Lee Kuan Yew

Lee Kuan Yew’s name has been synonymous with the development of Singapore for more than 40 years, first as an independence leader, then as prime minister and, since 1990, as senior minister, a powerful Cabinet post created just for him.

Now 76, Lee remains the unofficial kingmaker in his city-state of 3 million citizens and one of Southeast Asia’s most influential voices, an elder statesman whose advice is sought by governments as diverse as those in communist Vietnam and capitalist, newly democratic Indonesia. Though Lee has his critics, among them human-rights activists and proponents of democratization, no one disputes that his singular vision for Singapore has created one of the region’s great success stories: A prosperous, educated, stable, orderly, modern country that has capitalized on its human resources to become a global financial and commercial hub.

Lee has a fierce temper, pursues few pleasures except golf and maintained tight control over his people and the media as prime minister. His belief that individual liberties are less important than the welfare of society as a whole often put him at odds with human-rights activists--for example, he was widely criticized in 1983 for adopting a “graduate mothers’ program” in which women with graduate degrees were paid to have children to improve the gene pool.

But Lee insists that the basis of Singapore’s success is “Asian values,” the notion that there is something inherent in Asians, particularly ethnic Chinese, that makes them industrious, family-oriented, disciplined and destined to achieve. (Ethnic Chinese are 76% of Singapore’s population.) While Asian economies boomed, the merits of Asian values gained credibility and Lee’s generation remained firm in its belief that most people were willing to forego a large degree of Western-style democracy in favor of economic opportunity and political stability.

But the past two years have been difficult for Southeast Asia and, to a lesser extent, Singapore. An economic crisis that began with the collapse of the Thai baht in July 1997 unleashed shock waves. Decades of stunning development came to a grinding halt, governments grappled with popular demands for more transparency and freedom, threats of political instability challenged the ruling elite from Indonesia to Cambodia.

Yet, the crisis did not shake Lee’s confidence in the region’s economic future or his belief that East and West have different values and the West can not judge Asia by its standards. He asserts that Western democracies are far too liberal, and he has zero tolerance for what he considers the symptoms of moral decay, such as drugs, pornography, crime and an ill-disciplined citizenry. Singapore’s use of capital punishment is, on a per-capita basis, among the highest in the world.

Educated as an attorney in England, Lee formed an alliance with the communists in the 1950s to fight for Singapore’s independence. Once it was won, he crushed the communists to pursue a capitalist, pro-Western agenda reliant on foreign investment. Lee resigned as prime minister in 1990, in favor of his handpicked successor, Goh Chok Tong, who is, in turn, expected to step aside one day for Lee’s son, Lee Hsien Loong, a retired brigadier general and currently deputy prime minister.

Question: It wasn’t too long ago that people were talking of the 21st century as the Asian century. Has the economic crisis dashed the likelihood of that happening?

Answer: No, I don’t think so. I think the crisis is a blip on a long-term trend. When you talk about the next century, we are really talking about the mass in East Asia, the mass in China and Japan and Korea, then in ASEAN [Assn. of Southeast Asian Nations]. That’s the order in which technology and industrial growth and just sheer weight of numbers will come. The trend is quite clear, because of the sheer numbers and human resources involved. Just look at the percentage of population that they turn out as engineers and scientists. If you extrapolate that to 50 years, they’ll have all the managers, the accountants, the fund managers, the foreign exchange dealers and so on.

Q: Economies are now improving throughout the region. Is the recovery part of a natural economic cycle or have fundamental reforms been put in place?

A: I’m not sure that fundamental reforms have been completed. Reform is probably halfway through in [South] Korea, though they haven’t broken off their chaebols [powerful conglomerates] yet; about one-third through in Thailand; it’s barely started in Indonesia. I attribute the recovery to the return of money, investments, liquidity that has buoyed up the stock markets. Fund managers decided the markets were too low compared to other stock markets, and they’ve come back in and that’s buoyed up property prices, consumer confidence and economy restarts. But if governments don’t go through with the fundamental reforms, the restructuring, they lend themselves to damage in the next crisis.

Q: The International Monetary Fund has come in for a lot of criticism because of its harsh reforms. Did its remedies exasperate or ameliorate the problem?

A: I wouldn’t go far in IMF bashing because I think they came in with good intentions and did their best. The problems arose because they came in with experience gained in Latin American and Eastern Europe. But in Latin America you had profligate governments which were running deficits and inflation and borrowing recklessly. In East Asia, the governments were frugal and ran budget surpluses, like the Thais. Inflation was low and numbers were good. Growth was strong. It was the private sector which had over-borrowed and invested unwisely in surplus capacity, like industrial plants, cement, electricity, power plants, condominiums and office blocks. In retrospect, I tend to agree that less prosperity and more liquidity would have avoided the sharp recession that was brought about.

Q: Prime Minister Mahathir Mohamad of Malaysia says the West, through institutions such as the IMF, is out to recolonize Asia, this time economically. Does the comment merit debate?

A: Dr. Mahathir is a very colorful articulator of ideas, strong ideas. I have a different point of view. I don’t think they’re out to recolonize Asia because they don’t have the capabilities to do so. One of the results of the IMF policies, which Dr. Mahathir particularly opposed, was the selling away of valuable assets or family heirlooms, state heirlooms, at fire-sale prices because they were bankrupt and needed to be bailed out. There is some ground for bitterness at the unfairness of the system, that people with surplus cash from America and Europe could come along and pick up banks and big corporations. But there are risks involved [for the buyers] and I’m quite sure that the Koreans are not going to sell off their bits and pieces of the chaebols at knockdown prices. In fact, very few have been sold.

