This is a partial transcript of Prime Minister Lee Hsien Loong’s interview with Charlie Rose.
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CHARLIE ROSE: Tell me what your philosophy is for the relevance and the future of Singapore.
LEE HSIEN LOONG: If we want to make a living for ourselves, we’ve got to be extraordinary. There are any number of cities with a million, two million people in them, hundreds in Asia, hundreds more worldwide. Why is Singapore different? It’s because the people make it so, and the people, meaning our own people and the talent we have within Singapore and the talent we can attract to Singapore and make members of our extended family who can help us to prosper and help us to make —
CHARLIE ROSE: What do you consider members of the extended family?
LEE HSIEN LOONG: People who come to Singapore and work, people who come to Singapore and strike roots, people who come and eventually become citizens.
CHARLIE ROSE: Is Singapore’s future as bright or brighter today than it was five years ago?
LEE HSIEN LOONG: I would say so. I would say so. Over the last five years we’ve weathered SARS — well, it was a bit longer than five years. We’ve weathered the financial — global financial crisis. We’ve come
through, bounced back. We’ve just had our first quarter growth.
CHARLIE ROSE: It was nine percent —
LEE HSIEN LOONG: It was 13 percent over last year.
CHARLIE ROSE: And so for 2010 what do you expect?
LEE HSIEN LOONG: For 2010 we’re expecting seven percent to nine percent. So we are on a good platform not to cruise ahead but to build for the future. And this is a platform on which we can say now we’ve got the growth, let’s get the transformation moving.
CHARLIE ROSE: How did this happen?
LEE HSIEN LOONG: I think firstly we were lucky. The world picked up better than we expected. I think the American team, Paulson and Bernanke and Geithner did a good job, and we are beneficiaries.
Secondly, we had programs which we had launch which had are coming on stream now, like that casinos and integrated resort, which is you mentioned. And they are creating 20,000, 30,000 jobs for us. And it’s coming at a time just when the economy is picking up and generating a tremendous amount of buzz and a tremendous number of tourists and visitors are paying attention to Singapore and writing about Singapore.
Thirdly, I think we were lucky we did the right thing in the town turn has year.
CHARLIE ROSE: Which was?
LEE HSIEN LOONG: We decided to focus on saving jobs and keeping companies viable. So the government, we had resources, so the government helped to bear the Social Security expenses for workers. Companies worked with unions to keep workers employed and therefore they were — firstly we kept social cohesion, and secondly when the moment came to pick up, they were ready to pick up and to increase production and go again. And so they are year we are booming again.
CHARLIE ROSE: So if you look back even further to what might be called the “Singapore miracle” or the “Singapore way,” what was the essence of that?
LEE HSIEN LOONG: Being put in a position where you have no choice but to do well. And then you get together and work at it. We had no oil and no gas.
CHARLIE ROSE: No natural resources to sell.
LEE HSIEN LOONG: No immigration. So we had to make a living for ourselves.
CHARLIE ROSE: So what did you do?
LEE HSIEN LOONG: What did we do? We invested in education. We invested in public housing so that people would have a home to own and to defend. We built up our armed forces so we could be secure in an uncertain world.
We built up our institutions so that you have a government which people can trust and is competent and can protect our interests in the international community. And the people supported the government and worked with the government. And that reservoir of trust is one of our most valuable and sustainable competitive advantages.
CHARLIE ROSE: The reservoir of trust?
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: Your father said to me you have to stay relevant. You have to stay relevant to the world.
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: There are people today when they talk about the Middle East specifically they’ll say this place could become the Singapore of the Middle East, meaning that if they concentrated, even if they don’t have oil resources — they say this about the Palestinians, the Palestinians because of the human resources talent there.
LEE HSIEN LOONG: Well, we’re happy to be a metaphor, but we remind ourselves that we have no safety net and we can always fail if we get it wrong.
CHARLIE ROSE: And what would “get it wrong” be?
LEE HSIEN LOONG: If you don’t have the right government, if you have the wrong policies, if you cause a loss of confidence. Supposing we were in the situation of Iceland, of Greece —
CHARLIE ROSE: Yes, I wanted to talk to you about that.
LEE HSIEN LOONG: Where would we be? Iceland is a friend of the EU, Greece is in the EU, so the Germans come riding to the rescue in some way. But in Singapore, how are you ever come back?
CHARLIE ROSE: And who would come to the rescue of Singapore if you had a huge debt problem?
LEE HSIEN LOONG: Exactly. We’d be just another broken-back country permanently.
CHARLIE ROSE: So you can’t afford to be — have that kind of financial crisis because you’re not sure —
LEE HSIEN LOONG: We can’t afford to have —
CHARLIE ROSE: The IMF is not going to be there for you.
