Dialogue by PM Lee Hsien Loong at the Atlantic Council Front Page Online Event

Mr David M. Rubenstein (Moderator): Mr Prime Minister, let me first congratulate you on your election. You had an election last week, and you won 83 of the 93 seats. In our country, that would be considered a landslide. Were you happy with the results?

PM Lee Hsien Loong: We were satisfied with the results. We had hoped for a higher popular vote, but in the circumstances, we think it is a clear mandate. We will make the most of it and serve Singapore as best we can in the next five years. 

Moderator: So you think you were aided by the fact you were going to do this interview. This interview made you more popular in Singapore than otherwise. The fact that you were going to do this interview. Is that what you think helped you? 

PM Lee: I would like to think so.

Moderator: Right now, as Fred mentioned, you are in your 16th year as Prime Minister, your father served for 31 years. I assumed you are not going to try to beat that record right?

PM Lee: No, that is not my ambition.

Moderator: Have you decided to how long you would like to stay as Prime Minister? Before the election, you have said that you might step down at some point before another election. Is your current position that you might stay for the entire term or you have not decided yet?

PM Lee: I have not decided. I had hoped to be able to hand over by the time I was 70 years old, which is February 2022. But COVID-19 has taken us all by surprise. I think I have to see this through and hand over Singapore, in good shape into good hands.

Moderator: Well, let us talk about COVID-19. As Fred mentioned, Singapore initially was considered to be a marvel, because you had virtually no COVID-19 cases. Then in recent months, there have been more COVID-19 cases from your foreign workers. Is that fair? How do you have it under control now?

PM Lee: It is under control now. We had it under control for some time, then we had an outbreak in our migrant worker dormitories, which are communal living. It is like being on an aircraft carrier or cruise ship or in a nursing home, and it spreads very fast. So suddenly, we had a very big problem in our hands. 

We have managed to bring that under control systematically. We have been clearing the dorms one by one. The task is almost complete. We should be done with it within a couple of weeks. Of course, then comes the challenge of keeping the people safe and clean, and allowing them to go back to work without once again starting in a cycle of infection. That is a big challenge which is occupying us now. 

On the rest of our community, the numbers are down. Fortunately for us, also the mortality rates have been very low. We have had 27 deaths out of altogether 50,000 cases in Singapore thereabouts.

Moderator: So today are you reopening your economy? Did you shut your economy down a bit for a while and have people work remotely at home?

PM Lee: Yes, we did. We were shut down for two months. We called it a circuit breaker. People worked from home. Many businesses had to close, especially those which cannot work from home like entertainment places. We have been opening up since the beginning of June. So far so good. Cases have remained low. We are not completely open yet. But we are progressively getting there. 

The manufacturing is practically normal. Construction is more complicated because their workers were in the dorms and were the sick ones. Then we have the tourists and travel-related sectors – Singapore Airlines, hotels, some of the entertainment outlets, those I think are going to be affected for quite some time yet.

Moderator: How did you manage the government when the country was in shut down? Were you working remotely yourself and from your home. How did your ministers work in terms of running the government at that time?

PM Lee: We sometimes go into the office, but we had safe distancing measures. For example, when the Cabinet meets, we do not all meet in the same room. We have divided into Team A and Team B, and half of us are in one room and half of us are in another room. It happens all the way down in the rest of the government. In many of the private companies as well. We have to take these precautions seriously because you never know when you are going to be exposed to it. And I do not want my whole Cabinet to be quarantine at the same time.

Moderator: Is wearing a mask a political kind of thing in Singapore? Does everybody wear a mask, and there is no real controversy about wearing masks there?

PM Lee: Yes, we have made it a requirement. At first, we discouraged people because the science did not suggest that it was necessary, and we thought that this would alarm people. But as science became clearer, we had to change our position. Now it is a requirement to wear masks when you go outdoors, and everybody does so. In fact, if you do not, somebody will tell you that.

Moderator: You also have a fairly unique contact tracing system. You might describe how that works and whether you think it has been as successful as you would like.

PM Lee: Most of the contact tracing is not extraordinary. It is what everybody else does. You interview a person, you find out where he has been, you go and trace those places and then follow the chain like a detective. We have also developed an app which we encouraged people to load onto their phones. It will track other people who have the app, who have been close to you for some period, through Bluetooth. If you get sick, then we ask you to give us the information from within your app. We hope to use that to find some of the contacts which you might otherwise not have been aware of or might have forgotten.

