charlie rose interview with lee hsien long

8/8/2019 Charlie Rose Interview With Lee Hsien Long

1/23

CHARLIE ROSE INTERVIEW WITH LEE HSIEN LONG

Current Affairson Wednesday, April 14, 2010

CHARLIE ROSE: Singapores Prime Minister Lee Hsien Loong is here. He is in

the United States this week for the nuclear security summit and for meetings withAmerican officials, including the secretary of state.

Hes been prime minister since 2004. He is only the city states third prime minister.He is the son of Lee Kwan Yue, Singapores founding father. I am pleased to havehim back on this broadcast with me while hes making this visit to Washington.Welcome.

LEE HSIEN LOONG: Hello.

CHARLIE ROSE: Tell me what you think was accomplished at this summit of 46nations.

LEE HSIEN LOONG: I think President Obama did the world a service. This is anissue, nuclear security and nuclear terrorism, which is important but not urgent. Itsnot something which we have to solve overnight, but its a problem which is a realproblem, and if we dont do something about it, some time, some place somethingdisastrous will happen.

And he managed to get many leaders together, focus their minds, put on the tablewhat they are able to do, what they are planning to do further to secure the nuclearmaterials and transit and trade and smuggling of these materials, and commit to takefurther steps together to make the world a safer place.

CHARLIE ROSE: So over the next four years, the goal is to make sure that theyknow where all the nuclear weapons are, they can make sure that theyre safe and notlikely to fall in the hands of terrorism?

LEE HSIEN LOONG: Well, the nuclear weapons, the loose nukes, are the firstproblem, because thats -- if I were a terrorist, thats the first thing Id look for.

CHARLIE ROSE: Look for the loose nukes.

LEE HSIEN LOONG: Yes. But even short of the loose nukes, if you can find highlyenriched uranium, you might find people smart enough to put that together into abomb. Theres enough information on the Internet to make a good stab at it.

CHARLIE ROSE: How much of the topic here was about Iran? Or was it onlyamong certain nations?

LEE HSIEN LOONG: Im sure the key players, the P-five plus one, permanentmembers of the U.N. Security Council plus Germany, were discussing it. I know theywere. Its a subtext. We didnt explicitly discuss Iran, but obviously Iran is one of theconcerns.

We were not at the meeting, but if they have this capability either to make theirweapons or to make the materials, then there are implications for proliferation andfor nuclear security.

CHARLIE ROSE:Give me your assessment, if you will, of President Obamasglobal leadership at this time. He came here after the health care success in America.


2/23

He came here after a deal with -- he came to the summit with the Russians, and nowthis summit.

Is he becoming, beyond the fact that he represents America, an important player?

LEE HSIEN LOONG: America is always an important player, and the president is

always a key person. And right now President Obama has inherited a full plateglobally -- Iran, which we mentioned, Iraq, which is sort of on the mend but I thinkwill be a concern for some time to come, Afghanistan, which is a long way from beingdone, North Korea, relations with China, relations with Russia, Israel, Palestine.

And amidst all this busy program we hope that he has some mind share and somefocus to pay attention to southeast Asia and a little bit to Singapore.

CHARLIE ROSE: Do you feel that he is doing that?

LEE HSIEN LOONG: I think hes doing a good job of that. He came to the APECmeeting which we hosted in Singapore last year. He held the first ever meeting of the

U.S. president summit with all ten of the ASEAN leaders, including Myanmar, and it was a good meeting. All ten welcomed the meeting and welcomed Americasengagement in the region. And thats saying something.

CHARLIE ROSE: China, especially today and its relevance to this, certainly withrespect to Iran, where do you see China and its role in the world and China in itsrelationship to the United States?

LEE HSIEN LOONG: I think Chinas relationship with the U.S. is crucial. Its amost important bilateral relation in the world now. And both sides have a big stakein making sure it turns out right and not turns out sour, because our trade, ourinterdependence, our national security interests, of course they are issues where youwill rub against one another, human rights or Google or whatever.

But both sides have a greater stake in keeping it right than letting it go wrong.

And in Asia, we particularly dont want to have to choose sides between China andthe U.S. We want to be friends with both. There are a lot of opportunities in China.China is making a big effort to win friends all over the region and doing well at this.

But at the same time, all the countries in the region know that America plays anindispensable role, and we would like America to continue to do that.

CHARLIE ROSE: Are there things that America should be doing to make better itsrelationship with the region, China, but also Singapore, also --

LEE HSIEN LOONG: Attention is, of course, one thing. If your mind is focusedmany possible good ideas will come along.

But one major area is trade. The Chinese -- our trade in Asia with China is growingrapidly. All your major allies in Asia, except perhaps the Philippines, have China astheir number one or number two trading partner.

So if you want to be at the table, if you want to enhance this relationship and talkabout security and political relations, you must have economic relations and youmust take an active trade agenda. And that means promoting free trade. That meanspushing for America to be present in the region and your companies and opening

American markets and enhancing their relationship.


3/23

CHARLIE ROSE: With respect to American companies, my impression is theyhave a huge presence in Asia and Singapore.

LEE HSIEN LOONG: But its an economy which is growing and there are manymore possibilities.

CHARLIE ROSE: So they should do more?