LEE HSIEN LOONG: We can’t afford to have a disastrous bump in the night, whether it’s a financial crisis, whether it’s government misbehavior, whether it’s a security problem. But we only have one chance to make a go of it. You can fail — you can succeed in many battles. You fail once, it’s finished.
CHARLIE ROSE: It was not that long ago we had an Asian economic crisis.
LEE HSIEN LOONG: Ten years.
CHARLIE ROSE: Ten years ago, right. There was also a Mexican crisis.
We see the debt crisis in Greece.
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: When you look at all the sovereign debt around the world, your father said to me the thing he worries most about is America’s debt.
LEE HSIEN LOONG: Yes. We all depend on America. You are the anchor for the whole system. You are the way people AAA. I mean, if Triple-A is defaultable, what happens –
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CHARLIE ROSE: You also have a sovereign wealth fund.
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: It’s worth —
LEE HSIEN LOONG: Well, it’s not really a sovereign wealth fund. They have companies.
CHARLIE ROSE: I don’t understand the model. What is it then?
LEE HSIEN LOONG: You’re asking about Temasek?
CHARLIE ROSE: Yes.
LEE HSIEN LOONG: Temasek owns a stable of companies.
CHARLIE ROSE: Sovereign wealth funds own a stable of companies.
LEE HSIEN LOONG: Sovereign wealth funds own a portfolio of financial assets.
CHARLIE ROSE: But sometimes they go out and buy entire companies.
LEE HSIEN LOONG: Sometimes.
CHARLIE ROSE: But go ahead. You are different in what way?
LEE HSIEN LOONG: Well, first of all, Temasek operates completely on a commercial basis. We appoint their board, but their boards makes all the decisions, and the boards do not decide for the boards of subsidiary and associate companies, because each of the companies, many of which are listed, have their own boards, and each one is accountable to all of their shareholders.
CHARLIE ROSE: So it’s more like a kind of giant sovereign private equity firm except that it’s owned by the government?
LEE HSIEN LOONG: Except that Temasek is owned by the government, yes.
CHARLIE ROSE: Do you have less confidence in American financial —
LEE HSIEN LOONG: Not at all. I mean, you’re asking me where I’m going to put my — portfolio.
(LAUGHTER)
These are decisions I leave to the portfolio managers. I’m not a portfolio manager.
CHARLIE ROSE: I know you’re not, but you’re the prime minister, and it’s owned by the government. And you have a responsibility to the people of Singapore to make sure that they do well.
LEE HSIEN LOONG: My responsibility is to make sure that I appoint the right — that we have the right people managing the portfolio, that they make the right long-term decisions taking into account the risks. It will maximize our returns over the long term, not every year, but on the whole portfolio basis. And my job is to provide them the political environment in which they can do their job without being by the political structure.
CHARLIE ROSE: Have you changed your philosophy about that since the economic crisis?
LEE HSIEN LOONG: We review our strategic asset allocation from time to time. We make incremental adjustments. But we are long-term players
and we don’t make major switches overnight.
CHARLIE ROSE: How do you measure your commitment to democracy?
LEE HSIEN LOONG: I think we measure it by the legitimacy of the government and by the results, how Singapore works and whether Singaporeans are able to have a better life.
CHARLIE ROSE: Is it Jeffersonian democracy?
LEE HSIEN LOONG: I don’t — we don’t measure ourselves by an American model to how — to what extent we approximate you. The countries which approximate you most closely in Asia, probably the Philippines, operates very differently from American democracy.
So we’re not trying to approximate you. We are trying to find a formula which works for Singapore.
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CHARLIE ROSE: You have a demographic problem, too.
LEE HSIEN LOONG: I have one coming. That’s one of the reasons why we emphasize babies as well as immigration.
(LAUGHTER)
CHARLIE ROSE: How do you do that?
LEE HSIEN LOONG: How do I do what?
CHARLIE ROSE: Emphasize babies as well as immigration. You say you can come to our country if you have a brood of kids?
LEE HSIEN LOONG: No. We have incentives for Singaporeans to have babies.
CHARLIE ROSE: What’s an incentive to have a baby? If they have babies, you give them tax advantages?
LEE HSIEN LOONG: No, there is a cash bonus.
CHARLIE ROSE: Oh. So if you’re is a Singapore citizen —
LEE HSIEN LOONG: There’s a cash bonus.
CHARLIE ROSE: Explain it to us.
LEE HSIEN LOONG: I can’t remember the numbers now, but the first second and third and fourth child you have $5,000 or $10,000 or $15,000. And if you co-pay into a savings account the government will match that for the child up to a certain amount.
Because the more well off people are, the more they feel the opportunity cost of having a child is exorbitant, which is true, because if I’m a lawyer it’s very expensive to stay home and have a baby.
So here’s a small gesture to help you defray your child care, your tuition, your kindergarten, your school expenses. And it’s just a gesture to show that we recognize you’re carrying a burden and you’re helping us to generate the next generation.