It is not easy to get to work, but we found that it is of some help. Every time we have a sick person, you get one to two contacts via the app this way. We are developing a little pod, which will be more convenient to carry around because the app on the phone drains the battery and people object.

Moderator: Singapore is a country that many people may not actually have visited who are watching today or listening. I started going there in 1970. I have gone at least once every year since then. I am reasonably familiar with Singapore. For those who are not, can you tell us when the country officially became an independent country, your population and your ethnicity makeup?

PM Lee: We became independent in 1965. Before that, we declared ourselves independent but we joined the Federation of Malaya which is Malaysia today. Within two years, we found that it did not work and we were sent out into the wild on our own to fend for ourselves. That was 1965, 55 years ago. Since then, we have thrived. 

We now have 5.7 million people thereabouts altogether, of which citizens are about three and a half million. About 70 per cent are Chinese, about 15 per cent are Malays. We have about 9 per cent Indians, and a small proportion of other minorities amongst the citizen population.

Moderator: So Singapore has been considered for generations an economic miracle. A very small country relatively speaking, but relatively prosperous. What is the secret to Singapore's success, financially and economically, in your view?

PM Lee: I think hard work and paranoia. We have no resources. We know we have to work hard, and we are small, we can see the world at our doorstep and all the threats in the wide and dangerous world around us. So we put our minds to it and we have been able to work together. Fortunately with good leadership and with a united people, we have made steady progress. We have kept on going in the same direction for a long time.

Moderator: Now if somebody is listening to you and they say well, Singapore sounds like a place I should visit, I have not been there. Can somebody come to Singapore now, or because of COVID-19, it is really difficult to go visit Singapore now?

PM Lee: It is a little bit harder now, but in normal times it is very easy and we are trying our best to get the lines opened up again in a safe way, so that you can come and visit us once again, and see what Singapore really is like.

Moderator: So one of the issues that your father and you dealt with is trying to keep a balance between China and the United States – which is a very complicated thing because you are not trying to align yourself with either China or the United States, but be friendly with both. What is your current take on the US-China relationship? You think it has devolved into an unfortunate situation, or are you optimistic it can turn around?

PM Lee: I think it is a very unfortunate situation. Actions have been taken which have provoked counter actions. The issues have metastasised and spread into all fields of the relationship. It is normal between two powers that you will have areas where you have contradictions and areas where you can work together. But I think the way things have developed over the last several years, you have very many areas where there is not only contradiction, but also deep distrust and this is corrosive and it is making a very difficult relationship very dangerous. Because if it goes wrong, it is not just any bilateral relationship, it is the most important bilateral relationship in the world, between a very powerful United States of America, and between a country with one quarter of humanity. I do not think that is a collision which should be lightly ventured on either side.

Moderator: Are you worried that the United States might pull out of being an Asian power and then not be as present there as it has been historically, or is that not a concern of yours?

PM Lee: Well, we worry about two things. One that you may collide with the Chinese. Two, that you may decide that you have no stake in the region, and leave us to our own defences. In Asia, we all have good relations with China, and we all want good relations with China, but we also all have very deep relations with the United States and want to keep them at the same time. We want to maintain that balance. For the US to be able to play that role and tend to your many interests, friends, and investments in the region – I think that requires a significant amount of attention from the United States policy establishment. From the State Department and from the White House too. Because otherwise, a part of the world which has been crucial to you since the Second World War, I think may become a problem rather than an asset to you.

Moderator: Now, in the United States we are in a political campaign. Your political campaign was only, I think, nine days. How do you have a campaign that is only nine days?

PM Lee: Well we are just one city, smaller than New York.

Moderator: So only nine days and is there a limit to how much one can spend in a campaign?

PM Lee: Yes, there is a limit. You are allowed to spend about 5 dollars a voter or thereabouts, and mostly we spend less. We do not encourage political advertisements, we provide free airtime on television, and it is cheap to reach out to voters because we are a compact place.

Moderator: One thing that has always been unique about Singapore is it pays its government officials a kind of private sector compensation. In other words, United States we pay very low salaries for government officials. What is the system that you have, and are you convinced it is the best system to use for Singapore?

