Interview by PM Lee Hsien Loong with Frankfurter Allgemeine Zeitung (Jul 2009)

Frankfurter Allgemeine Zeitung: Mr Prime Minister, for the first time, the city-state is experiencing a grave economic crisis. Is your government, also for the first time, facing the threat of unrest

PM Lee Hsien Loong: I think it depends how we handle it. If we handle it well, people understand what is happening in the world, why these storms are buffeting us, then we will hang together and we will come out stronger. If we do not handle it well, people feel bewildered, or worse, abandoned, then, of course, we will have a problem. But I think Singaporeans generally understand what is happening in the world and also what we are doing to help our people come through this, to keep their jobs and to make sure that they can take care of their families at this difficult time.

FAZ: More than 200 ships are immobilised in the port and this year the economy will shrink by four to six percent. Singaporeans will face unemployment - and there are no signs of dissatisfaction with the government?

PM Lee: I think if you talk to the union ground, the union membership, based on what the union leaders tell us, they have a good grasp of the situation. Because, firstly, they can see what the Government is doing, helping them to retrain their workers and make them employable. Secondly, they have seen what has been in the Budget this year, the special measures which we have taken, which are very substantial in order to help companies keep their workers rather than to retrench them. And thirdly, when there are problems, they are able to talk to us and we respond and deal with these problems. So, I think that we are alright. Also, I would say because we have taken these measures, the actual impact on Singaporeans has been buffered and, therefore, unemployment has not gone up so sharply. If you look at the people on the streets, the people in the shops, life goes on. It is a serious situation, but it is not a calamity.

FAZ: During the Asian Crisis of 1997/ 98, the countries here were handed a bitter but effective pill: Budget discipline, privatisation, transparency. The therapy now is rather mild: Economic stimulus package on credit, bonds, nationalisation. Will these be effective?

PM Lee: I think in the Asian crisis, the IMF started off with quite a purious approach as to what needed to be done. Not just to deal with the crisis but to make a fundamental root and branch transformation of the whole system, especially in Indonesia where the IMF, I think, encouraged by the Americans, wanted to break up the whole system of monopolies, privileges, which existed. Frankly, they wanted to change the government and break up the system which Suharto was running, which was unwise. And we told them so at the time but they did not accept it until some damage was done.

FAZ: It was foolish to get rid of the military leader, Suharto?

PM Lee: I think it was unwise because then what was going to come after that? As a result of doing that, Indonesia had a very difficult decade before coming where it is. And it is not the business of IMF to go and improve other people’s governments.

FAZ: But from today's standpoint, it was not a bad idea to pave the way for democracy, or was it?

PM Lee: And if you are going to throw the dice again, you will throw it again? Maybe if we are far away in Washington or Frankfurt, you can do that. Living in the neighbourhood when you have something not completely broken, you try to improve it rather than to start from scratch and do everything all over again.

FAZ: There are also some people in Singapore who would like more democracy. In recent times, your government has relaxed the ruling on the right for assembly and allowed more oppositional politicians in parliament. Will Singapore be even more democratic?

PM Lee: We have to evolve. I think it will be a long time before we can, if ever, before we can work like the Germans or the French or the British. We are not that kind of society. It is a very open society because our people travel. Information is totally available. We are English-speaking. We are totally connected to the Internet and the world. But what will work in Singapore and what will deliver good government in Singapore is something which we will have to feel our way forward. We do not believe that you just need a framework and then it will run itself, and that whoever becomes the Prime Minister or the President is all right because if he is no good, the next Prime Minister would be better and the next administration would be better. We believe that we have to the right system but also the right people in place. And they have to make the system work and evolve the system so that it stays current and that is what we are trying to do. And we do not believe that the Western liberal democracy model, which really is something which has developed only in the last half-century since the War, is the pinnacle of human achievement and the solution for the whole of the world.

FAZ: Nevertheless the freedom to vote for your government would please most people in the world.<

PM Lee: No, I think the opposition has a fair chance to contest the elections. They exist. The elections are completely fair, but the population wants a PAP government. Singapore is smaller than Frankfurt. It is not like Germany where you have rural areas, urban areas, the East and the West and a certain stability. And you shift between the Social Democrats and the Christian Democrats and maybe somebody else in the middle. It is one little city and if the PAP did not have a mandate, it will be out across the board overnight. But the people choose and for them, it is for us to make sure that we continue to merit their confidence and their support and deliver a good government. And finally, the test is, does this or does this not deliver a government which meets the aspirations of the people? Are you better off?

Our problem is we are always reluctant to make explicit comparisons with other countries in our immediate neighbourhood. I think if you look at Singapore , at Southeast Asia or even Asia, we have a system which works well. I do not think we have let down our people or the system has let down the people. The question is how do you keep a system which delivers an outstanding quality of leadership and government. And yet at the same time have free play and the opportunity, the chance for people to say, “I want this government, but I do not like this policy or the other” And that is a balance which we have to find. That is the intention of the changes which we are making to our election rules so that there are more voices in Parliament. But finally, what we want is a system which delivers a good government and provides for aspirations to be fulfilled and the voices, all range of voices to be articulated. It is the ideal.

