Investor confidence 'key to keeping Singapore miracle alive': Lee Kuan Yew at Standard Chartered Singapore Forum

Mr Lee says nation must continue to have strong institutions, sound policies

By Robin Chan, The Straits Times, 21 Mar 2013

THE key to keeping the Singapore miracle alive is retaining investors' confidence, said former prime minister Lee Kuan Yew at a business forum yesterday.

To do so, Singapore must continue to have strong institutions, sound government policies and an open trading environment, he said. He also believes that Singapore will continue to play a leading role in South-east Asia for some time to come.

Mr Lee, 89, attending his first speaking engagement since he was hospitalised last month for an irregular heartbeat, addressed an audience of some 600 business professionals at the Standard Chartered Singapore Forum.

He shared his views on population, economic growth and global affairs for over an hour.

He was joined onstage at the Shangri-La Hotel ballroom by his long-time friend and former United States Federal Reserve chairman Paul Volcker, and Standard Chartered group chief executive Peter Sands.

Dr Volcker noted that Singapore had transformed its economy several times "with amazing smoothness", but wondered if "this miracle will continue".

Mr Lee replied that it will depend on whether those with money continue to have confidence in Singapore's institutions.

"That's why they are here. It would be very stupid of us to shake that confidence," he said.

But he warned that Shanghai would pose a real challenge to Singapore when China finally opens up its capital market, though that is still in the distant future.

"I don't think that will happen for some time, because they don't want to open themselves up to the vagaries of the market place," he said.

Closer to home, Mr Lee is confident that no country in the region will catch up with Singapore any time soon.

"If you look at their per capita GDP, they've got a long way to go," he said.

"We have got institutions, we have rule of law, and not the vagaries of change with every ruler. So I don't see any capital in Asean... displacing Singapore."

Mr Lee also touched on the controversial topic of immigration and population that has generated much heated debate in Singapore.

He said a nation cannot survive with a declining population.

"You must have young people to be able to drive the economy. Young people buy the products, all the latest gadgets, fine dining. If you don't have that, and you refuse migrants as the Japanese do, you will just dissolve into nothingness."

In that same vein, China's one- child policy is risking its future, he said.

This is because there is an ageing population, where the reproductive rate is just 1.2 in the cities, below the replacement level of 2.1.

"We are in the same position," he said of Singapore. "But we take in migrants, so we make up the numbers."

Dr Volcker also noted that in Japan, which has experienced two decades of slow economic growth, "there is a certain lack of energy in society related to the failure to grow".

He added that immigration, while a hugely controversial issue in the US, has given an "element of vitality" to the US economy.

Since being hospitalised on Feb 15 after a suspected episode of a transient ischaemic attack, a medical condition in which blood flow to a part of the brain stops briefly, Mr Lee has appeared in public a couple of times.

He attended a Chinese New Year party for grassroots leaders at the Istana, and a Parliament sitting during the recent Budget debate.

Ms Teh Siew Fong, chief financial officer at Raffles Quay Asset Management, who attended yesterday's forum, said she was happy to see him.

Mr Simon Ng, Pan Asia deputy chief investment officer at AXA Investment Managers Asia, said: "Although you can hear that age is catching up with him, he provides very good insights into Asia, and how changes in Asia will impact Singapore and what Singapore can bring to the table."

Keep Singapore’s doors open to quality immigrants: LKY
Former Minister Mentor says they add to talent pool, help boost economy
By Eugene Neubronner, TODAY, 21 Mar 2013

Noting the demographic challenges faced by China and Japan, former Minister Mentor Lee Kuan Yew yesterday reiterated the need to keep the Republic’s doors open to “quality” immigrants.

Besides helping make up the numbers amid the low birth rates, Singapore’s approach of exercising “quality control” among immigrants — resulting in an enlarged talent pool —would also ensure it stays ahead of emerging economies in South-east Asia, Mr Lee said. In comparison, Japan would become “a nation reduced to nothingness”, as Mr Lee put it, if it continued to be averse to immigration.

He said: “I see a nation reduced to half in 20 years, and if it still continues with the same policy, reduced to a further half, and eventually, it is all over.”

Mr Lee added: “To have a nation, you must have people and you must have young people to be able to drive the economy and young people buy the products ... and if you don’t have that, and you refuse migrants, as the Japanese do, you will just dissolve into nothingness. I think before that comes, they may change (their) policy,” he said.

Speaking at Standard Chartered’s Singapore Forum Fireside Chat yesterday, Mr Lee was responding to a question about how concerned countries like Japan should be about an ageing population.

China, too, is “risking its future” if it carries on with its one-child policy, he said. “Property prices will go down, assets will go down. There is no younger generation to put the pressure up, so I think it is heading towards the wrong direction,” said Mr Lee.

Apart from Mr Lee, the dialogue included former United States Federal Reserve Chairman Paul Volcker and StanChart Group Chief Executive Peter Sands. Mr Volcker noted that the world “cannot continue to grow” indefinitely, and would have to resign to “being like Japan” eventually.

When asked about Singapore’s success and whether it can continue to thrive, Mr Lee said that for the Republic to remain successful, it needs to “retain the confidence” of investors and the people in the Government’s policies and institutions.

“It will be very stupid of us to shake that confidence. The confidence rests on several pillars: Institutions, sound policies by the Government and an open trading area,” said Mr Lee.

Singapore has had the chance to build up its institutions and rule of law, which requires “stable governments” that do not change policies when the next ruler shows up, he added.

Saying he was not worried about emerging economies in South-east Asia surpassing Singapore, Mr Lee said he was confident the Republic would stay ahead “for the next 20 years”. Reiterating Singapore’s advantage of having “quality” immigrants, he said: “They will make progress, but if you look at the per capita they have got, the differences are so wide. We have the advantage of quality control of the people who come in ... so the increase in population means an increase in talent.”

In particular, Singapore will continue to be strong in the financial sector, Mr Lee said, as there was “no real alternative”. “(Other countries) do not have the institutions, the confidence or the people with the money,” he said.

On a broader front, Mr Lee said he would not take continued growth in Asia for granted, a sentiment shared by Mr Volcker. He also noted how some countries in the region did not work by the rule of law but by an individual. “When the individual changes, the system changes,” he said.

Lee Kuan Yew on India-China relations
20 March, 2013

Former Prime Minister and Minister Mentor Lee Kuan Yew shared his insights on India-China relations at the Standard Chartered Singapore Forum.