PM Lee: I think it works for us. It is not uncontroversial, but we believe that it is best that we pay the person, according to what he is worth, and according to what he is contributing. Because if you do not do that, either you will compromise on the quality of your civil service, or people will find ways to make up and compensate and camouflage forms of compensation, or you will have a revolving door and then you have something when you go out after you retire. I think those lead to other kinds of big problems. So we believe it is better for us to be open about this and to be honest about this very difficult problem, but make sure that our public officers are paid competitively. Not leading the private sector but competitively. If you enter the political leadership, then you are paid a clear discount, a significant discount compared to the private sector, but not such a huge discount that it becomes unwearable.

Moderator: So your neighbour Malaysia has had some corruption issues recently. It has been the newspapers today because of a conviction, I guess yesterday. There has been no corruption of any type in government officials in Singapore. Is that because you pay your officials a very high compensation relative to what they do elsewhere?

PM Lee: It is not the only factor, but it is one of the factors which makes it easier for us to deal with this problem. But we still have this problem, and from time to time we come across officials at many levels, some quite high ones occasionally, who have succumbed to temptation and we have to act against them zealously. 

Even if it is embarrassing or awkward for us, we have to do it, because if we did not do it, then that is the end of the system and you will not be able to maintain the integrity and the reputation which we have built up over so many years.

Moderator: So back to the US elections and so forth. Do people in Asia and Singapore have any particular party they want to have win the US elections, or you stay very neutral in this?

PM Lee: We have no vote, but we live with the outcome.

Moderator: Today, would you expect that after the election, the US-China relationship might get better than it is today?

PM Lee: We hope so. Historically, in presidential election years, the US-China relationship always gets entangled in the presidential campaign. After that, after some time when the new administration settles in, you begin to understand what the world is really like and things settle down. I am not sure whether it will happen this time because the feel is quite different and the degree of animus, and sad to say that bipartisan consensus on treating China as a threat is quite extraordinary. I fear that it may carry on past the election, and if it does, I think that bodes ill for the world.

Moderator: Now, in the United States, people are to some extent blaming China for COVID-19, rightly or wrongly. Is that the same phenomenon in Asia? Do people blame China for COVID-19? Or basically they do not blame China for that?

PM Lee: I do not think it is on top of on top of people's minds. If you ask me, I am sure they would say, well, there must have been missteps. After all, (if) you look at the Chinese, they removed the party secretary from Wuhan and the party secretary from Hubei province. So, they must have done so for a reason, even though they have not quite said what the missteps were which merited these disciplinary actions. Frankly, no government has dealt with this completely perfectly because it has been such a rapidly moving situation, and such an unknown and new disease. We are discovering things as we go along, and you learn by doing. That is what has happened to all of us. Some with better results, some for the time being with not so good results, but the battle is not over, and the jury is still out.

Moderator: In the United States, the new law in China that deals with Hong Kong is somewhat controversial. Obviously we have imposed some sanctions and other things, and the Secretary of State has been outspoken about it. What is the general reaction in Singapore and in Asia to what is happening in Hong Kong now?

PM Lee: We watch what is happening in Hong Kong with concern. In fact, we have been watching it with concern for some time because Hong Kong has had a difficult time over the last several years. It is a deeply divided society. It has had demonstrations, which are bitter and protracted and increasingly with a violent tinge to them. It has an obligation to pass a national security law, that means Hong Kong is supposed to pass a national security law under the Basic Law, which is their constitution, which they have not been able to do. Looking at the way things were trending over the last few years, it was quite clear that this could not continue indefinitely and certainly could not last for the rest of the now 27 more years of ‘One Country, Two Systems’. So, the Chinese have now decided, “if you are not going to pass a national security law, we the National People's Congress in Beijing will pass it on your behalf”, and they have said that it complies with ‘One Country, Two Systems’.

In Hong Kong, the reaction has been split. Some people supported – the administration supported, (but) a significant part of the population had different views. But it is done, and the Chinese have said, “well, you should not worry, this will only affect a very small number of people and most people should find life carrying on as usual.” As time passes, if that proves to be the case, then Hong Kong will settle into a new normal. We hope so. But at the same time, this move has triggered counter responses, most notably amongst Americans in America and also in Britain because Britain was the party to the Joint Declaration. I am sure the Chinese must have calculated that and decided that they had to do this regardless. It is most unfortunate because already there is enough menu of complications between the US and China's bilateral relationship and this only makes things worse. From Singapore's point of view, we hope that somehow either Hong Kong will work through its problems. We think it is better for Hong Kong, and better for the region and Singapore, if Hong Kong is stable, calm, and prosperous, and able to play the role, which it used to play – helping China to grow and prosper as well.

