Prime Minister Lee Hsien Loong had a moderated dialogue with John Micklethwait, Editor-in-Chief, Bloomberg, at the Bloomberg New Economy Forum Gala Dinner on 8 November 2023.
John Micklethwait (Moderator): Prime Minister Lee, thank you for hosting us. We will try to add some humour amongst the seriousness. Normally, as you know, we begin these conversations with the cold war between China and America. But this time we have two hot wars going on – we have Hamas’ with Israel, and we have Russia’s with Ukraine. Can we begin first with Hamas and Israel — On 7th October, you spoke out loudly to condemn what Hamas did then. Since then, as the bombing of Gaza has continued, you have called for a truce or a ceasefire. You have added things about maybe there is a need to investigate possible war crimes. You have talked about the need to refresh the two-state solution. This is a slightly different position to America. I wonder if you could unpack for us how you ended up in that position?
PM Lee Hsien Loong: Well, we have to take a principled position, considering our national interests and considering also the sentiments and human reactions of our people. And the principle is that borders are inviolate, countries have the right of self-defence and killing of innocent civilians, women and children, old folks or any other civilians is against international humanitarian law.
What happened on 7th October was not just against international law, but a horrendous terrorist attack on an enormous scale. So we fully understand how the Israelis feel about it, and why they have reacted the way the way they have done. But what has happened since then in Gaza, as a consequence of Israeli operations, is an enormous human tragedy. The numbers keep on ticking up every day, as many times, as many as what happened on 7th October. Again, women, children and many innocent civilians. The destruction was and is on an enormous scale.
Everybody around the world looked at this in despair, and say surely this has to stop. Whatever the rights and wrongs, you must pay attention to the humanitarian considerations. And we have tried to express that in our statements. I think it is important that we recognise both the evil things which are done at the first attack on 7th October, and also the very tragic things which are happening in Gaza now. We have to exhort the Israelis and everybody else to abide by international norms, and to have a consideration for innocent civilians.
Mr Micklethwait: Do you think there is a long-term solution? You have always been a supporter of the two-state solution, is that still possible?
PM Lee: There is no alternative to that. It is very difficult. It looks way over the horizon. But the alternative to a two-state solution is a one-state solution. That means one side or the other has to be squeezed out. That is unimaginable. So if you cannot work towards a two-state solution, you are going to be in this cycle of mutual destruction for generations to come.
Mr Micklethwait: You worry about security in this region. I mean next-door in Malaysia you have Anwar Ibrahim; he has come up quite vocally in support of the Palestinians. I think some people worry, I see you have taken some precautions about more terrorism in this region, because of Israel and Hamas.
PM Lee: I think diplomatic positions is one thing. Some countries support Palestine. Some countries support Israel. Singapore has diplomatic relations with Israel, and we also have friendly relations with the Palestinian Authority. So diplomatic support is not the difficulty, but terrorism is a danger.
You have seen lone wolf, isolated attacks in Europe, in France, and in Belgium. There was an attack and an innocent Palestinian boy got killed in America. It can happen in this part of the world. We have had self-radicalised individuals in Singapore we have picked up – including teenagers who wanted to do terrible things, and had gone and bought bulletproof vests and knives and practised. Some of them wanted to fight in the Middle East on behalf of ISIS. Some of them wanted to emulate the Christchurch terrorists and attack Muslims in Singapore in two mosques.
And there are still terrorist groups within the region who have not disappeared. The Jemaah Islamiah who are affiliated with Al Qaeda, and whom we picked up in Singapore before they were about to do seven truck bomb attacks in Singapore. (They) still exists and they are watching. Some of their followers will surely be riled up and they may plan something. So we have to take it very seriously.
Mr Micklethwait: You are in favour of a ceasefire in Gaza. When do you think we will get one in Ukraine? Do you worry at the moment Russia is winning?
PM Lee: I think Ukraine is going to be a long fight and it is going to be a very difficult fight, because Russia is not going to declare that they have lost. Also, for Ukraine, with its resources and even all the support from Europe and from the US, to be able to keep on fighting and keep it up. You can replenish your guns, your shells, your aeroplanes and tanks, but the human deaths, the casualties, it can go on, but it cannot go on forever.
