Singapore—Lee Kuan Yew founded Singapore and built the city-state from virtually nothing into a thriving economy and a leading Asian financial center. His son, Lee Hsien Loong, has been prime minister since 2004 and is grappling with new realities: a more politically empowered and tech-savvy generation, a rising China, and an American superpower intent on pivoting toward the Asia. Prime Minister Lee spoke this past week in Singapore with Lally Weymouth about regional tensions, the arrival of casinos in his country, and whether his job ever gets dull. Excerpts:
Lally Weymouth: What do you think of the Obama administration's pivot toward Asia?
Lee Hsien Loong: We are all in favor of the U.S. taking an active and constructive interest in Asia. I'm not sure I would describe it as a pivot. First, it suggests that this area has been neglected, which isn't quite so. Secondly, you really want a long-term, implacable, inexorable presence, and I'm not sure if the pivot conveys that nuance.
L.W.: Does "pivot" convey that the United States could pivot back to the Middle East?
L.H.L: Yes, I think so, because America has got such broad interests around the world and such pressing issues to deal with in so many places. Asia is just one of them, and it is a peaceful part of the world. It may not be on the front burner.
L.W.: Some say that the Chinese perceive the United States as weak and allege that the administration backed down on the Scarborough Shoal [contested by the Philippines and China in the South China Sea], allowing China to push the Philippines around. Now Washington is worried about a possible Japan-China confrontation in the East China Sea. Do you see the U.S. administration as standing up strong?
L.H.L: The U.S. is not a claimant state in the South China Sea or in the China-Japan dispute over the Senkaku Islands. But, of course, the 7th Fleet has been a presence in the region since the Second World War, and it is the most powerful fleet in the region. I think it has a stabilizing influence on the security of the region ... encouraging countries to exercise restraint in dealing with these very difficult territorial disputes.
L.W.: Are you concerned about the rising tension between China and Japan?
L.H.L: There are nationalist sentiments on both sides, and it's an issue where neither side can afford to be seen to back down. We hope neither side escalates and triggers something unintended. I think something can happen. I don't think it's the intention of either side to spark a conflagration, but when you have ships at sea coming close to one another or aircraft—mishaps can happen.
L.W.: How do you see China under its new leadership?
L.H.L: I think their preoccupations are with their domestic issues, which are considerable. But at the same time, they see their sovereignty and territorial integrity as a responsibility of any Chinese government to uphold and protect. And how flexibly they define that and how the give-and-take works out—well, you have to watch the actions as well as the rhetoric.
L.W.: In the speech you gave in China last fall, it seemed as if you were advising the Chinese to tread lightly.
L.H.L: Yes, because they have broader interests. Their interests are not just the [islands] which are in dispute or the resources, but their larger reputation in the world as an emerging power. Are they going to be benign and not only play by the rules but leave space for other countries that are not as powerful to prosper? One of the reasons America is welcome in Asia is because with America ... there is a certain idealism and a certain bigness of soul. You want the region to prosper, you want countries to do well, and you are prepared to help them.
L.W.: The Singapore-U.S. relationship is very deep.
L.H.L: It's a long-standing relationship that covers many areas.
L.W.: You are going to Washington next month to visit President Obama?
L.H.L: I hope so, yes. The last time I visited a president was in 2007, when George W. Bush was president.
L.W.: What about the Trans-Pacific Partnership, which is currently under negotiation? What is your assessment of this trade agreement?
L.H.L: I think it's an important deal strategically for Asia-Pacific. It links both sides of the Pacific, the developed as well as some of the developing countries. It is a good standard and yet practical, and it will make a significant contribution to economic integration in APEC [the Asia-Pacific Economic Cooperation group].
L.W.: Is there any chance it will be passed?
L.H.L: That depends on the Congress, not on us.
L.W.: It seems the Americans are trying to protect their industries, and at the same time they're saying that other countries should have a level playing field.
L.H.L: Of course. That's what trade negotiators start off saying. But if you can move beyond that starting position, then you can have a good deal.
L.W.: The United States is losing market share in ASEAN [the Association of Southeast Asian Nations] to China and other countries.
L.H.L: For many countries, the biggest partner is China. ... But in terms of an economic partner, the U.S. is very important—your investments, your technology. I don't think the Chinese are in the position to match that for a long time.
L.W.: Do you worry about the rise of China?
L.H.L: Everybody here would like to benefit from it. At the same time, we would like to remain friends with all our other friends, including the U.S., India, and the E.U.