Moderator: There has been for the last two decades or so some competition between Hong Kong and Singapore as a place for foreign companies to relocate their businesses or to invest. You expect that what is happening in Hong Kong now will benefit Singapore? Or it is too early to know?

PM Lee: There may be some movement of businesses out of Hong Kong, but I have never treated this as a very serious rivalry. I mean, a certain amount of friendly competition – yes. But the Asia Pacific is a big place and there are many opportunities. Hong Kong has its advantages being on the doorstep of China, Singapore has a different set of advantages being in the middle of Southeast Asia and with a broader footprint. So, on balance, I would say I would much prefer Hong Kong doing well, then to have people looking for places to go out of Hong Kong.

Moderator: In your 16 years as Prime Minister, you have met many Chinese leaders, Presidents of China. How do you compare the current President of China with others that you have met? In terms of his abilities, in terms of his desires, how would you assess him compared to his predecessors? Much different or the same?

PM Lee: I do not think we make a custom of assessing one another in public. But I think if you have met President Xi, you will know that he is a person who knows his mind and engages you, and I think has a clear idea of what he wants China to be, and is very determined to make it happen. It is a very huge country. It is not simple to govern. I am sure that he is more preoccupied with his domestic challenges than with the international aspect – important as the international aspects are.

Moderator: Now in your economy, you were trying to digitally transform the Singapore economy, to make it much more of a digital economy than historically maybe it has been or anybody has been. How is that going and what are your goals?

PM Lee: We are making progress. I think with COVID-19 and the lockdown, maybe it has gone faster because people have gotten used to working from home with tele-conferencing, e-shopping and e-payments. Basically, we have got a lot of hardware – on average, one and half or two handphones per adult person in Singapore. We are wired up for the internet. All the homes have fibre, Wi-Fi is pervasive and fast, but we have not quite brought all the pieces together so that the systems work together and in a way which deliver macro-efficiency improvements and results. It is so in the government, I think it is so in the private sector too. We are trying to derive some of these benefits by bringing the pieces together by making enablers. 

For example, by having a national digital identification system so that you can use that and unlock all kinds of services, or having a national payments infrastructure – e-payments infrastructure – so that people can build apps on top of that, and you can have a proliferation of different apps but the same infrastructure which is shared by everybody, and which is efficient and economical to use. 

We are building these progressively. We also have to get the legal infrastructure right – the safeguards of privacy for use of data, so that people have the confidence to put their data onto the internet and in a safe way. These are things which we are working on progressively. I think it will take some time yet, but if any city is able to do that, I think we have a good chance because we have one level of government, our population is reasonably tech-savvy, and we have already had a long track record of marching in this direction.

Moderator: COVID-19 has put Singapore in many countries in the world into a bit of a recession. Are you emerging from the recession this year and how do you expect your economic growth to be for the year?

PM Lee: We had a very bad second quarter because of our circuit breaker with a lockdown so it was minus 12, 13 per cent year-on-year¹, compared to a year ago. It will rebound after the circuit breaker ended, but as a whole, I am quite sure we will end up negative – I am not sure, minus three, four per cent, maybe more. But the key thing is not the number. The key thing is which parts of the economy can you preserve and operate normally, and which parts have to be triaged and transitioned into new activities or business models, and which parts will take some time to come back and you have got to keep them sort of in suspended animation until things come back to normal. Things like travel and transportation, unfortunately for the time being, are in suspended animation. We have to try our best to keep those capabilities intact, so that when things come back to normal again, once again, SIA will be flying; and once again, we will be the best airline in the world.

Moderator: If the next President of the United States – whoever it might be, President Trump, re-elected, or Vice President Biden – called you up the day after the election and said, I need some advice about how to enhance our relationships in Asia, what would be one or two things you would tell the next President to do?

PM Lee: I would say three things. One, stabilise your relations with China, because for the rest of Asia, we depend on stable US-China relations in order for us to have a secure and predictable environment in which we can make a living and live our lives. It is a big ask but it is important for the US too.