So I think Russia has already failed in its objective of overcoming Ukraine. And that is a great plus for the world, because if they had actually been able to launch a sudden, overwhelming and successful takeover and then there is a new border, then I think the world would have been much the more dangerous place. But the fact that they have failed, that they are paying a terrible cost, that is a plus. But where will it end? And for how long can Ukraine supporters keep it up? And how will the moods change in America? With this administration, I think you know where President Biden stands, but elections are due next year.
Mr Micklethwait: We will come back to that. But just one quick question on Ukraine. Do you think that is what you described as this horrific experience for Russia – do you think that has changed the thinking in China about potentially going into Taiwan?
PM Lee: I do not think the Chinese would ever have thought lightly about going into Taiwan. They must surely know. And they have soldiers and sailors and airmen who will advise them that an amphibious attack, attacking Taiwan is not like doing Iwo Jima, and Iwo Jima was bloody enough. So I am sure they must make the calculations but I do not believe that they are trigger happy. They have a problem – they would like Taiwan to be part of One China, but how to get from here to there?
And I believe if they are not provoked, if events do not spin out of control – I do not believe that you are going to wake up one day and find that they have decided to launch D-Day.
Mr Micklethwait: Are you more worried at the moment – I was struck coming to this region is that yes, there is still talk about Taiwan. But there is also talk about the Philippines a bit. In the South China Sea, you have President Marcos being quite aggressive with China. They are a treaty ally of the United States. And surely that would be very difficult.
PM Lee: That is another possible flashpoint because four ASEAN countries have claims in the South China Sea, which overlap with Chinese claims – Philippines, Brunei, Malaysia, Vietnam. All of them want to work some arrangement out between themselves in the first place and with China, mostest, because China is really the biggest claimant, and most muscular. But at the same time, all of them have got other stakes with China – China is their biggest trading partner, I think, for all of them. Therefore, the South China Sea is important, but it is not the only thing at stake. And I do not believe that any of them really truly want to push it over the brink.
Mr Micklethwait: But nobody ever does on the whole.
PM Lee: Nobody ever does on the whole, but I would say that in the case of the Southeast Asian countries, their awareness of what the Soviets used to call the “correlation of forces”. In other words, who is on your side and who is on my side, and whose battalions are bigger? I think there is a very healthy sense of realism, and therefore some restraints will be there. And even the Filipinos. The Americans are their treaty ally, but are you sure you want to get into a fight where you will be the battleground?
Mr Micklethwait: Within China, the China you are talking about seems to be one that is getting more realistic. Xi Jinping is thinking harder, that he is prepared to play a kind of more long-term role. Is that the way you look at it?
PM Lee: I think China wants to grow. China is determined to develop, and they believe I think rightly, that they will get there one way or the other, sooner or later. You can hold them back a few years. You can deny them technology. They will develop their own – it may not be as good, but they will have something, and they are determined to show their people and show the world that it can be done. Challenge is, how do they do this and feel pride in themselves? At the same time, inspiring confidence, and a certain tranquillity amongst the rest of the world. And that is very hard, because you may think you are doing nothing very unreasonable, and these are your rights and countries big and small are entitled to do the same things. But when a small country does a certain thing, others can say, “Well, that is alright. I mean, no harm done” but when a big country makes the same kind of action, you can cause reverberations everywhere without quite realising it. I think that it will take a while to get the right feel, for the Chinese to be able to grow taller and stronger and yet, keep everybody onside and on good terms.
I think they are trying, you see the Australian Prime Minister Albanese with whom they have had some difficult moments in recent years, has been in China, and that both sides want to move forward and want to have a relationship. They know that Australia is a US ally – they are buying American nuclear submarines – but they still need a relationship.
Mr Micklethwait: The interesting thing is this new mature China, which perhaps is slightly more different to how you and I began.
PM Lee: I am not sure that it is for us to judge whether they are mature or not. They are in a different phase.
Mr Micklethwait: I am a journalist, I am allowed to.
PM Lee: You are allowed to use words, but I have to use my own.
Mr Micklethwait: This new mature China, or whatever you want to call it, is now about Joe Biden is about to go and meet Xi Jinping in San Francisco. And that is the core of this relationship.
