels of employment, and many opportunities. High skills, high productivity, high wages. And our society and our people continue to be caring, harmonious, gracious, cohesive. And we do not see education as a race among our children.

Charting this new territory will require us to once again be pioneers.

We developed new ways of learning in our schools, made every school a good school, expanded applied pathways in tertiary education and, in this Budget, outlined a series of SkillsFuture initiatives that built on Aspire's (Applied Study in Polytechnics and ITE Review) recommendations. All these changes have laid the groundwork for a transformation that creates a better future for Singapore, anchored in deep skills and strong values. But this future will belong to us only if we, as a people, shift our mindsets about education.

This is not about "study book" or du shu.

It is about learning in every domain, any time, anywhere for a purposeful, fulfilling life. In other words, we need to live the pioneering spirit, beyond learning for grades, to learning for mastery, beyond learning in school, to learning throughout life, beyond learning for work, to learning for life.

Learning for mastery

THE first major shift is to go beyond learning for grades, to learning for mastery.

When I was in the Police Academy 30 years ago, more than 30 years ago actually, one of my pioneer instructors was Mr John Chang. He did not have high academic qualifications, but he was, in my mind, one of the best instructors - he knew the law, he knew how to deal with tense situations, he knew how to teach.

He explained to me that after handling each case, he would reflect on how he could have done better. He would imagine in his mind scenarios - how should he have reacted if the criminals that he was dealing with had been more violent, if they were armed with a firearm, or if the victims were less cooperative, and so on and so forth.

He studied on his own, he attended classes, he asked his peers, he asked his seniors. Everybody he could get, he would ask. John was one of the few police officers who started as a constable, got many promotions and went all the way and retired as an assistant superintendent of police. Quite a feat in those days.

I learnt a lot from John as a very young officer about what it means to be an effective learner, and how one achieves mastery.

He was self-directed: No one told him how to learn, but he did so on his own. He was reflective: He thought through his own experiences and learnt from both mistakes and successes. He learnt in bite-sized modules, picking up what he needed, when he needed. He kept an open mind and learnt from everyone, everywhere, at any time. He was disciplined: Learning was not left to chance, but built into his everyday routine. And he was passionate: He cared deeply about what he does.

We should aim to be a nation where Singaporeans develop mastery in every field, Singaporeans who are resourceful, inventive and break new ground. This will take a collective effort across our schools, institutes of higher learning (IHLs) and industry.

Learning with interest and joy: An important aspect of learning for mastery is to match our students' strengths and interests to opportunities in our schools and IHLs, in careers and enterprises. A recent innovation in our schools is the Applied Learning Programmes or ALPs, in fact in almost all our secondary schools, and this is part of our Every School A Good School movement.

In fun and creative ways, our students apply various domains of knowledge to solve complex, real- life problems in their field of interest. Hillgrove Secondary has an ALP on flight and aerospace. Students learn fundamental aerospace theories, and apply maths, science, design and technology by building and flying their own model planes. Students go on to take advanced elective modules in aerospace, where they fly in flight simulators and learn how planes defy gravity.

Rayner Lee really enjoyed learning at Hillgrove and in fact he's now doing aerospace technology at Nanyang Polytechnic and he says: "I chose Hillgrove because of the Youth Flying Club CCA. I wanted to be a pilot. My parents and school teachers encouraged me to take up the Private Pilot Licence (PPL). Now that I have my licence, I hope to join the RSAF (Republic of Singapore Air Force) as a pilot."  Well, I hope Rayner flies high.

Mastery in whichever field: Different ALPs open up different possibilities for students to put knowledge into action and bring learning to life. Learning becomes relevant and engaging for every student, in every school.

We are not channelling students to specialise early. In fact, deep skills acquired in one field can be transferred to another.

Ngee Ann Polytechnic uses the technical know-how in building unmanned aerial vehicles or UAVs to build unmanned underwater vehicles or UUVs to clean ship hulls - so transferring the skills from air to sea.

A team in ITE working with the Singapore Zoo applied medical technology to design an incubator, and succeeded in increasing the hatching rate of reptile eggs from 25 per cent to 75 per cent.

With more choices, we need good education and career guidance or ECG. There are many domains and fields that students could explore and develop deep skills in - whether it's in design, business, arts, music or sports. By exposing students to possibilities, we empower them to make better choices and choose suitable pathways. ECG curriculum in schools, ITE and polytechnics will be enhanced and, by 2017, we'll have a professional core of ECG counsellors and an online ECG portal that shows many exciting opportunities - enriched by our SkillsFuture initiatives.