Secondly, I would say, please try and develop a bipartisan consensus so that there is stability and predictability in US-Asian relations. Not just to do the right thing for your administration, but make a consensus so that the policy will last beyond your administration, and people can plan on it and can depend on it. We had the Obama administration and they talked about the rebalancing towards Asia and many Asian countries supported that. We asked Obama, what will happen after your administration? He said, well, this is irreversible.

But the Trump administration has a different take. They have raised issues of compensation and payments with the Japanese and South Koreans. They have also talked about putting more emphasis on Asia, which is welcomed, but it is a quite different mood from what Obama used to do. And we do not know what Trump's successor, or the successor’s successor, is going to do. 

If you can establish stable and predictable policy with bipartisan consensus, I think it will be a great help to all your friends and partners who want to be able to depend and rely on you without the risk that one day, the big power may suddenly decide its interests lie elsewhere. 

Having asked those two things, I will make one third ask which, by comparison, is perhaps not so huge. That is to find a way to come back to the Trans-Pacific Partnership (TPP), which America took the lead in negotiating, but the Trump administration said no, this is no good for America, we walk away from it. But the rest of the TPP members have come together, followed through and we have the Free Trade Agreement with 11 parties without the US. But the US can find a way politically to come back and join it. You are not only advancing US’ interests in the region, you are also setting a dynamic in the region towards cooperation and the right rules, which will help the region to integrate, build trust, raise standards for trade and economic exchange between the countries. Who knows one day, the Chinese may decide they have to come and join the game and participate by the same rules. I think that you will have had a win-win (situation). I only asked three things.

Moderator: In the United States, we are obsessed with what is going on in North Korea. Are people in Asia as worried as we are in the United States about North Korea? Can you give us any insights into Kim Jong Un?

PM Lee: We do not know what Kim Jong Un is thinking. We hosted the Trump-Kim Summit in Singapore. They came, we met them. I met both President Trump and Chairman Kim but I cannot say that I have any special insight. We are worried; we do see this as something, which can upend Northeast Asia, and I think in Asia. If that happens, I doubt very much that Southeast Asia will remain unscathed. But that is not something which we have a lot of leverage on.

Moderator: A final question before we take some questions that have been sent in. What do you do for relaxation? You seem to be healthy and you have been doing this for a while. You must take some time off to relax by doing math problems, because you are a former math major at Cambridge. Or what do you do? Do you work on your computer games that you like? What do you do for relaxation and stay healthy?

PM Lee: I exercise, I walk, I do Pilates, I take photographs, I enjoy taking pictures of people and of places in Singapore. I try to keep my home computer network running, but now I have two sons who are computer science graduates and they do it, and I am just a bystander.

Moderator: Let me ask a few questions that have been sent in. One is from Michael Anderson and he wants to know how Singapore Airlines and Singapore's casinos are coping with the COVID-19 crisis.

PM Lee: The casinos have reopened. I do not think they can have the same tourists flow as they used to, but they are operating. Singapore Airlines is operating but the passenger load is way down. We are actively trying to develop green lanes and safe travel arrangements with other countries where COVID-19 is under control, so that we can restart the traffic.

Moderator: Many times people have thought Singapore Airlines is the best in the world. Is it still the best in the world in your view?

PM Lee: Yes, of course. I am convinced.

Moderator: So here is a question – what kind of role do you think India can play amidst the current US-China tensions?

PM Lee: I think India has great potential to grow. Their population is younger than China's. It is about the same size as China's, but they are not at the same level as China is. China today is about 16 per cent of world GDP and 12 per cent of world trade. India is about one fifth of that in terms of GDP, and one sixth of that in terms of world trade. So the scale is different but on the other hand, the Indians can unleash their productive energies and grow the way China grew over the last four decades since Deng Xiaoping started reform and opening up. Then there is tremendous potential for India to make a big contribution to the rest of Asia, and to the rest of the world. At the same time, to develop a constructive relationship with China. But India is a much more complicated society than China, and they have tried very hard, and I think the present Prime Minister is trying very hard too. But it takes a while to develop momentum, and we are still hoping that they will do so.

Moderator: What are the prospects of a code of conduct in the South China Sea being completed as scheduled by 2021?