L.W.: Is that a hard balancing act?
L.H.L: No, we would like to have our cake and eat it and be friends with everybody. As long as our friends are friends with one another, we are OK.
L.W.: Does that mean you want the United States to be more involved with China?
L.H.L: We want the U.S. to have constructive and stable relations with China. That makes it much easier for us. Then we don't have to choose sides.
L.W.: Your country has enjoyed enormous [economic] growth.
L.H.L: We have been lucky. [We] depend on a stable international order.
L.W.: Now, you are trying not to let so many immigrants come here.
L.H.L: We are trying to manage our population. It is necessary. We are a small island—700-odd square kilometers. There is a finite limit to how many people can be accommodated, and we have to control the inflow. If we don't do anything, millions of Chinese would arrive at our shores.
L.W.: How will cutting down immigration affect small business?
L.H.L: Small businesses will find the tightening very difficult.
L.W.: Why is it smart to slow down the economy?
L.H.L: We are accepting a lower growth because we can't just expand our workforce without limit and constraint.
L.W.: Is that popular with the population?
L.H.L: The population feels the physical pressure of the foreigners coming and working here, some [of whom] are prepared to work longer hours or accept less. I don't think everybody fully appreciates the consequences of slower growth, which are very serious. You need growth to have the resources to build the infrastructure, housing, to uphold the standard of living.
L.W.: In the last election, your party lost some seats. You will have to manage a [political] transition with a younger generation, which expects more.
L.H.L: It's a different generation, a different society, and the politics will be different. ... We have to work in a more open way. We have to accept more of the untidiness and the to-ing and fro-ing, which is part of normal politics.
L.W.: Is that hard for you?
L.H.L: It is a major change, of course, which we hope we will be able to navigate safely over a period of time and not suddenly.
L.W.: To make [government] more transparent and open to social media?
L.H.L: It's completely open to social media. Previously, everything was orderly and predictable. Now there are many more voices, views and interests ... and the outcome is a lot more difficult to predict, and the reactions are more difficult to judge.
L.W.: You grew up as the son of the most famous man in this country.
L.H.L: I did not choose my father, but I am proud of him.
L.W.: You decided recently to allow gambling in Singapore. Has it been a boost for the economy?
L.H.L: For a long time, we fought in principle against casinos. Finally, we were persuaded it's big business and if we were not in it, someone else would be. It was becoming increasingly more difficult to shield our people from gambling. We can't be the nanny.
L.W.: Economically it's worked out very well.
L.H.L: Very well. The social impact—we'll have to wait a few years to see.
L.W.: Are you worried that the United States has such a huge fiscal imbalance?
L.H.L: To fix it, you don't actually have to do very drastic things. If you could make an adjustment on health care, if you had a gasoline tax—that would make a big difference.
Your problem is in the short term, you don't really want to shut down your spending and crash the economy. But in the long term, you don't want to keep on spending and then go bankrupt.
L.W.: Is nationalism in China and Japan a real problem for the region?
L.H.L: I think it's a real factor, in China particularly. It is growing because the young generation, who have not experienced either the war or the Cultural Revolution, but have grown up at a time of stability and affluence, have the most nationalistic view of China's role in the world. So how they play their cards when they come to positions of responsibility will make a difference.
L.W.: Does the PLA [People's Liberation Army] have a lot of say in China today?
L.H.L: I'm sure they have an influence, but some very well-informed analysts believe the [Communist] Party is firmly in control of the government. I think on certain issues, the PLA will have a lot of say and will probably be doing their own thing. When it comes to territorial issues, I would imagine that this is handled at the top level.
L.W.: What's your assessment of the new Chinese leadership?
L.H.L: They are all able people. We have met quite a number of the members of the Politburo Standing Committee. They are tested. They have played many different roles in China, and I think they want the country to grow. I think they have got in [President] Xi Jinping a leader to take it to the next step forward.
L.W.: Which is where?
L.H.L: They have to make the economy continue to grow and yet [make] significant economic reforms. They have to adapt to a society that is rapidly changing with social media and the growing middle class. ... And they've got to find their way in the world and realize they are now more powerful than they used to be.
L.W.: What are the key issues for Singapore itself?
L.H.L: We have to negotiate a major change in our phase of development, from a rapidly changing phase to slower growth. We have to negotiate a change in generations, to a new generation that is growing up with the Internet and Facebook and has access to the whole world and is seeing opportunities all over the whole world.
L.W.: Do you still enjoy your job?
L.H.L: It's never a boring job.