PM Lee Hsien Loong at the Lord Mayor’s Dinner (Mar 2014)

A Tale of Two Cities

My Lord Mayor

Your Excellencies, my Lords, Ladies and Gentlemen

Introduction

I thank Lord Mayor Woolf for her very kind words.

I am deeply honoured and yet humbled. I would like to dedicate this award to the people of Singapore who have worked so hard to build our nation. Special credit must go to our Pioneer Generation, who dreamt of a far better Singa¬pore when we became independent, and took us a long way along the journey there. This award also reflects the long and close friendship between London and Singapore and between our peoples. I am therefore happy that my colleagues and friends are here to share this occasion with me.

Memories of London

I first visited London in 1969. I was a teenager, and London seemed marvellous. It was the Swinging Sixties, and London was the capital of cool. Yet it was also a time of upheaval: Protests against the Vietnam War, student sit-ins, hippies and flower power. I had an enjoyable but sober time attending plays and concerts, exploring museums and art galleries, and spending hours browsing in the greatest bookshop in the world – Foyles.

Later I went to university not in London, but in Cambridge, then still in splendid isolation in the Fens. But I would visit London regularly, because my late first wife, Ming Yang, was then a medical student at the Middlesex Hospital. Hence London in the early 1970s held many happy memories for me.

But for Londoners and for Britain, those were difficult times. The British Empire was over, and Britain was adjusting to its new place in the world. Bitter union disputes afflicted the economy and disrupted lives. I especially remember the miners’ strikes, because the consequent blackouts caused me to attend supervisions (tutorials) in Cambridge by candlelight. 

Global events were also affecting the British economy. One year (1973) I arrived at Heathrow Airport having spent the summer back home. I found a group of Arabs excitedly trying to find out what was happening in the Middle East. The Yom Kippur War had broken out. It led to the first OPEC Oil Shock which caused inflation and recession worldwide. This worsened England’s woes, and cast a pall over London for years.

But by the end of the decade the situation and mood improved. Margaret Thatcher became Prime Minister in 1979. Thatcher’s reforms were fiercely contested, but they fundamentally altered Britain’s economy and society.

Britain’s victory in the Falklands War in 1982 boosted national pride and restored belief to your people. That year my father Mr Lee Kuan Yew became an Honorary Freeman. In his speech, he spoke of his experiences of London since World War II, and challenged Britain to draw on the spirit of the Falklands War to rejuvenate and transform itself.

And so Britain did. In the decades that followed, Thatcher and her successors – from both parties – oversaw a steady revival in Britain’s fortunes. Britain outperformed many Continental economies, reversing the situation in 1960s and 1970s. Optimism returned, and Britain’s international standing rose.

Resurgence of London

Even more than the rest of Britain, London did well, and emerged as one of the world’s great cities. It attracted talent and capital from many countries, and rejuvenated its urban and cultural landscape. London was cool again.

A big factor in London’s resurgence was financial services. London had long been a financial centre. But by the 1980s banking was changing. New technology, ingenious new approaches to risk, credit, and derivatives, and freer capital flows were transforming the business. London responded faster than most centres. It progressively deregulated and liberalised the industry, culminating in the Big Bang of 1986. Financial services took off, and became a major contributor to the British economy for the next two decades. The City of London became a cosmopolitan, vibrant centre of world finance and wealth. 

These were decades when Singapore was developing rapidly. Asia was on the move, and we were lucky to catch the winds. We broadened our economic links beyond our old colonial connections, to attract investments from Europe, US and Japan, and develop new markets in these countries. We seized opportunities in China and India as they opened up to the world. We integrated more closely with our Southeast Asian neighbours in ASEAN. 

At the same time, we continued to nurture and strengthen our historical friendship with Britain and London, which is stronger now than ever. British companies like Rolls-Royce and GSK have made major investments in Singapore, while more Singaporean companies are investing in the UK. Temasek Holdings has decided to site its European office in London, and will be opening it tomorrow. ComfortDelgro is operating buses and cabs in London, so now a Singa¬porean company has The Knowledge! 