Learning throughout life

THE second major shift that we need to make together deeper is to go beyond learning in school, to learning throughout life.

Fifty years ago, Seletar was better known for the smell of pig farms. And 50 years on, I visited Seletar to witness the delivery of our first Rolls-Royce Trent 1000 jet engine - made-in-Singapore for a Singaporean company, Scoot. A world of difference.

Ravinder is a team leader with 24 years of aerospace experience. You would have thought that he knows everything, but he told me: "To me, every day is a learning process." And this gentleman was serious when he said that.

It turned out that his son was also interested in aerospace engineering. So Ravinder decided that he, too, should return to school to pick up new skills and more skills, so that he can mentor his son, and pass on his skills to the next generation. He enrolled in Temasek Polytechnic's Diploma in Aerospace Engineering and is now six months into his course. Now, all that, while working hard at Rolls-Royce mentoring his young colleagues, like Cheria and Siti.

Now, Cheria is technically Ravinder's "schoolmate" in TP, as she is also pursuing a Diploma in Aerospace Engineering. But she is one-third his age - about. As an intern, she is learning at the workplace, even as Ravinder is learning at TP.

Siti, an ITE student in aerospace technology, was also part of the team. While working at a bookshop at Changi Airport, she saw the aeroplanes taking off and it piqued her interest. She started to wonder how do planes fly. So, today, she is a Rolls-Royce ITE scholar, thrilled to be building an impressive and complex engine with some 30,000 parts and learning all that as an intern. So you see it's not just about learning technical skills.

Ravinder, Cheria and Siti are at different stages of life but all actively learning to be better, to succeed both at work, and in life.

Self-directed learning

AS WE resolve to learn for mastery and learn throughout life, we need to rethink a few issues about learning and the significance of the changes.

The OECD (Organisation for Economic Cooperation and Development) did a recent survey of adult skills. Workers in Japan ranked highly in their skills, but ranked badly in terms of how well these skills are utilised on the job. At the opposite end, workers in the US ranked poorly in skills, but ranked among the top in using skills on the job - so whatever skills they have, they use to the fullest.

Besides the multiple pathways in our institutions of higher learning, you can now create your own learning pathways - build a portfolio of skills, just in time, tailored to your own needs, at your own pace. You can stack modules towards a qualification, or just choose relevant modules. It empowers each of us to take charge, direct our own learning, and build our own unique skills map.

This self-directed, independent learning must start young. Our teachers must not spoon-feed our students and give them model answers.

In life, there are no model answers. I once had a parent who wrote to me to argue for an extra mark for her child's term test in school. Rather than seek an extra mark in tests, let us nurture our children to make their mark in society.

We have to encourage our children to be independent, self-directed learners, skilful at figuring out their own way.

Professor Tan Tai Yong made an important point that we must not over-protect our children, so that they can develop adaptive resilience and learn to deal with uncertainties in life. But if we intervene when a child did not get the extra mark, how does he or she develop that resilience?

So let us start early in our schools and make our children self-directed, independent learners. Let us all take a collective pause and see whether the way that we are bringing up our children in school, at home, is helping them to develop that independence, that self-directed learning, that resourcefulness and initiative, or whether we are spoon-feeding them, that they are going to lose that; that when the crutch is taken away, they cannot go out and create and invent and build new things.

The Straits Times

www.straitstimes.comPublished on Mar 07, 2015

Many helping hands in Singapore

Social service offi ces are just one of the elements in Singapore’s social support network. Insight outlines the four pillars of social security here and selected support programmes and providers for the needy.

How the Singapore Government is spending its dollars in 2015

Here is the link to a site that shows you the breakdown on how the Singapore Government is allocating its finances in 2015. For FY2015, the Overall Budget Balance is projected to be a deficit of $6.7 billion or 1.7 per cent of GDP. However, this deficit will be covered by past surpluses with no draw on past reserves.

http://www.straitstimes.com/STI/STIMEDIA/Interactives/2015/02/budget_singapore_2015/index.html

PRESERVING SINGAPORE'S HERITAGE

Digging up our history

By Derek Heng And Kwa Chong Guan For The Straits Times  Feb 21, 2015

THE archaeological excavation at Empress Place, which Minister Lawrence Wong visited last week, is the latest in a series of excavations started 30 years ago.  Other places recently excavated include the back of the Victoria Theatre before its renovation, and the space between the old Supreme Court and City Hall before it was built over to connect the two buildings for a National Art Gallery.