LEE HSIEN LOONG: I think there are many possibilities for them to do more,both to exploit the markets which are in Asia and also to be based in Asia to producefor the world. A lot of Chinas trade surplus with America has American companiesbased in China manufacturing and selling back to America.

CHARLIE ROSE: There is also the issue of currency.

LEE HSIEN LOONG: Yes.

CHARLIE ROSE: Everybody wants China to change its currency.


CHARLIE ROSE: And let it rise.

Do you? Do you believe they should? Or are you prepared to urge them to do that?

LEE HSIEN LOONG: I think the position which they took before the crisis, to letthe currency float up, actually rise up gradually in a managed sort of way, was theright thing to do in their circumstances. They are running a trade surplus, theirexports are booming.

If they allow the currency to rise, it will -- it may raise the costs some, but it will at thesame time diminishing the inflationary pressures within that country. And its part ofthe adjustment as you become more productive and your standards of living go up.

They shifted to a more conservative position over the last two years and fixed to theU.S. dollar.

CHARLIE ROSE: Right.

LEE HSIEN LOONG: That caused a lot of angst.

CHARLIE ROSE: And helped their exports.

LEE HSIEN LOONG: Yes, temporarily. But after awhile it causes overheating inthe economy. And I think in this situation really they should revert to where theywere before the crisis and allow the U.N. to go up gently again.

CHARLIE ROSE: The "New York Times" has an editorial today reflecting I thinkwhat many people believe, is a number of nations ought to come to China and saythat so it doesnt look like one nation is trying to pressure them.

LEE HSIEN LOONG: I think many people have made the point to them, and theyhave to make their own calculations, and when they do it, theyll do it for their ownreasons.

You know the Chinese mind. Where do you think they see it, because people say theydo not want the west especially to pressure them and to treat them --


4/23

I dont think its just the Chinese. No country wants to be pressured. You askBenjamin Netanyahu or any other leader whom you have had dealings with. Youhave to have a certain courtesy and respect and restraint. But countries have to makecalculations in their own interests, and America has many ways to influence theircalculus.

CHARLIE ROSE: Has President Obama set the country on a new course as far asyou can observe, because youve been prime minister since 2004?

LEE HSIEN LOONG: I think he set a new tone. His instincts are different. Hispersonal styles and his strengths are a different set of strengths from PresidentGeorge W. Bushs.

CHARLIE ROSE: How is his instinct different?

LEE HSIEN LOONG: Well, I think he is much more prepared to start from talkingwith his allies rather than starting from deciding where America wants to go and thenbring along a posse of the willing. It doesnt solve all problems, but its a refreshing

new approach which I think has improved Americas image in a lot of the world,including the Muslim world.

CHARLIE ROSE: And how does that make a difference if Americas image --

LEE HSIEN LOONG: It doesnt solve the Israel-Palestine problem, but its one ofthe ingredients which America must deploy when youre trying to tackle these verydifficult issues.

The issues will be there for a long time to come. You wont clear them all even withtwo presidential terms. But youre now in the world where America is a superpower,but youre interdependent and you have to work with other countries to make thingshappen, which is what I think Obama did with this nuclear security summit.

CHARLIE ROSE: And with Russia?

LEE HSIEN LOONG: Indeed.

CHARLIE ROSE: Was the United States hurt in terms of its relationship withChina because of the sale of the aircraft to Taiwan and receiving the Dalai Lama?

LEE HSIEN LOONG: You have to do what you have to do. These are not issueswhich you could expect to be received with acclaim in Beijing, but you have to makeyour own calculations and decide whats in the long-term interest and what yourrelationship with China can weigh.

You havent -- you have a reputation to hold up. You must be seen as a reliablefriend. At the same time, you must also be a friend of your allies. But at the sametime, you must know which are the issues which are red lines, and if you want tocross them, do not do so without thinking about it.

CHARLIE ROSE: The consequences of?


CHARLIE ROSE: China -- China came to the summit and people were pleased bythat because there was a feeling right before that they were being more aggressive

and, in a sense, less friendly to the United States.


5/23

LEE HSIEN LOONG: I think that they are trying to calibrate their position,because having emerged in the world and become economically much more powerfulthan before and influential with friends and connections all over the world -- DengXiaopings old victim to hide your light under a bushel and go quietly into the world,it still applies while theyre trying to figure out how to apply it.

CHARLIE ROSE: Because their light is so much brighter today?

LEE HSIEN LOONG: Well, because now when they move they can no longer justmove as a small country. It affects the whole system. And you have to decide how totrade off your interests, maximizing for yourselves, versus the interests of the wholesystem and your long-term requirement to be a constructive player in the worldsystem.

Which is what America has done since the Second World War. You were at one timethe enormously preeminent superpower. But there was a restraint, there was a goodwill, there was a generosity of spirit. And so after 60, 70 years in Asia, people still sayAmerica plays an indispensable role to this day.

CHARLIE ROSE: Yes.

LEE HSIEN LOONG: And I think that is something which if the Chinese couldachieve it would be quite something.

CHARLIE ROSE: If the Chinese could achieve --

LEE HSIEN LOONG: If the Chinese could achieve that acceptance of thatplace in the world --

CHARLIE ROSE: So that people around in the world in Latin America and Africa -

LEE HSIEN LOONG: They are going to be powerful, right, but they are not goingto be this middle kingdom because the world is not like that anymore.