PM Lee: No, that is a necessary step in this difficult moment in the relationship. They met last year in Bali. It was a good meeting. They agreed on some principles that they would respect each other; they would cooperate, it would be win-win. But after that, in 12 months, in fact, less than that, events happened, and things went off-track, and they are trying to put it back on track again. And I think there is a lot of to-ing and fro-ing to tee it up so that the meeting can take place and be productive. But I think that this is a very deep contradiction between the two countries, and you need the meeting to head in the right direction, but you do not expect a meeting to make everything sweetness and light again. It is not possible.
Mr Micklethwait: Your foreign minister put it very well in our conference today, the weather may get better, but the climate, you think of all the conversations you and I ever had, the climate has continued to get worse and worse.
PM Lee: I think that climate is very difficult. On both sides, very entrenched views have taken root. In America, the only thing that the two parties agree on is that China is a grave threat. And in China, there is also a very strong consensus that America is out to block them, and it is difficult to coexist with America. And that you should not try, you should prepare to protect yourself against America. So, when you have these such views on both sides, even to want to think about stretching out and talking about a more constructive future is difficult.
Mr Micklethwait: Note the imponderable in that is the American election. I noticed that, as Mike said, you announced that next year you would give over to Lawrence Wong, just before the party’s 70th anniversary.
PM Lee: I did not say “just before”, I said “by the time of”.
Mr Micklethwait: As you know, that is in November, which is also curiously the date of the American election. And if we look at the polls now, a man called Donald Trump is ahead. Did you look and think, “Oh god, not him again, I will hand him over to you”?
PM Lee: That was not my principal consideration.
Mr Micklethwait: But is it an additional incentive?
PM Lee: No, the world is a difficult place. I mean, whether I hand over next year or in five years’ time, there will be things outstanding and there will be clouds on the horizon. This just happens to be the most, the one which is closest to you and most prominent.
Mr Micklethwait: But a Trump election would, in this way, it would put I think, more pressure on China to be the kind of grown-up in the room which I know you want it to be.
PM Lee: Well, Trump took actions which Biden did not reverse. For example, impose tariffs on Chinese products, and generally made the relationship much less predictable. Biden's approach is much more predictable. But on China, he has not reversed what Trump did. And I think his attitudes are also quite firm, a feeling that you do not want to clash but neither is he going to give way on things which he feels very strongly about.
And if you go back to Mr Trump, as he was the previous time, I suppose that gives you some idea of his approach to foreign policy. But it is a long game and four years is a long time in politics, but not a long time in the history of the relations between two great powers. So even if, in America, you are preoccupied with things other than the most important bilateral relationship in the world, on the other side and in the rest of the world, this should still be a major preoccupation. And hopefully there will be the perspective and equanimity and the reach to say, “My partner, is in a difficult moment, let us see how I can manage this” without giving anything away, but neither doing anything worse.
Mr Micklethwait: Sounds a bit like being the grown-up in the room, but is there now a third figure which is India?
PM Lee: I think India is growing rapidly. Last year, they were one of the fastest growing countries in the world. And Mr Modi with his economic reforms and his drive towards digitalisation is making progress; getting India to move up another level. But it is a distance because the Indian economy is one-fifth of the Chinese, their international trade is about one-fifth of the Chinese. Their population is younger, and still growing, unlike the Chinese one which is older and already stable and beginning to come down.
But they have to make the most of it and they have to extend that reach beyond the subcontinent to influence East Asia, Southeast Asia and the wider world. And I think that you can see they are starting to do that with the Quad . But I do not think that they have put quite as much resources into the wider game beyond the subcontinent.
Mr Micklethwait: They are behind China in that respect, they are not looking at a kind of global system.
PM Lee: I think also their system is not as amenable to the Chinese system; if they decide to do a Belt and Road for example. I do not think they would be able to say “Ok, I want to invest in infrastructure” and then suddenly you find ports, roads, airports, trains sprouting up all over the region — which is for the good and maybe for the bad.
Mr Micklethwait: We have talked about Singapore through your time here. You have been in the middle of the America-China one. The other one, you are the great symbol of globalisation and yet you see during all these conversations we have had – every year the world has felt more regional, and less global. I mentioned Trump — Trump has now said that if he comes in, he is going to put 10% tariffs on everything. Surely that will be the end of the global age, if it has not ended already.
PM Lee: Well, it is trending not in a favourable direction – and even without Trump – the Inflation Reduction Act, you are making industrial policy, you are deciding to do CHIPS, you are deciding to do greener technology. But basically, you are deciding that we need to make rules for ourselves and not depend on rules which are negotiated multilaterally. And if we are talking about a rules-based order, it becomes difficult to understand exactly how the rules are being made. And if everybody takes that approach, then in effect, there will not be any rules and we will all be in difficulty. I think the Europeans have made that point quite forcefully.