Q: What went wrong in Vietnam? Five years ago people were saying Vietnam would be the next economic tiger. But not much seems to be happening. Has Vietnam been too cautious in making a commitment to a free-market economy?

A: I fear we’ll have to wait, or rather Vietnam will have to wait, for a change in generations. The present leaders developed an expertise in fighting an overpowering enemy by guerrilla tactics. In other words, let their men ambush the enemy, harass them and wear them down, and they win. But to rebuild the economy, or to build a new one, is more difficult and requires an understanding of the modern world.

During my first visit to Vietnam, in 1992, I suggested to Nguyen Van Linh, the party secretary, that for people like me to come and advise him was useful for brainstorming. But the people he really needed to get are the Vietnamese who have made good in America, in Europe and Australia, because they understand Vietnam, they have an interest--their families are still in there, probably in the South--and they will bring back a knowledge and a network of connections. But Vietnam never did that because, I guess, they fear that with the return of such people will come dangerous ideas and maybe dangerous connections with intelligence agencies.

Q: Does China’s growing influence, economically and military, concern you?

A: It’d be silly not to take note of that trend and weigh the consequences. I think China will inevitably demand a greater voice in the way things are, in the dispensation of the region, and that’s a fact we’ll have to live with. We are hoping that by joining institutions like the WTO [World Trade Organization] and taking part in the ASEAN Regional Forum to discuss security and other matters, China will develop a certain acceptance of present rules and present conventions, and that will make the adjustment process less awkward.

Q: Will ties between the United States and China be the defining 21st-century relationship in the Asia-Pacific region?

A: Absolutely. I think with the U.S. and Japan on one side and China on the other, a balance must be struck to allow stability and growth to take place. If there is constant stress and imbalance, it will not be good for growth.

Q: How important is a stable Indonesia to the stability of the whole region?

A: Indonesia was a great stabilizer and encouraged investments throughout the region because President Suharto concentrated on economic development and that created the climate of confidence for the whole region. Of course, we had our fears of the dangers of a communist thrust into the region from Vietnam, so that acted as a unifying force. As long as the bulk of Indonesia where the population is, in Java, is able to grow and be stable, then I think it will be OK. But if Java becomes unstable and can’t grow, then you have an outflow of people, and that’s destabilizing.

Q: You’ve favored gradual changes in Singapore. In Indonesia, democracy came virtually overnight. Did it come too fast?

A: It would have been a different domino if the IMF had not been forced by attitudes of the U.S. Congress, which insisted that Suharto not just change the economy, but change his way of governing. That brought about the collision and ended in his collapse. If they had just allowed change to evolve naturally, he would have carried on, the loosening up would have taken maybe 10 years, and there wouldn’t have been this sudden rupture with a tremendous drop in property values and bankrupt companies. The private sector in Indonesia borrowed $80 billion, but the damage to the economy is more than $500 billion. It’s really quite disproportionate.

Q: Many analysts believe ASEAN has lost its clout and its relevance. What role will it have in the 21st century?

A: Well, for the time being, it’s lost its weight, because the economies are down and the leaders are diminished as a result. But the logic of putting together and getting a stronger voice as a result of being together remains. The economies will recover. New leaders will emerge and will restore their countries’ standing and establish their own personal reputation, and they will move forward. Countries like Thailand have lost five to 10 years [in the development process] but they will recover.

Q: Singapore was hurt far less than its neighbors by the economic crisis. What was different here?

A: From a Singaporean point of view, why should we have been hurt at all? We did nothing wrong. We didn’t borrow anybody’s money. We were running a tight ship. We had a budget surplus, low inflation, a strong currency, strong reserves. But our markets went down when regional economies busted, and we were set back. We did not panic. We did not blame anybody. We don’t think anybody was to blame. It just happened, and we had a rational response to unexpected developments. That was noticed by the markets and confidence returned.

Q: In your memoirs, writing of the time when you were a young socialist itching for independence, you were dismissive of Singapore’s “enfeebled press.” Isn’t there some irony in that observation today because Singapore doesn’t exactly have a robust, outspoken press?

A: Well, that’s because we [the government] are prepared to take them [the local press] on robustly. If they take us on, we take them on. We demand that they and the foreign press submit themselves to the right of reply. And when we have the right of reply, journalists have to think twice before they put a barb under the poisoned tip [pen] because we can return the barb. That’s the way we run it. We were brought up in a pretty tough school, and if we didn’t remain tough, we’d be rolled over.

Q: Singapore’s transformation to an economy based on information and technology will take creativity. But Singapore is a fairly rigid society with a lot of controls. Doesn’t that stifle creativity?

A: That’s a stereotyped view. I have a different one. A creative mind is a creative mind, whatever you do with it. I mean, if a chap has got it and wants to write a novel, a great novel, he will write it. But I’m not saying we shouldn’t loosen up and try to get lateral thinking and a spontaneous fashion of ideas that may spark something profitable.

Q: Do you see Asia moving toward a society in which democracy and human rights are more in sync with the way they are understood in the West? Or are the West and the East always going to interpret democracy and human rights in different ways?

A: What I see as an inevitable trend because of satellite technology, because of people having instantaneous access to the same event throughout the world, is a certain convergence in what is not acceptable, whether it’s Kosovo or East Timor. I mean, what the Serbs did in Kosovo was just wrong. No one tried to defend it. The same in East Timor. So that convergence will come about and it will not be Western-defined human rights or Eastern-defined. It will be a universal standard. But democracy will vary with the circumstances, education, standard of living, the acuteness of political and other problems. *