And however powerful you are, you need friends, you need allies, you need a peacefulworld environment in which they can operate and they can concentrate on growthand development and improving the lives of their people.

And that takes -- that requires you to take a long-term perspective and not try tomaximize on every single issue, however difficult it is.

CHARLIE ROSE: For China or United States or both?

LEE HSIEN LOONG: For both. Im saying America has been able to do this byand large over a long time, and China now emerging I think was having to recalibrateits position in order to take these hitherto totally alien considerations into account.

They never had to think this because previously -- I mean, their share in world tradewas small. Their impact on world affairs was not significant. They could do whateverthey wanted, and its a closed kingdom. But now you cant.

CHARLIE ROSE: What do you think they will do on Iran?

LEE HSIEN LOONG: I think they will -- they are discussing that among the P5now. I believe President Hu had a discussion with President Obama on that.

CHARLIE ROSE: Your impression that was a very good meaning?


6/23

LEE HSIEN LOONG: From what the administration people have told us, the U.S.side was happy with it and felt there was progress. But their calculation will be a littledifferent from your calculation. You want to -- you are very seized with the issue ofIran becoming a nuclear power and the implication strategically and the Middle Eastand worldwide.

CHARLIE ROSE: Do you agree with that?

LEE HSIEN LOONG: Yes, I agree with that.

CHARLIE ROSE: And does China agree with that, you think?

LEE HSIEN LOONG: I think the Chinese intellectually agree with that, but theywill at the same time calculate firstly their reliance on Iranian oil, secondly theiroverall relationship with America and other critical issues to them, and then try anddecide how this fits into the overall system of their foreign affairs.

CHARLIE ROSE: Chinas also experiencing -- each leadership level, each time they

have a next leadership decade, they seem to be different. And give us a sense,because you represent that in Singapore, how the upcoming generation of Chineseleaders and other Asian leaders are different from those they succeeded.

LEE HSIEN LOONG: This current generation -- The generation before thisexperienced the Second World War and the Japanese invasion and occupation ofChina. It was an indelible impression for them and the experience, the revolution asthe communists took over China, and the first really exhilarating years -- the GreatHall of the People in 12 months and all that went on in 18 months, and thistremendous sense of China standing up again.

The current generation of leaders experienced the Cultural Revolution. They knowwhat a mess China can be -- it was mismanaged -- and how important it is that Chinaget its act together, what challenges China faces internally, and how important it isfor China to grow and improve the lives of its people and to continue to do this foranother generation at least.

The next -- or maybe the next-next group of leaders, would be post-CulturalRevolution. They will have grown up in 30 years of reform and opening up. They willhave lived in a China which is connected with the Internet with people who knowwhats -- who are much better informed with whats going on throughout the world,where interests are expressed.

There will be tensions between different parts of China. And they will have to runthis whole system not as a central system but with a market economy and with a

coherent political framework on top of that. And I think they will have a bigchallenge.

CHARLIE ROSE: What is it they see as a system that they would like to have? Imean, is it evolving away from the system that Mao had? Clearly it has in terms of itseconomy. But overall, is that an evolution you believe is inevitable for China?

LEE HSIEN LOONG: I think it will evolve. I do not think they will ever havepresidential elections every fourth year like you do.

(LAUGHTER)

CHARLIE ROSE:Yes.


7/23

LEE HSIEN LOONG: But it will have to evolve and its happening slowly, maybeslower than it ought to, but theyre extremely cautious about these --

CHARLIE ROSE: And what are they worried about?

LEE HSIEN LOONG: Instability. They have one Chinese word for it, "Luan,"

which is "disorder." And having seen the Cultural Revolution, they dont want to goback.

CHARLIE ROSE: And then they saw Tiananmen.

LEE HSIEN LOONG: And theyve seen Tiananmen, and they saw Falun Gong, whoappeared as a flash mob one day in front of the inner sanctum, and it was the firstthey ever heard of Falun Gong, and that scared the daylights out of them.

CHARLIE ROSE: It did?

LEE HSIEN LOONG: Yes. Thats how they discovered it existed.

CHARLIE ROSE: But is that a threat to them?

LEE HSIEN LOONG: When they discovered who was in the Falun Gong and howmany of the senior officials had joined the secret group they were

CHARLIE ROSE: they were what?

(LAUGHTER)

LEE HSIEN LOONG: They were shaken.

CHARLIE ROSE: And so therefore they have --

LEE HSIEN LOONG: So they are concerned about disorder, but at the same time Ithink they though they have to allow for people to be engaged in the system and tomake able Chinese feel that this is a system which reflects their interests and theiraspirations and which they have some say over.

You may not vote for the president, but if you are a person with ideas and whoseviews are relevant, they ought to carry weight and should be expressed somewhere inyour system in your policies and outcomes. I think they know how that. How to getthere, I dont think theyve worked it out, and they are moving only quite slowly.

CHARLIE ROSE: Because they havent worked it out.

Do they want to be part of the existing international system?

LEE HSIEN LOONG: Yes, but they would like to have their share of the sunshine.