Mr Micklethwait: Can I ask you about something which is one of those areas where people do want rules? AI. And I looked it up — you were the first, what do you call, a Senior Wrangler? You were the first person to get top math marks at Cambridge University which Mike did not mention. I did not sadly get that at Oxford. But you were the first person to get that from Singapore. So you understand math. And I suppose the basic question to you is: Do you think AI is a bigger change than the internet?
PM Lee: Well, the first thing you must know is that there are a lot of things you do not know. And on AI, most of us do not know where it is going. I do not think even the researchers know where it is going. And I do not pretend to understand how the technology works. I have a vague idea of the principles, but I do not understand how they have made all these magical consequences happen. And I do not know how far the present approach can go. It took 50, 70 years from the time the idea of AI came about, and people started inventing computer languages like LISP to be used for AI programming, to ChatGPT. 1950s until now, it is an enormous, long duration. And all along that path, the thought was we are about to make a breakthrough, which eventually did come. Now you think you are on the run, but will it go all the way to the point where you can have a conversation and either the chatbot can interview me or I may interview the chatbot.
Mr Micklethwait: Or I could interview the chatbot.
PM Lee: Or two chatbots may be talking to each other better than us. We do not know — it could go there just by putting in 10 times more chips and 10 times more computing. It could be you reach a limit, and then you need another breakthrough conceptually to take it to the next level where it has got insight, understanding, judgment, reasoning and empathy. But I think in principle, there is no reason why you cannot build a machine which can think, act, speak, maybe possibly look like it is feeling like a human being. Some philosophers think it is not possible; I do not believe that. I think it is possible, but I do not know how long it will take. I do know that when it does happen, we will have very profound questions to answer, and it will be very difficult to answer, because if it is as smart as you, you will not be able to pre-program it to be stupid enough to be killed. That is a fundamental contradiction — I mean, you think that you can make a special push button somewhere and press it and it will suddenly say yes and obey you. But if it is really that smart, you will have not thought of all of the consequences.
Mr Micklethwait: But in that sort of technological balance of power, do you sense that America is a long way ahead of China?
PM Lee: I think right now they are ahead, both, because of the tech they make, the chips; also because they attract so much of human talent, and even Asian, Chinese, Indian researchers, they are in America making breakthroughs. And also because of their free enterprise system. I mean, Silicon Valley, you may have your views about the tech companies, but they are able to take an idea and use it to transform the world, for better or for worse. And now, here we have something which is happening, already making an impact on the world, not to become a super cyborg, but just to be your AI assistant to help you draft a paragraph or to write a short note.
And we need to gain experience operating with it and understand what the pitfalls are so that we can make smart decisions to regulate it as we go along. Right now, I can safely say that in the government, in my government, and I think in most governments, the tech people know more about this than the government people. It is inherent in the way the breakthroughs are happening. We are not the ones making the breakthroughs. The people who are doing that are in the universities and the companies, and they know much more about it than us. Some of them are worried and I think there is reason for us to pay attention.
Mr Micklethwait: Can I ask you quickly about Singapore, and then about yourself, and then end on Singapore. It has been a slightly tougher year than normal in Singapore — you had this money-laundering thing with some Chinese business people, you even had one or two officials in the government, not being pulled into that, but being probed and so on, which I know compared with certain Southern European countries would not really worry…
PM Lee: No, we do not compare ourselves with certain Southern European countries. Not even with any Northern European countries. We just want to maintain high standards. And when the standards fall short, we have to deal with it. And once in a while, you will find that one of your own did not quite live up to what he should have done or appears to have done something not quite right. And well, we have to do the right thing and we will have to be seen that the right thing is done, which is currently underway. I do not think the Chinese money-laundering cases is in any way a scandal for us. It is a criminal case. Criminals do bad things. We find out, we investigate it, we do what we need to do, we seize the money, the cars, the handbags, and everything else. And we charge them in court and they have to prove that these are things which they legitimately own, they did not do anything wrong. But as far as my system is concerned, the system is clean. The system did what it was supposed to do, and it will keep itself clean. If my system had been corrupted…
Mr Micklethwait: Then you will be in trouble.