CHARLIE ROSE: Your father is enormously respected around the globe. You know that, and you are his son. Your wife is important in Singapore as a businessperson, correct?
LEE HSIEN LOONG: She’s — I’m not sure I’d call her a businessperson. I think she’s an employee.
(LAUGHTER)
CHARLIE ROSE: She’s a businessperson. She’s known around the world as a businessperson, correct?
LEE HSIEN LOONG: She’s an employee. You can call her what you want.
CHARLIE ROSE: All right, well, you seem to be sensitive — you were –-to the issue of what’s called nepotism.
LEE HSIEN LOONG: We are very sensitive.
CHARLIE ROSE: Tell me about the sensitivity.
LEE HSIEN LOONG: The whole of our system is founded on a basic concept of meritocracy. You are where you are because you are the best man for the job and not because of your connections or your parents or your relatives.
And if anybody doubts that I as prime minister is here not because I am the best man for the job but because my father fixed it or my wife runs Temasek because I put her there and not because she’s the best woman for
the job, then my entire credibility and moral authority is destroyed. I’m not fit to be where I am.
And it’s a fundamental issue of fitness to govern. First you must have the moral right, then you can make the right decisions. It’s a basic Confusion precept.
CHARLIE ROSE: Only when you have to moral right can you make —
LEE HSIEN LOONG: Then can you govern and make the country right.
And in Singapore people expect that. So if there’s any doubt that this is so, and people believe that I’m there because my father fixed it or the whole system is just make-believe, then the system will come down.
It’s not tenable.
If it’s true, it better be proven and I better be kicked out. If it’s not true, it better also be proven to be not true and the matter put to rest.
CHARLIE ROSE: So if some journalist writes about nepotism and you think it’s not true —
LEE HSIEN LOONG: Well, then we sue him!
(LAUGHTER)
CHARLIE ROSE: Yes, you do.
LEE HSIEN LOONG: As we did recently.
CHARLIE ROSE: And won. You sued the “International Herald Tribune.”
LEE HSIEN LOONG: We raised the message with the “Herald Tribune,” and they paid damages and apologized. They didn’t go to court. They could have gone to court.
CHARLIE ROSE: I would consider that wining if they paid damages and apologized.
LEE HSIEN LOONG: All right.
CHARLIE ROSE: But you thought what was written in the “International Herald Tribune” would somehow attack the moral fiber of your trust —
LEE HSIEN LOONG: Yes, of course.
CHARLIE ROSE: — with the people you govern because —
LEE HSIEN LOONG: Yes, of course. They put us on the same list as Kim Jong-il.
CHARLIE ROSE: Because he inherited his power from his father.
LEE HSIEN LOONG: Yes, indeed, and in a similar way.
CHARLIE ROSE: And you’re saying we will not stand for that because it goes to the essence of our moral authority to govern.
LEE HSIEN LOONG: Yes. In this case the same journalist and same newspaper had made the same allegation and apologized and paid damages and promised never to do it again. And they did it again.
CHARLIE ROSE: So they promised one time and then did it again, and so you went back?
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: Also, are you anxious to send a signal that you don’t dare write about nepotism in Singapore because Singaporeans will sue you?
LEE HSIEN LOONG: No. The signal we want to send is if you want to make an allegation, make sure it’s true and be prepared to prove it
We were prepared when we sued them to go into court, give evidence, enter the witness box, and be cross-examined under oath. And they can bring the lawyer and demolish us and prove that what they said is true.
What more can you ask?
CHARLIE ROSE: Has anybody else written anything?
LEE HSIEN LOONG: From time to time, including Bloomberg. They apologized.
CHARLIE ROSE: Bloomberg apologized?
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: What did they say?
LEE HSIEN LOONG: Something similar.
CHARLIE ROSE: About nepotism?
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: And so you went to them and they apologized and said,
“We’re sorry. We were wrong.”
LEE HSIEN LOONG: Yes.
CHARLIE ROSE: Finally, what’s the legacy of your dad, somebody I admire, as you know, from many conversations he and I have had together.
LEE HSIEN LOONG: Well, he made a state where there was none, a country, a nation which will become a nation which nobody believed could succeed. And he’s made a system which went on without him and which will endure beyond him.
CHARLIE ROSE: But he remains as the senior mentor.
LEE HSIEN LOONG: He calls himself a mascot.
(LAUGHTER)
And he doesn’t have time to worry about all these issues anymore.
CHARLIE ROSE: And what’s the most important lesson he taught you?
LEE HSIEN LOONG: Never say die. However desperate the situation, if you think hard enough you’ll find a resource and you’ll find the way out of it.
CHARLIE ROSE: “Never say die.” Never give up.
LEE HSIEN LOONG: Yes.
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Read Prime Minister Lee Hsien Loong’s interview with Charlie Rose at “What’s on Charlie Rose“.