CHARLIE ROSE: Which is reasonable?

LEE HSIEN LOONG: Which is reasonable. But how do they get their sharecompared to where they are and what is the transition like, thats something that hasto be managed.

CHARLIE ROSE: How would you define their share of the sunshine?

LEE HSIEN LOONG: Well, they would tell you they have 1,300 million people.


8/23

(LAUGHTER)

And each one of them --

CHARLIE ROSE: Thats the fair share.

LEE HSIEN LOONG: And each one is entitled to so many kilograms of carbondioxide.

CHARLIE ROSE: They do say that, thats right. They say we have a billion threeand the world has six billion, figure it out.

LEE HSIEN LOONG:Yes. Well they know that they are not there because they willalso tell you that per capita income is very low, that there are many people below thepoverty line, that agriculture is abysmal by global standards of productivity, and thatthey have to make major transformations even to get to a modest middle-incomelevel.

So their thoughtful leaders have that prominently in their minds and therefore arequite cautious about over-asserting their arrival. But not all young people are quiteas careful about it.

CHARLIE ROSE: Your father told me once that Deng Xiaoping came and wasappreciative of what happened in Singapore and sent some people from China --

LEE HSIEN LOONG: Yes, many.

CHARLIE ROSE: Many, exactly, to observe, and said we want to do that. How dowe do that? What are they looking at now to say, we want to do that?

LEE HSIEN LOONG: They looked at many things. They came, they looked at ourschools, they looked at our water conservation, the way we recycle waste water andturn that into new water which we can use again for industrial and drinking purposesindirectly.

They look at the way we manage our financial system. They look at the way wemanage our housing. They look at our health care system. They are interested inmany of the pieces we are doing.

But most of all they want to know, how do you run a system where the governmentcan have legitimacy and theres order and theres continuity over a long period oftime? And the system works and is incorrupt and theres accountability.

And thats a secret which is -- they think its a secret. In fact, they can see how we doit. But to be able to translate what we do, 3 million people in a tiny little island to1,300 million people, one quarter of humanity, thats not so easy, which is not to saythey havent learned.

But its to say it means what we do in Singapore, its a model they can look at, its veryinteresting. But they have to work it out how they make their own model in China.

CHARLIE ROSE: Are they becoming creative, innovative, less as we used to havethis image of China as being more sort of --

LEE HSIEN LOONG: They are not like that at all. If you visit you will see its a

very diverse, very vibrant place. Many arguments and debates, very open discussionof many issues, except far few taboo areas.


9/23

CHARLIE ROSE: Which are politics.

LEE HSIEN LOONG: The Communist Party, Taiwan, Tibet, Mao Tse Tung.

CHARLIE ROSE: But politics --

LEE HSIEN LOONG: Other aspects of politics would be discussable.

CHARLIE ROSE: But whats not discussable?

LEE HSIEN LOONG: Whats not discussable is that the Communist Party is rulingChina.

CHARLIE ROSE: So any dissent from that is not allowed?

LEE HSIEN LOONG: Thats not allowed.

CHARLIE ROSE: Thats a giant insecurity, isnt it?


CHARLIE ROSE: So Google, how do you explain Google?

LEE HSIEN LOONG: Google operated in China, and they decided to move. Imean, one of the founders --

CHARLIE ROSE: Well, they decided to move because they refused to censoranymore.

LEE HSIEN LOONG: Because one of the founders changed his mind. Brin --

CHARLIE ROSE: Sergei Brin.

LEE HSIEN LOONG: -- who to start was not keen but allowed himself to bepersuaded. After they got hacked he persuaded the other people in Google andparticularly Eric Schmidt, and they moved to Hong Kong.

Practically nothing has happened because you can still get Google in China, exceptnow its censored by the Chinese rather than by Google!

(LAUGHTER)

Whats the difference? Google is still in China. Their web search is not in China, but

their R&D is still in China, their business is still in China. So in fact its really fromour point of view, its not helpful to their image, but its not earth-shaking.

CHARLIE ROSE: But on the other hand, some people are applauding Google forstanding up, for Sergei Brin saying "I dont want to be part of this." But you dontagree with it?

LEE HSIEN LOONG: He had to make his decision. These are decisions Googlehad to make. They were on an edge. A small thing happens which makes them tip adifferent way.

CHARLIE ROSE: Yes. What should we learn from the Chinese experience? What

should Singapore, since they are learning from your experience and perhaps fromother experiences?


10/23

LEE HSIEN LOONG: I think firstly that sense of drive and desire that tomorrowmust be much better. Its overwhelming. If you talk to the Chinese or thebusinesspeople or the bureaucrats or the young people in the schools, that drive tomake tomorrow better is tremendous.

And that willingness to explore and examine alternatives -- what should we change?

What should our system be? How should we make our health care work or ourpensions? Or even anti-pollution measures? And try and work a system which, if itdoesnt work, well, we will change it again.

They are -- I dont know that they can do this across the country, but where they dothis its very impressive.

CHARLIE ROSE: And they feel that way. Their own self-esteem has grown andthey really want to say weve been around for a long time and look at how good we arenow.