PM Lee: We will try our best. I think it will take some time. We have reached the point of agreeing on a single negotiating text, meaning a text where everybody's issues are put down, not that you have settled any of the issues, and now the issues have to be negotiated. I do not think that you can set the deadline to settling the issues, because there are substantive ones, and it will not be easy to resolve them. But we will try our best. I think it is far better that we are talking about a code of conduct, and trying to work it out, rather than having face-offs at sea, at close quarters, at risk of collisions and escalations.

Moderator: Essentially, the Chinese tech giants are investing heavily in tech start-ups and other things in Southeast Asia. Do you worry that China's tech companies will become so dominant that you will be dependent on them for tech, or the American tech companies, also very active in Southeast Asia and Singapore?

PM Lee: I do not think the Chinese tech companies are investing in a big scale in Southeast Asia the way American tech companies have invested and set up plants all over Southeast Asia and the rest of the world. They are active, they are pushing and marketing their products, including 5G products like Huawei, but they are part of the landscape and we do business with them. In the electronics supply chain, the Chinese are a significant component of it. I think more so than the Americans. If the supply chain bifurcates, it will be painful. It may still happen, but we hope that there will be trust between the two sides and it will be possible for cooperation to continue and for you to continue to use iPhones which components (are) made in China, and for the Chinese to use Huawei phones which components (are) made in the US. But it does require a significant degree of trust, and a willingness to want to work together, rather than to have a one up and one down outcome. That is the way things are going right now.

Moderator: The concerns expressed in the United States by the US government about Huawei, are they concerns that you share as well, or you are not as certain about that?

PM Lee: Our attitude is that when you buy a 3G, 4G, or 5G system, whichever system it is, everybody is going to want to try to come into it, and there is no system which is totally, 100% secure, either from the manufacturer or from other people who are interested to come in. It is a balance of the risks and the purposes to which it is going to be put, and how you can minimise the risks and operate in a way which does not lead you to conclude that you must do everything yourself. We have just called 5G requests for proposals and we did not exclude Huawei. As it turned out, in the main bids, the bidders did not choose Huawei, but Huawei will be figuring in some of the other aspects of the 5G networks, and in future bids, I have no doubt that they will be participating again.

Moderator: In your role as Prime Minister, I believe you are also (the) Chairman of GIC. For those who are not familiar with the investment world – I should disclose (that) my firm has had investments from GIC, we have had a close relationship – but GIC is a sovereign wealth fund, more or less. How has that been helpful to Singapore, does GIC invest all over the world – China, United States, everywhere, and why is it a national asset for you?

PM Lee: As our reserves grew, Dr Goh Keng Swee decided that looking after the reserves was a full time responsibility and needed a specific set of mindsets and skills, which cannot just live in a Central Bank or a Ministry of Finance. So we set up GIC as a dedicated fund manager, managing a significant part of the government's reserves overseas.

Its mandate is overseas – private markets as well as public markets, many asset classes including equities, bonds, real estate, infrastructure, and we invest around the world – emerging markets, developed economies, China, America, Europe, and they do it from a long term perspective in order to grow our reserves and to enhance their value, net of inflation – and to do so in a way which is insulated from political pressures, so that we can make professional decisions and take risks and judge risks, and make investments, which make sound financial sense. 

On that basis, I think they have performed not badly over now, probably about 40 years. In this downturn, we are very grateful for them because they have grown our assets and this year when we had to put in special spending to cope with a downturn. We have put in a hundred billion extra Singapore dollars, for our various budget packages. More than half the money came from reserves, which have built up over the years. We went to the President and got permission from the President to draw on our reserves in order to use it in this emergency.

Moderator: If somebody is watching and they wanted to know a little bit about Singapore more than they just heard from you, if you were to summarise Singapore, what do you think you would like the average person in the world to know about Singapore in a minute or two?

PM Lee: It is a small country which wants to make a success of itself in the world, through its wits, through its hard work, through its friends all around the world, and by making itself useful to neighbours, and to others who will decide, yes, it is in our interest that Singapore survives. It is in our interest that we do business with Singapore, and if Singapore does well, they too, get something out of this. Therefore, we are able to make a living, and there is a future and a bright prospect for every generation of Singaporeans.

Moderator: Mr. Prime Minister, thank you very much for this interesting conversation. I appreciate you giving us this much time.

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