Our ties are not just about business. In May, Singa¬pore will host a stage performance of one of Britain’s most important cultural exports – “Yes, Prime Minister”. Singaporeans now form one of the biggest foreign student contingents in Britain, despite our small population. Thousands of Singaporeans study, work and live in Britain, which is why we are holding our Singapore Day in Victoria Park this Saturday.

One trend we have tracked closely is London’s emergence as a global financial centre. Unlike London, Singa¬pore has not always been a financial centre. But after independence, we studied how London had carved out a role for itself as a centre for offshore US dollar business, servicing Europe. So Singa-pore started the Asian dollar market to service Asian countries around us, emulating London’s Eurodollar market. That was how we became a financial centre.

By the late 1990s, this strategy was reaching its limits. It was time to take another step forward. Again London was our model. We felt that Singapore could be the “Lon-rich” (London + Zurich) of the East. Hence we liberalised our regulations, opened up our markets and accepted more risks, in a controlled way. But we were less experienced and established than London, and had less margin to recover from a major setback. Therefore we did not go as far as London did in letting go, which in hindsight was just as well.

I was then responsible for the Monetary Authority of Singa¬pore. So I often visited London, to understand your thinking, study how your system worked, and explore how we could cooperate in financial services. I would visit not just the Square Mile, but also Canary Wharf, which had become a vibrant new centre. So when Singa¬pore built the Marina Bay Financial Centre in our new downtown, we picked up many ideas from Canary Wharf, and thus fortunately avoided the early difficulties that Canary Wharf encountered.

A Global City

Today, London is not just a financial hub, but a global city for talent, innovation and culture. Each time I visit – most recently in 2009 – I feel the energy and verve of the city. Were Wordsworth to visit Westminster Bridge today, he would surely sense that all that mighty heart is not lying still, but pulsing powerfully*!

*Wordsworth, Composed upon Westminster Bridge, 3 September 1802.

London’s global standing is an enormous advantage both for itself and for the UK. But it also brings stresses and strains: Higher property prices, challenges in social integration, and the nagging worry that London no longer feels an English city.

Singapore too is striving to be a global city, offering a high-quality living and cultural environment at the crossroads of East and West. Like London, we too must manage the stresses and strains of being a global city. But unlike London, we have no larger country which is our hinterland. Our city is our country. Hence we must get the balance just right – between national identity and cosmopolitan openness, between free market competition and social solidarity.

London and Singapore are now both at a crossroads. In London, financial services have brought you a long way since the Big Bang. But as is wont to happen, a good thing went too far. After the Global Financial Crisis, you have spent six lean years putting things right. There has been much soul-searching about the future of the financial industry and the role and ethics of bankers. You must find a new operating model to remain a financial hub while avoiding the excesses of the past. 

More broadly, to thrive London has to remain open, and continue welcoming talent, whether they are bankers or plumbers, whether they are from Europe or the rest of the world. For like all global cities, London depends on talent to stay ahead and to be globally competitive, and no lead is permanent. 

Singapore too is making our way forward. We are pursuing economic growth based on productivity and innovation, in order to uplift our people’s lives. We are sparing no effort to educate Singaporeans, both the young and those already working. We are addressing growing social needs, while maintaining our drive and élan. The opportunities are all around us, as Asia continues to rise. We strive to stay cohesive and united as we continue pursuing excellence, so that we can stay up there with London and other top cities in the world.

Conclusion

I am optimistic that London will grow from strength from strength with quintessential British resourcefulness and resolve. I am equally confident that we in Singapore will build a brighter future for ourselves and our children.

Singapore and London are two cities, perched off the shores of two continents, but connected by an intertwined history and many personal ties and friendships. As your youngest Freeman, I look forward to building on our close and longstanding friendship, so that this happy Tale of Two Cities will long endure.

Let me end this speech with a toast to the Lord Mayor and the City of London Corporation.

Explore related topics

• Foreign affairs