PM Lee: Then I will be in trouble.
Mr Micklethwait: Then you would be back in the European levels.
PM Lee: I do not know what levels the Europeans are at.
Mr Micklethwait: Can I ask you, as you pointed out, Mike pointed out, you are next year, sometime before the PAP 70th Anniversary, you are going to hand over to Lawrence Wong. So, you will have done 20 years by then. And I wonder how much you think, what has changed during that? I mean, if you look at your father, your father came in famously as a socialist and ended up as a Thatcherite. I had been wandering around Singapore at the moment, and there are all these big programmes to hand out more money to people in retirement, fight off inflation. Have you been drifting to the left?
PM Lee: We have been sailing carefully to a more comfortable place. When the economy is growing and all boats are lifted by the tide, we can afford to be and we need to be, very rigorous in how we help those who are not quite catching up. You can tell them run faster, work harder, here is a bit more incentive, get ahead. And mostly it works very well. And we did that for a very long time. But over time as the race goes on, and as the field spreads out, and some are further forward and some are not quite so far ahead, and then their kids are not so far ahead, you have to think how are you going to hold this team together? And when sometimes, somebody who is doing perfectly well, their world changes on him and suddenly the first shall be last. Well, what do you do? Do you say, that is just the way the world is? Or is there something I can do to help him get back into the race again and be contributing again? And I think that we are in a phase where we have to do more together, where we have to help each other, and the government has to be there. And we have to try very hard to avoid the government being this sole solution to all problems.
Mr Micklethwait: So, the government is not going to get massively bigger, but it will get a bit bigger.
PM Lee: We are probably the smallest government in the developed countries because we spend about less than 20% of the GDP that is the government budget. My government budget is about the same percentage of the GDP as some European countries spend on state pensions. I mean, your system is different, but we have kept ours very lean. And we need to keep it very lean, but the pressures of ageing, of higher healthcare costs, of higher social needs are pushing us up gradually. And our challenge is, how do we fund that? And how do we allow that to happen where necessary, without just blowing up out of control? And that means from time to time, uttering the forbidden word – taxes. And we are in the middle of doing that now. We have a Goods and Services Tax, like a VAT. It was 7%. We pushed it up to 8% on the first of January this year, and it is about to go up to 9% on the first of January next year. And we will make it happen. But what we are doing is to provide quite generous, practically cash subsidies to the lower two-thirds of the population, so that I can get the system through. I am in a new place in terms of my revenues. But as far as impact on the households, that is deferred for quite some time.
Mr Micklethwait: How would you like to be remembered? What is the bit out of that? Do you want to be seen as the person who kept Singapore…
PM Lee: No, I think I will just focus on doing my job. I am not into…
Mr Micklethwait: Eulogies?
PM Lee: No, I am not into the point where I sit down and talk about what I used to do.
Mr Micklethwait: Well, that brings me to my last question. There is talk of you becoming Senior Minister. When I first met you many years ago, you had just taken over as Prime Minister. And then I went to go and see your father, who supposedly had semi-retired, to be Senior Minister. And I discovered to my slight surprise, he was living above your Cabinet room, which struck me as being…
PM Lee: No, he was not living there, he was working there.
Mr Micklethwait: So, he was working there. If I was running a Cabinet meeting, and he was up there… I mean, are you going to be planning to that degree?
PM Lee: It did not happen. I was running the Cabinet meeting and he was in the Cabinet Room.
Mr Micklethwait: But he was still somewhat there.
PM Lee: It worked quite well. My predecessor was in the Cabinet Room too. So, I had two of my predecessors in the meeting. And one of my fellow Prime Ministers said to me, ‘I cannot imagine what your Cabinet meetings are like’.
Mr Micklethwait: Does this work?
PM Lee: But they worked. It worked. It is a very delicate thing to be overwatching but not overbearing, and to be able to give advice and a helpful nudge, and just the right, wise word, and not cramp the style of your successor. I am at the disposal of my successor. I have already said whatever he wants me to do, I will do to help him succeed. So, you have to ask him what he will be doing with me.
Mr Micklethwait: Well Prime Minister Lee, I hope we will see you next year as well.
PM Lee: No, I shall be in the audience listening to you.
Mr Micklethwait: Listening from up above. Thank you.
PM Lee: Thank you very much.
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