LEE HSIEN LOONG: Especially after the Olympics and now after the Shanghai

Expo which is going to --

CHARLIE ROSE: Starts May 1st. Thats their symbol to the world that "We havearrived."

LEE HSIEN LOONG: Yes, or "We are arriving."

CHARLIE ROSE: "We are arriving."

India, because you asked us to focus on your region -- India. Where do you see Indiain all of this?

LEE HSIEN LOONG: We would like India to be a big part of the story in theregion because from our point of view in Southeast Asia, we have India as well asChina, we will have two wings to fly with.

(LAUGHTER)

And it makes a big difference.

CHARLIE ROSE: Yes.

LEE HSIEN LOONG: Now, the reality is Indias GDP is about a third China,purchasing power parity. Indias foreign trade is about one-fifth Chinas. And Indiais growing rapidly, but the transformation I think is not quite as deep as pervasive as

Chinas is, and I dont think it can take place in the same way as China has been ableto do.

CHARLIE ROSE: Because of their political system or something else?

LEE HSIEN LOONG: Its because of their political system, but their politicalsystem also reflects the diversity of the society, the caste, the religions, the differencesbetween the different provinces are very deep.

CHARLIE ROSE: So is India an argument for democracy or not?

LEE HSIEN LOONG: Well, India is a model unto itself.

CHARLIE ROSE: Really?


11/23

LEE HSIEN LOONG: I mean, thats the way it works in India. You probably cantgovern India the way China is governed, but if you say thats what you should dosomewhere else, say in Singapore, I think --

CHARLIE ROSE: But could you --

LEE HSIEN LOONG: -- thats too complicated for us.

(LAUGHTER)

CHARLIE ROSE: Could you say that China could not have become what it didwithout the system it had?

LEE HSIEN LOONG: I think they could not have become what they did --

CHARLIE ROSE: As fast?

LEE HSIEN LOONG: -- if they had not evolved their system and their incentives

and their policies in order to get the whole country moving.

Theres a phrase in China that the mountains are high and the emperor is far away.So you can give any orders you like out of Beijing where the government is, but faraway in the provinces your governor, he does what he wants, and he will report to youwhat you want to hear.

(LAUGHTER)

So for them to have got the whole country moving in this way, not micromanaged andcentrally directed, but all with its own centers of growth and dynamism, thatsremarkable.

CHARLIE ROSE: Why doesnt the world speak out more intense human rights, notjust in China but around the world, in Myanmar, everywhere else?

LEE HSIEN LOONG: Well, in China as a reality, if you go by de jure human rightsand ask if they have the same legal protections as you do in America with Mirandarule and the First Amendment, they dont.

But if you ask whether the real rights which they enjoy -- freedom of association,expression, information, movement, travel -- have improved tremendously comparedto where it was, I think the answer has to be in fact they enjoy de facto many rights.

Myanmar is a problem. They have a system. The government, the military is in

charge. The world has limited influence over them, and you cant change them shortof going there and providing a government, which the British did for a couple ofcenturies, but eventually they cant carry on.

So they have to move forward because I think many people in Myanmar know thatthis is not a solution for Myanmar. Many of the people know that the government isdoing badly by them and resent it deeply. I think many people know that this isleading nowhere and needs to change. I suspect that --

CHARLIE ROSE: How about many people in the military?

LEE HSIEN LOONG: Included.

CHARLIE ROSE: OK.


12/23

LEE HSIEN LOONG: But I suspect a few key people who make the decisions, theyhave decided that this is an existential thing for them. If theyre out, its not just thecountry and the government has changed, but where do I go and which jail will I be inand my children and my jewels and my billions?

So they are not likely to be persuaded by elections. You have to wait. I think there

will be a change over time as the generations change. And theyre holding electionsthis year. It may or may not be perfect, but its a step forward.

And if you look at Indonesia and President Suharto, he came to power in a coup,military-backed. But over 30 years he acquired legitimacy, he developed a kind ofideology to legitimize the rule. He had some kind of elections, he had some sort of apolitical process.

CHARLIE ROSE: But at the end of the day he was a dictator. He was in control.

LEE HSIEN LOONG: At the end of the day he did a lot of good for Indonesia, butunfortunately towards the end the rapacity became intolerable. And he didnt

deserve the end he came to.

CHARLIE ROSE: And if hed given up power?

LEE HSIEN LOONG: If he had given up power, even in the last election which hecontested, or better still the one before that, and there had been three, four years for anew government to settle in and grasp the reigns before the Asian crisis had come, Ithink Indonesia might not have gone through the traumatic time which is it did.

And Suharto would be remembered today as a great patriot.

CHARLIE ROSE: Korea -- what can be done about North Korea and nuclearweapons?

LEE HSIEN LOONG: Youve got the six party talks. Youve got to keep on talkingand engaging them. The saving grace is that you have -- I think the Chinese do notwant the North Koreans to have nuclear weapons.

CHARLIE ROSE: They already have them.

LEE HSIEN LOONG: They already have them, but the Chinese disapprove andthis is something the Koreans have to take into account. But again, for the regime,its an existential thing. So the regime is not going to give it up lightly.

CHARLIE ROSE: Because they think its the only way they can get any kind of

attention from the rest of the world?

LEE HSIEN LOONG: Yes. But also because this is the way they make surenobodys going to cause regime change in North Korea.

