Sunday 7 July 2013

Singapore must get politics right: PM Lee Hsien Loong at DBS Asia Leadership Dialogue 5 July 2013

Only then can country address critical challenges and stay ahead
By Robin Chan, The Straits Times, 6 Jul 2013

SINGAPORE has to get its politics right if it is to maintain its economic edge, Prime Minister Lee Hsien Loong said yesterday at a forum.

"If your politics is wrong, your economics is bound to go wrong. And the reason why so many countries cannot get their economics right is because their politics don't work," he observed.

"I think we have got to be able to get the fundamentals right. And so far, we have been able to do so," he added.

And as long as its politics stays that way, Singapore can continue to have policies that are fair and benefit the broad majority.

He indicated that having the right kind of politics, where political parties work to solve the country's problems rather than battle each other, is indeed a competitive advantage for the city state.

Addressing a 600-strong audience at the DBS Insights Asia Conference at Sands Expo and Convention Centre, PM Lee warned that vested interests or a divided society could hinder a government from doing "sensible things", like educating people, improving infrastructure and building a first-class environment.

He cited Singapore's Marina Bay as an example of what could be achieved when a country's politics was on the right track, allowing it to pull together a project with many different pieces to create something that was one of a kind.

"I think there's only one Marina Bay in the world," he said.

The right kind of politics is also necessary to attract good people into government, he said, adding that he would advise whoever governs Singapore in the future to "try very hard to keep the politics clean and straight, and to bring in people who can make a difference to the country".

While tackling questions on a range of issues including income inequality, Mr Lee signalled clearly that Singapore remained open to foreigners and to helping its own citizens by equipping them with the skills they need to help themselves.

Indeed, if he could persuade another 10 billionaires to move to Singapore, he would, even if that led to higher income inequality "because they will bring business, they will bring opportunities, they will open new doors, they will create new jobs".

Drawing lessons from the experience of Latin American countries, he also stressed that slower economic growth did not make for a more equal society, pointing out that several of these countries had both slow growth and some of the highest inequality in the world.

Singapore's approach is to equip people with skills so that they can be competitive, build up infrastructure so that people are attracted to live and work here, and have policies to lift up the less successful, he said.

At the same time, he did not shy away from admitting that his Government had made some mistakes in the past, joking - when asked what he would have done differently - that he would have certainly arranged for more trains earlier, in a reference to the strain on transport infrastructure that has caused immense public unhappiness.

He held up Singapore's "specialness" as something it must strive to maintain.

He said: "Singapore, today, for all our difficulties, I think internationally we stand high. Can we keep that? Because that makes a big difference to Singaporeans, not just to how we feel but really to our lives. That's a big challenge."


Well, it starts with politics, because if your politics is wrong, your economics is bound to go wrong. And the reason why so many countries cannot get the economics right is because the politics don't work...

We've got to be able to get the fundamentals right... then you can do many sensible things.

You can educate people well.

You can get your infrastructure upgraded. You can get your environment first class.

And if you go out from the conference room you can see around you, well, that is Singapore: Gardens by the Bay, the Marina financial centre, people working, a beautiful living environment. And I think you may be able to do pieces of it in other cities. But to put it all together and make one Marina Bay? I think there's only one Marina Bay in the world.

- PM Lee to an audience at the Sands Expo and Convention Centre, on how having the right politics has allowed Singapore to build a first-class environment

Q&A: PM on looking back and looking ahead
If you had an opportunity to rewind and do three things differently, what would they be?
Well, I think it's difficult to look back and ask what would you have done differently. I think certainly I would have built a lot more trains earlier. That's easy to say now.

But what we should also have done earlier was to realise how quickly the world was going to change on us and to get our people psychologically prepared for that; to know that the old model is not going to work, that you're going to have to earn your living in a much more challenging environment, and so we better understand what's happening in the world around us.
What are the three things that keep you up at night?
What can go wrong for Singapore, if you look at it in the long term, is you can lose the specialness of this place.

A place where people look at it and say, "Wow, the economy prospers, the housing scheme is something special, the city is something special, the education system is world-class, even health care, low spending, good outcomes. Let's go and see what's happening there".

In 20 years' time, if people are not interested in Singapore and we are not up there in terms of the quality of our services, our living environment, the kind of country we are... I think we're in big trouble.

We are today exceptional. And if you are not exceptional, you're ordinary, I think you're in big trouble. And it can easily happen because you've seen countries which have prospered, which looked very promising - 50 years ago, Sri Lanka looked very promising, Myanmar looked very promising - today I think both are struggling.

Singapore today, for all our difficulties, internationally we stand high. Can we keep that because that makes a big difference to Singaporeans, not just to how you feel, but really to our lives. And I think that is a big challenge.
How confident are you that Asean will resolve the haze issue?
I have no doubt that there will be a spirit of cooperation, but I think solving the haze issue will take a very long time.

I think the Indonesian government would wish that the problem could be solved, because it would save them a lot of international awkwardness.