FAZ: Many believe that China will emerge out of the crisis a winner. Could this increase the popularity of autocratic systems?

[section section_speaker_id="1" section_short_name="0"]No, I think all countries have to find their own way forward. The old mantra used to be that if you develop, you will need democracy. And if you do not have democracy, your chances of developing are less. We did not believe that simplistic approach because in many countries, democracy just does not have the preconditions to work. And it does not work the way it does in Europe or in America. And in Asia, not many countries work the way it works in Europe or America. India does not work like that, Indonesia does not work like that. The Philippines does not work like that either.

FAZ: If it is true that the rise of China will be accelerated with the crisis, shouldn't the smaller countries in Southeast Asia be afraid?

PM Lee: We work on the basis that China is emerging. That its economy is transforming. That it is opening up and growing. That its influence and interests internationally correspondingly will grow. And it is visible year by year. We also believe that this is good for Asia and good for the world. Because a China which is plugged into the world and dependent on globalisation and international order will be a force for stability, unlike a China which is one billion people and poor and can cause a lot of trouble. The crisis probably has, I am not sure it has fundamentally changed its position, but it has probably maybe shifted the time-scale a little bit.

FAZ: The West will be pushed back faster by the crisis?

PM Lee: I would not write off the developed countries, particularly America. Because whatever you may say about the American economy, their ability to reinvent themselves, to rise from the ashes each time there is a disaster, to come up with new talent, new systems, new vibrancy, is not to be underestimated.

FAZ: Do you not see this ability in Europe?

PM Lee: I think Europe is a different society. Firstly, this is because of a very different attitude towards moving ahead and prospering, as opposed to social solidarity and taking care of the least successful members of society. And, therefore, when somebody comes up with something new, first of all, it is much harder to do. Secondly, the social attitude towards it is different – it is fundamentally different from the social system and the welfare state which you have built, which reflects the social values. Your demographics are different and it is an older society. It tends to be a more conservative society. And I think that is something that is not going to change inEurope for quite some time.”

FAZ: For the years the EU has been trying to negotiate a free trade deal with Southeast Asia. But negotiations have stagnated - mainly because of Myanmar. Is there a way out?

PM Lee: It depends on Europe. Europe has to decide to do business. Myanmar is the way it is and will have to find its way forward, which is going to take some time. And Europe is not going to change Myanmar by not doing business with ASEAN.

FAZ: What can the EU do in order to, despite Myanmar, overcome the deadlock with ASEAN?

PM Lee: When Europe is ready to do business, we will resume. I think realistically, what you can do between Europe and Southeast Asia, with ASEAN, is to have some framework umbrella agreement with ASEAN. Because the countries are so disparate and the political constraints also exist, but under that framework, you can do individual, make individual progress with countries which are ready to make progress, like Singapore . And that will be a signal to the rest of what can be done and why you ought to move because others are already moving ahead and a certain competitive dynamic will develop. It is really a pity because the ASEAN countries have deals with Japan, Korea, Australia, New Zealand, and now deals with India, I think which are signed or about to be signed. And not to have Europe is really Europe’s loss.

FAZ: Has Europe has missed out something?

PM Lee: Yes. Not just business-wise. It is really strategically. The question is whether Europe sees itself as having a world role or not and if your interest is purely trade. If your interest is beyond trade and you want influence, you have to take an interest in what is happening in Asia.

FAZ: You don't see Europe sitting at the big table?

PM Lee: I think you have not reached a consensus where you are able to have a coherent European foreign policy. I mean, the countries have very different perspectives, the British against the rest, but even the French and the Germans do not always see identically. Therefore, it is very difficult to have a European global strategy.

FAZ: Would more European engagement be welcomed in Asia?

[section section_speaker_id="1" section_short_name="0"]Yes, very much so. In terms of having an interest in the region and going beyond the purely economic, I think Europe has a role in Asia. Your companies are here, there are exchanges. You know that Asia’s rise or emergence yields benefits to Europe. Whereas now, you look at Asia, every time some country is prospering, you say, ah, my job is going there. That is not positive.

FAZ: Do you see Europe's influence in Asia dwindling?

PM Lee: I think Europe's relative position in the world in terms of the weight of your GDP is not negligible. You are bigger than America, but your attitudes, your perspectives, your ability to look outside of Europe and beyond the United States across the Atlantic to Asia, I think that is something which is being tested. Because you are so preoccupied with European issues now — integration first and then bringing in the new members and the Central European members — and it takes up so much of your energies and you are debating your Constitution, you are going to do that. Now, you are trying to work a treaty. I think it is taking up a lot of attention. I mean, It is work which needs to be done. But Asia is growing and you are not really engaging as much as you could. I think Helmut Kohl spent a lot of time engaging, Chirac spent a lot of time. He also had a personal interest in Asian culture, Japanese, Chinese culture, artefacts, porcelain. I am not sure that Sarkozy has the same interest or that Angela Merkel has spent quite as much time.

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