CHARLIE ROSE: Yes, right.

LEE HSIEN LOONG: Of course, regime change can come in other ways. But youhave to keep on talking to them and making sure, first that they do not destabilize theKorean peninsula, secondly, that they that they dont proliferate these nuclearweapons and cause problems elsewhere in the world.

And you cant have a final solution but you can do a certain number of things whichvisit punishment for behavior which is harmful to the global society.


13/23

CHARLIE ROSE: Tell me what your philosophy is for the relevance and the futureof Singapore.

LEE HSIEN LOONG: If we want to make a living for ourselves, weve got to beextraordinary. There are any number of cities with a million, two million people inthem, hundreds in Asia, hundreds more worldwide. Why is Singapore different? Its

because the people make it so, and the people, meaning our own people and thetalent we have within Singapore and the talent we can attract to Singapore and makemembers 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 cometo Singapore and strike roots, people who come and eventually become citizens.

CHARLIE ROSE: Is Singapores future as bright or brighter today than it was fiveyears ago?

LEE HSIEN LOONG: I would say so. I would say so. Over the last five years weveweathered SARS -- well, it was a bit longer than five years. Weve weathered thefinancial -- global financial crisis. Weve come through, bounced back. Weve justhad 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 were expecting seven percent to nine percent. Sowe are on a good platform not to cruise ahead but to build for the future. And this isa platform on which we can say now weve got the growth, lets get the transformationmoving.

CHARLIE ROSE: How did this happen?

LEE HSIEN LOONG: I think firstly we were lucky. The world picked up betterthan we expected. I think the American team, Paulson and Bernanke and Geithnerdid a good job, and we are beneficiaries.

Secondly, we had programs which we had launch which had are coming on streamnow, like that casinos and integrated resort, which is you mentioned. And they arecreating 20,000, 30,000 jobs for us. And its coming at a time just when the

economy is picking up and generating a tremendous amount of buzz and atremendous number of tourists and visitors are paying attention to Singapore andwriting 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 companiesviable. So the government, we had resources, so the government helped to bear theSocial Security expenses for workers. Companies worked with unions to keepworkers 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 toincrease production and go again. And so they are year we are booming again.


14/23

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 dowell. 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 inpublic housing so that people would have a home to own and to defend. We built upour 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 trustand is competent and can protect our interests in the international community. And

the people supported the government and worked with the government. And thatreservoir of trust is one of our most valuable and sustainable competitive advantages.

CHARLIE ROSE: The reservoir of trust?


CHARLIE ROSE: Your father said to me you have to stay relevant. You have tostay relevant to the world.


CHARLIE ROSE: There are people today when they talk about the Middle Eastspecifically theyll say this place could become the Singapore of the Middle East,meaning that if they concentrated, even if they dont have oil resources -- they saythis about the Palestinians, the Palestinians because of the human resources talentthere.

LEE HSIEN LOONG: Well, were happy to be a metaphor, but we remindourselves 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 dont have the right government, if you have thewrong 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 isin 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 ahuge debt problem?

LEE HSIEN LOONG: Exactly. Wed be just another broken-back country

permanently.


15/23

CHARLIE ROSE: So you cant afford to be -- have that kind of financial crisisbecause youre not sure --

LEE HSIEN LOONG: We cant afford to have --

CHARLIE ROSE: The IMF is not going to be there for you.

LEE HSIEN LOONG: We cant afford to have a disastrous bump in the night,whether its a financial crisis, whether its government misbehavior, whether its asecurity problem. But we only have one chance to make a go of it. You can fail -- youcan succeed in many battles. You fail once, its 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 seethe debt crisis in Greece.


CHARLIE ROSE: When you look at all the sovereign debt around the world, yourfather said to me the thing he worries most about is Americas debt.

LEE HSIEN LOONG: Yes. We all depend on America. You are the anchor for thewhole system. You are the way people AAA. I mean, if Triple-A is defaultable, whathappens --

CHARLIE ROSE: What do you believe in?

LEE HSIEN LOONG: Where do you go?

CHARLIE ROSE: So America has to get its economic house in order as a numberone priority for its leadership of the world?

LEE HSIEN LOONG: For the long term, you have to get your economy stable. Youhave a huge budget deficit. You have to do it because you needed to get out of thecrisis last year. But in the long term you have to balance your budget.

I was just talking to Alice Rivlin yesterday who was chairing the CongressionalBudget Committee, deficit committee, and she says its a very serious problem. Theseare political decisions. They have to put forward proposals --

CHARLIE ROSE: Do you think the American public has the political will andpolitical leaders have the political will to meet the crisis in the way that --

LEE HSIEN LOONG: Its never easy to close a budget deficit. But when George W.Bush became president he inherited a surplus from Bill Clinton.

CHARLIE ROSE: Yes.

LEE HSIEN LOONG: So you have been there before and it is possible to get backthere if theres a will and bipartisanship.

CHARLIE ROSE: Whats your opinion of a value-added tax?

LEE HSIEN LOONG: We have one. Whether you have one I would not comment.I think politically you have a lot of difficulty introducing it


16/23

CHARLIE ROSE: You also have a sovereign wealth fund.