The driving force behind these excavations, 30 years ago and today, remains the same. It is to search for and recover any historical artefacts before redevelopment takes place. The limited, albeit detailed, Chinese and South-east Asian historical records suggest that a settlement existed at the mouth of the Singapore River since the end of the 13th century, which grew during the 14th century into a kingdom and port-city called Singapura, lasting for a century. Apart from Sir Stamford Raffles and John Crawfurd, the second governor of Singapore, who gave early 19th century eyewitness accounts of the remnants of this settlement, there has been no further confirming evidence.

It was only in 1984 that such evidence was recovered when the old National Museum invited Dr John N. Miksic, an archaeologist then teaching in Indonesia, to conduct a trial excavation on Fort Canning, a site which had been extensively developed and landscaped. Against the odds, an undisturbed layer of soil and earth datable to the 14th century was found around the old Keramat Iskandar Shah. Further excavations over the years have confirmed the conclusions drawn by historians from historical texts on Singapore's 700-year legacy.

From glass fragments and pottery shards to bronze coinage and Buddhist figurines, the current excavation at Empress Place is continuing to provide further testimony to Singapore's deep roots as a regional port.

For too long we have dismissed the stories in the Malay Annals of a wandering prince landing on Singapore, seeing what he was told to be a lion, and deciding to establish a kingdom which grew into a "great city" under his successors. The huge amount of artefacts recovered is testimony to the Annals' claims that Singapura was "...a great city to which foreigners resorted in great numbers so that the fame of the city and its greatness spread throughout the world".

Both archaeological data and textual records have now enabled the National Museum to frame Singapore's history as a nation-state as one epoch of a much longer experience as a settlement, port-city and state that has lasted for much of the last millennium.

The archaeological evidence also corroborates textual information, from the Malay Annals and Portuguese accounts, that this port was eclipsed in the early 15th century, when Singapura was attacked by rival Javanese forces and its last ruler fled to establish another emporium named Malacca.

A large corpus of 16th and 17th century Portuguese and Dutch documents, including maps currently exhibited at the National Library, records a thriving port just west of Tanjong Rhu. Under the administration of a port-master appointed by the Johor sultans up the Johor River, it was linked to the capitals of the Johor sultanate at Kota Tinggi and further downstream to Johor Lama.

Additionally, the Flemish gem trader Jacques de Coutre had provided us a vivid record of the trading world of South-east Asia between 1593 and 1603. His autobiography, found only in the 1960s and recently translated by Associate Professor Peter Borschberg (National University of Singapore), records that Singapore was a port which was "...one of the best that serves the (East) Indies". He advised the Portuguese king to take over the island and build forts on it to control the sea lanes to China. This linkage is confirmed by the very scant but similar body of Chinese porcelain shards recovered from a series of Johor River sites and the Kallang River estuary.

Unfortunately, we missed the opportunity to recover a larger body of archaeological evidence in the 1970s, when the Kallang estuary was being dredged. The dredging work brought up a lot of Chinese porcelain shards, which would have confirmed the existence of a thriving port.

However, the National Museum at that time was not equipped to appreciate the importance of the finds, and they have since been lost to the country.

Since 1984, the 30-year history of archaeological excavations here has been one of scrambling to salvage what can be saved before a site is redeveloped. Singapore is not alone in this. Other cities, from London to Xian, have had to confront the dilemma of redevelopment or preservation of historic sites.

The issue is not only of archaeologically significant sites, but also other historic sites and buildings. How do we decide what to do with the rest of the Bukit Brown cemetery after the expressway is driven through it? How do we plan what to do with Pulau Ubin?

Should a government agency, with the mandate and funding, decide the fate of a potentially historically significant site or building for redevelopment - leaving the growing number of civil societies and non-government organisations (NGOs) passionate about these sites as locations of our social memories defining Singapore, having then to react and challenge the development plans?

There must be a more efficient way of engaging each other to debate such issues other than as in a school debate, with only one side winning.

A number of countries and territories, including Hong Kong, have been grappling with these issues and have been working on various planning frameworks which bring together the diverse stakeholders and interested parties - government agencies, landowners and developers, and NGOs and civil society groups - to discuss and debate how to conduct a heritage impact assessment of a potential historic or memory site.

Perhaps we should move towards some form of a more open and transparent heritage impact assessment to engage and debate these issues of the imperative for urban redevelopment and preservation of historic sites. After all, such sites are the locus of our social memories, anchoring us to this island and defining us as Singaporeans.

stopinion@sph.com.sg

Derek Heng is associate professor of humanities at Yale-NUS College, and Kwa Chong Guan is senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University.