But I don't think that it's easy for them to do it. It's a big country; you're talking about thousands of square kilometres of land being cleared illegally - some by companies perhaps, and you can catch them and punish them; some by farmers, harder to catch.

That's a problem that's going to continue although I have no doubt that, if there are active efforts made, you can make it less and you can make things better.
What is the one piece of advice your father has given you that has served you well?
Well, when Goh Chok Tong asked me to go into politics, he said, "Well, if you want to, go do it".

He didn't stop me. And well, I have to make the best of what I do. I think that's the right thing for a father to do. The son has to take his own way and make his own path forward.

Singapore 'should play to its strengths in global finance'
Republic has honed expertise in many areas of finance, says PM Lee
By Aaron Low, The Straits Times, 6 Jul 2013

SINGAPORE is unlikely to overtake Switzerland as the biggest wealth centre in the world any time soon but it should strive to play to its strengths in the world of global finance, said Prime Minister Lee Hsien Loong.

Assessing Singapore's future as a financial hub, Mr Lee said yesterday that Singapore is focusing on a number of growth areas, not just in wealth management.

He noted that over the years, the Republic has steadily honed its expertise in many areas of finance, including fixed income, capital markets, foreign exchange and investment banking.

More recently, Singapore has successfully built its reputation as a wealth management centre.

A report by PricewaterhouseCoopers released earlier this week said that Singapore could overtake Switzerland, currently with US$2 trillion (S$2.6 trillion) in assets, as the top wealth centre in the world by 2015. Singapore was ranked as the second-biggest wealth centre.

Mr Lee said in a dialogue with DBS chief executive officer Piyush Gupta that although Singapore has about $1 trillion in assets under management, the Republic is unlikely to take top spot.

"I don't think that's true. I don't want that to be my marketing line," he said at the DBS Asian Insights conference yesterday.

"We are quite happy to continue our way quietly in the world."

Mr Lee highlighted the unique strengths that Singapore can leverage to continue building its reputation as a global financial hub.

With its robust regulatory system, it will be in a good position to remain a key financial centre amid sweeping regulatory changes introduced globally in recent years to curb problems like tax evasion.

"We are a financial centre, not quite like New York, neither are we like Cayman Islands. We are a reputable jurisdiction, and we play according to global rules," said Mr Lee.

He also added that Singapore has been focusing on other areas of growth such as becoming an offshore Chinese yuan centre. Singapore joined Hong Kong, Taiwan and Macau in having a yuan clearing bank in February.

As the region's economies continue to grow, banks will also want to base their operations out of Singapore, he noted.

Mr Gupta asked Mr Lee if he was confident that the Asean Economic Community, a move to create stronger regional economic integration, will be achieved by 2015. Mr Lee said major progress has been made in areas like free trade agreements, but not "every piece will fall into place" on time.

As to whether the United States should continue to balance China in the region, Mr Lee said that the US will always have an important role to play.

"We've always believed that the US has an important and constructive role in the region, balancing China but also participating, cooperating with China in a constructive relationship," he said. "And it's not a zero sum game."

Getting the politics right
Editorial, The Straits Times, 11 Jul 2013

PRIME Minister Lee Hsien Loong's recent call to Singaporeans to get the politics right, in order to maintain the country's economic edge, might appear to be an instance of special pleading. But that impression would be a false one because he was not speaking about the longevity of the ruling party but about the sustainability of Singapore's specialness. This specialness - the commitment, the ability and the drive to plan for the future to stay ahead of the competition - has placed the city-state in the per-capita GDP league of the advanced economies, although it is but a fraction of their geographic size and population. The specialness is based on a certain way of organising political and social contestation, notably the preference for broadly consensual politics over divisive adversarial politicking, and focusing on long-term policies that might entail some short-term pain.

It is these fundamentals to which Singapore must be true, no matter which party is in power. Its domestic politics must advance always a key national imperative, which is to find new ways of being relevant to the global economy. In assessing the worthiness of the different political choices vying for their attention, it is necessary for Singaporeans to cast a discerning look at the policies on offer and consider them as a package. Popular policies are equitable and viable, whereas populist policies tend to favour one segment of the population over others, are a drain on the economy, and are rarely sustainable over time. Popular policies prepare the population, particularly the young, for the future through education, good infrastructure, and a pro-business culture in which labour rights are respected as well. Such policies are critical in a country with almost no natural resources. Populist policies seek to protect citizens from economic and technological change, an attempt almost always futile in the long run.

Political expectations in Singapore are growing in an economic environment marked by increasing diversity. Naturally, demands made on the state's financial resources will diverge, in contrast to the time when Singapore society was more economically homogenous. More complex trade-offs will have to be made between legitimate interests, such as those of the elderly poor and the young in education. Reconciling legitimate but divergent interests through consultation is the real art of politics. It will be impossible to take up every suggestion thrown up in such consultation exercises. But this should not deter the genuinely concerned from engaging. What Singapore must avoid, however, is a situation in which Government gives in to pressure from lobby groups that are able to organise themselves the best and shout the loudest.

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