CHARLIE ROSE: Its worth --

LEE HSIEN LOONG: Well, its not really a sovereign wealth fund. They havecompanies.

CHARLIE ROSE: I dont understand the model. What is it then?

LEE HSIEN LOONG: Youre 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 acommercial 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, andeach one is accountable to all of their shareholders.

CHARLIE ROSE: So its more like a kind of giant sovereign private equity firmexcept that its 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, youre asking me where Im going to putmy -- portfolio.

(LAUGHTER)

These are decisions I leave to the portfolio managers. Im not a portfolio manager.

CHARLIE ROSE: I know youre not, but youre the prime minister, and its ownedby the government. And you have a responsibility to the people of Singapore to makesure 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.


17/23

And my job is to provide them the political environment in which they can do theirjob without being by the political structure.

CHARLIE ROSE: Have you changed your philosophy about that since theeconomic 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 dont makemajor 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 governmentand by the results, how Singapore works and whether Singaporeans are able to have abetter life.

CHARLIE ROSE: Is it Jeffersonian democracy?

LEE HSIEN LOONG: I dont -- we dont measure ourselves by an American modelto how -- to what extent we approximate you. The countries which approximate youmost closely in Asia, probably the Philippines, operates very differently fromAmerican democracy.

So were not trying to approximate you. We are trying to find a formula which worksfor Singapore.

CHARLIE ROSE: Suppose -- you know, the president calls you in before you leaveand says, what we have to do is what? What does the United States have to do?

LEE HSIEN LOONG: Be engaged in the region. You have a lot of interests, a lot offriends, a lot of investments, and a lot of people who want you to be part of the regionand helping it to prosper in peace.

CHARLIE ROSE: And what mistakes do we have to watch out and make sure wedont make?

LEE HSIEN LOONG: Manage a good relationship with China but dont make thatyour own relationship in Asia.

CHARLIE ROSE: India, Singapore, Philippines.

LEE HSIEN LOONG: India, Southeast Asia, Japan.

CHARLIE ROSE: Japan? Where is Japan?

LEE HSIEN LOONG: Japan is in northeast Asia.

(LAUGHTER)

CHARLIE ROSE: But where is their economy? Why cant they get back on track?

LEE HSIEN LOONG: I think they have e a very serious demographic problem.The population is already shrinking, it has for several years. And its very -- aging isvery advanced, and theyve just changed to a new government which is still finding itsfooting.

CHARLIE ROSE: You have a demographic problem, too.


18/23

LEE HSIEN LOONG: I have one coming. Thats one of the reasons why weemphasize 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 cometo our country if you have a brood of kids?

LEE HSIEN LOONG: No. We have incentives for Singaporeans to have babies.

CHARLIE ROSE:Whats an incentive to have a baby? If they have babies, you givethem tax advantages?

LEE HSIEN LOONG: No, there is a cash bonus.

CHARLIE ROSE: Oh. So if youre is a Singapore citizen --

LEE HSIEN LOONG: Theres a cash bonus.

CHARLIE ROSE: Explain it to us.

LEE HSIEN LOONG: I cant remember the numbers now, but the first second andthird and fourth child you have $5,000 or $10,000 or $15,000. And if you co-payinto a savings account the government will match that for the child up to a certainamount.

Because the more well off people are, the more they feel the opportunity cost ofhaving a child is exorbitant, which is true, because if Im a lawyer its very expensiveto stay home and have a baby.

So heres a small gesture to help you defray your child care, your tuition, yourkindergarten, your school expenses. And its just a gesture to show that we recognizeyoure carrying a burden and youre helping us to generate the next generation.

CHARLIE ROSE: Your father is enormously respected around the globe. Youknow that, and you are his son. Your wife is important in Singapore as abusinessperson, correct?

LEE HSIEN LOONG: Shes -- Im not sure Id call her a businessperson. I think

shes an employee.

(LAUGHTER)

CHARLIE ROSE: Shes a businessperson. Shes known around the world as abusinessperson, correct?

LEE HSIEN LOONG: Shes an employee. You can call her what you want.

CHARLIE ROSE: All right, well, you seem to be sensitive -- you were -- to the issueof whats called nepotism.

LEE HSIEN LOONG:We are very sensitive.

CHARLIE ROSE: Tell me about the sensitivity.


19/23

LEE HSIEN LOONG: The whole of our system is founded on a basic concept ofmeritocracy. You are where you are because you are the best man for the job and notbecause 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 herthere and not because shes the best woman for the job, then my entire credibility andmoral authority is destroyed. Im not fit to be where I am.

And its a fundamental issue of fitness to govern. First you must have the moral right,then you can make the right decisions. Its 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 theres any doubt that this is so, and

people believe that Im there because my father fixed it or the whole system is justmake-believe, then the system will come down. Its not tenable.

If its true, it better be proven and I better be kicked out. If its not true, it better alsobe proven to be not true and the matter put to rest.

CHARLIE ROSE: So if some journalist writes about nepotism and you think itsnot 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 theypaid damages and apologized. They didnt go to court. They could have gone tocourt.

CHARLIE ROSE: I would consider that wining if they paid damages andapologized.

LEE HSIEN LOONG: All right.

CHARLIE ROSE: But you thought what was written in the "International HeraldTribune" 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.


20/23

CHARLIE ROSE: And youre saying we will not stand for that because it goes tothe essence of our moral authority to govern.

LEE HSIEN LOONG: Yes. In this case the same journalist and same newspaperhad 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 youwent back?


CHARLIE ROSE: Also, are you anxious to send a signal that you dont dare writeabout nepotism in Singapore because Singaporeans will sue you?

LEE HSIEN LOONG: No. The signal we want to send is if you want to make anallegation, make sure its true and be prepared to prove it.

We were prepared when we sued them to go into court, give evidence, enter thewitness box, and be cross-examined under oath. And they can bring the lawyer anddemolish 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?


CHARLIE ROSE: What did they say?

LEE HSIEN LOONG: Something similar.

CHARLIE ROSE: About nepotism?


CHARLIE ROSE: And so you went to them and they apologized and said, "Weresorry. We were wrong."


CHARLIE ROSE: Finally, whats the legacy of your dad, somebody I admire, as youknow, from many conversations he and I have had together.

LEE HSIEN LOONG: Well, he made a state where there was none, a country, anation which will become a nation which nobody believed could succeed. And hesmade 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 doesnt have time to worry about all these issues anymore.


21/23

CHARLIE ROSE: And whats the most important lesson he taught you?

LEE HSIEN LOONG: Never say die. However desperate the situation, if you thinkhard enough youll find a resource and youll find the way out of it.

CHARLIE ROSE: "Never say die." Never give up.


CHARLIE ROSE: Never forget the goal.

LEE HSIEN LOONG: And dont forget where you came from. It could all be verydifferent.

CHARLIE ROSE: And the world today -- are we in a good place? Are we movingout of this economic recovery? Are we accepting the new realities about where weare?

LEE HSIEN LOONG: You have to accept new realities.

CHARLIE ROSE: No choice.

LEE HSIEN LOONG: You have no choice. I think you have come out from thecrisis much better than we had any right to expect.

CHARLIE ROSE: "We," the United States?

LEE HSIEN LOONG: No, the whole world. I think lastly the United States,because you reacted more decisively and promptly than Europeans have done, forexample.

CHARLIE ROSE: Well, their potential growth rate suggests that, too.

LEE HSIEN LOONG: Well, there are other problems which lead them to bedifferent.

So we are in a much better position than we have a right to expect, but there are stillissues you have a-to-deal with. You have to figure out too-big-to-fail and things likethat. And there are other imbalances from the world which have to be managed likeyour imbalance with China.

CHARLIE ROSE: Right. How do you manage that?

LEE HSIEN LOONG: Part of it is change of policy and change of economicstructure in both countries.

CHARLIE ROSE: They should do more consuming and less savings, we should domore savings and less consuming.

LEE HSIEN LOONG: Thats to put it very simply. But its also a political thing toget people to understand that you can change the exchange rate but it wont solvemore deeper underlying problems which we have to address and recognize. Andthats very difficult, because the temptation when people get agitated andunemployment is 9.7 percent, you say its the Chinese fault, lets fix them.

CHARLIE ROSE: Or lets engage in protectionism.


22/23

LEE HSIEN LOONG: Youd never say that, of course. Lets make sure that we lookafter American jobs.

CHARLIE ROSE: You look up to Singapore jobs, dont you?

LEE HSIEN LOONG: Well, we do it in a way which must be sustainable, which is

that you have to be globally competitive, otherwise youre out of work, because I cantmake things selling to myself. I have to make things selling to the world.

CHARLIE ROSE: But thats exactly what the Chinese are trying to do. Theyretrying to make things to their own billion three, and if they can create an internaldemand, there will be a better place. Thats their opinion.

LEE HSIEN LOONG: I think they are selling to America. Theyre selling to China,the world.

CHARLIE ROSE: But they want to create a demand internally.

LEE HSIEN LOONG: They need to create demand internally. Some of it can beconsumption, some of it can be investment, some of it can be environmental, to cleanup the environment. There are many ways to do this.

CHARLIE ROSE: Do we need a new international structure of any kind, a newBretton Woods, a new reserve currency, a new United Nations, a new ASEAN,whatever?

LEE HSIEN LOONG: Ideally we would redesign humankind.

(LAUGHTER)

So weve got IMF, the World Bank, the U.N. Security Council.

CHARLIE ROSE: So thats enough.

LEE HSIEN LOONG: And we will work on that and improvise and improve.Youve got the G-20 emerge after the financial crisis. Theres a useful grouping, andIm sure over time more such groupings will emerge.

CHARLIE ROSE: And the idea of G-2 is simply --

LEE HSIEN LOONG: I think thats an extrapolation beyond the facts. We are notthere and the Chinese know that.

CHARLIE ROSE: They are not there?

CHARLIE ROSE: They are not there.

CHARLIE ROSE: And dont want to be there right now?

LEE HSIEN LOONG: I think they would feel much more comfortable to be in aless exposed position.

CHARLIE ROSE: This has been a wonderful conversation from our standpoint.Thank you for being candid. Thank you for coming here. Its a pleasure to see youagain.

LEE HSIEN LOONG: Thank you very much.


23/23

charlie rose interview with lee hsien long

Documents