Moderator: Prime Minister, thank you so much. We are honoured to have you here. Thank you for fitting in us into a very tight schedule here today in Mexico City. Let me start with, as we were discussing before we entered the room, with a very brief backdrop to what we will be talking about, which is essentially geopolitics. Even though the audience, I am sure, is well versed on the Singapore story, we would love to hear from you, in a nutshell, how you explain the transition of Singapore. Now I give a couple of facts here before you start. 50 years ago Singapore was facing a very painful separation from Malaysia, poverty, ethnic strife, religious divides, and scarce national resources, including the big issue in terms of water. Fast forward just one generation later and you are the most amazing showcase of the kind of future we all in this room crave for. You have the most competitive, inclusive, transparent, and open economy in the world, the most tech-ready, with the 3rd highest GDP per capita. So again in a nutshell, for the sake of feeding the envy in this room, can you tell us what happened? Which were the lynchpins for this process? PM Lee: Well I hesitate to tell you how we
succeeded, but I'll tell you what we did. First, we started off on the assumption that nobody owed us a living. We had to fight our way in the world. New country, no resources — well you have to depend on your wits and your abilities. Secondly, we invested in our people, because we do not have copper, we do not have oil and gas, there is no petroleum company of Singapore. What we have are Singaporeans. We invest in them, educate them, train them, make them hardworking, make them work together, make them be productive, proud of themselves, and able to deliver results together. And I think our education system has made a lot of difference on that. Thirdly, we depended on growing the
economy. It was a time when people believed in import substitution and state-led economic planning. We decided that the free market had a lot
to commend it, that multinationals had a lot to contribute, in terms of creating jobs, in terms of bringing in technology, in terms of giving us markets. And if they are going to be said to be exploiting us, we are ready to be exploited. We brought them in, they came, they found us good workers, a good place, a government which was supportive and they helped us to make the economic takeoff, 10% growth per year for a couple of decades, and 8% and then 6%. And so we went from third world to first. I would also add that having created the growth, we put a lot of emphasis on making sure the growth benefited Singaporeans across a wide range, that everybody had a share in this, in terms of good education, in terms of good healthcare in terms of housing. One of our major social programmes is a homeownership programme where 85% of Singaporeans own flats which are built by the government, Housing Development Board flats. So people felt that this was their country and their success and they benefited from it. and so we got on to a virtuous cycle. But I should also say that we were lucky because in the last 50 years we have not had a major war. We have been at peace with our neighbours. We have had war in Southeast Asia, in Vietnam particularly, and in Indochina, but the position was stabilised after the Vietnam War ended and the other non-communist countries in Southeast Asia, including Singapore, we were able to concentrate on economic development and building prosperity, and not on conflict. That has helped to bring us here, and we cannot be sure that the next 50 years, we will be as lucky. Moderator: This transition gets a lot of credit for shifting the center of gravity of power in the world, economic and political in the world. You have been clearly a driving force, among others, but a clear driving force behind this process. Today it is clear from an economic standpoint that we are in the Asian century. What about from a political standpoint? How do you see the coherence among the Asian reality in general, small countries and large? How is that evolving? Can we truly think of an Eastern bloc as we move forward? PM Lee: I would not say that Singapore caused the centre of gravity of the world to change! We are far too small! At the time we became independent, we had maybe one and a half, less than two million people now we have about five and a half million, including foreign workers and immigrants. So we are too small to shift the world.
What really shifted the world is China. When they decided to open up, Deng Xiaoping in 1978 embarked on reform and opening-up and their economy took off dramatically, that transformed the global strategic landscape, and fortunately for us in the process, the other Asian countries were able to benefit from China's opportunities, from China's growing prosperity, from the markets which were there, and we prospered with them. I think that Asia is a diverse environment. We all are looking to prosper in our different ways. We hope that we all have a good region within which to to live and to cooperate with one another, but our politics in the different countries are very different, and we have to understand the diversity. China is very different from India, for example. China is very different from Singapore, sometimes people do not understand that, because many of us are ethnic Chinese, meaning we have got China ancestors but we have become Singaporeans. So we look similar but we are not the same, and that is crucial, because the similarity enables us to to work with them and to perhaps understand them mutually somewhat better than Westerner would. On the other hand, the fact that we are different means that we have adapted to our place in the world and we add value when we do business with the Chinese because we bring a different perspective to them which they find difficult to duplicate themselves. We have operated a Western system, we have the Western rule of law, we have done business western-style. The links are there from Singapore to countries all over the world, the Americas, Europe, Japan, Australia, New Zealand, and therefore we make a living for ourselves. If you look at the 21st Century, people used to say is the Asian Century, I think the Asian economy will grow as a percentage of the global economy, because China is still growing faster than the developed countries and can for a while more. India also is growing somewhat faster than developing countries, and potentially could grow even faster, but their politics is more complicated. So I think the centre of mass will continue to shift, but I do not believe that Asia will be the centre of the world, because in order to prosper, Asia needs markets, needs cooperation, needs technology with the Americas, with the Europeans, with other regions. If it closes in on itself, and we just say this is the Asian region, we are doing business with ourselves in Asia, well, you will not starve but I think that you will miss out on many opportunities and we will be the poorer for it and so will be the world. Moderator: Not to contradict your very down-to-earth modesty but Deng Xiaoping did inspire his reforms on Singapore. PM Lee: No, no, he used us as his poster boy. He had his ideas what wanted to be done, and he used us because we were a society which was majority Chinese, and the unspoken message was if that Chinese society, sons of labourers can do it, we in China, with our 5,000 years of history, and the scholars and the literati, and all the wealth of culture and civilisation, we can do it too, which was to a large extent true. Moderator: Be that that this is the Asian century or not, what do we call this shift, it is a real shift, and Asia is having more of a preeminent role as we speak. How does Mexico, in your mind, and Latin America fit in that shift? PM Lee: It is a very important part of our worldview because as I explained to you, we do not want a world in which the Asian countries look only to other Asian countries. We have a lot of business with China, we have a lot of business with India, but we have previously had, and still have a lot of business with the United States, and a substantial amount with Central American and Latin American countries. In Central America, with Mexico; in Latin America, with Brazil and other countries. That is important not just quantitatively, but also in terms of how it shapes our world view, that we see opportunities around the world, that we want to do business with other advanced economies which have a lot to offer, and we believe that in Asia Pacific on both sides of the Pacific Ocean, you may be 16,000 km apart but there are opportunities for us to cooperate and to prosper together. I think you see the same on the eastern side of the Pacific. For Mexico, America looms very large, about 85% of your exports, some vast amount. And yet you do not really want America to be the only partner you have. I think you have growing trade with Asia, certainly with China, and I hope not only with China, but with other countries as well in Asia. There are investment opportunities in Asia for your companies, there are investment opportunities here in Mexico for Asian companies. I have brought a business delegation along with me, I hope they will meet their counterparts and some sparks will catch fire, and we will have some good projects come from that. If we are looking for a world which is multiply interconnected, not just small country connected to nearest buy big country, then links across the Pacific make a lot of sense. Moderator: A logical follow-up to that would be the US-China rift. Your thoughts? PM Lee: We are very worried about that. We can understand that is not an easy adjustment to make. For the Chinese to become a big economy, dramatically greater in terms of influence and heft, to be to be able to shift to this new position of influence without over pressing their advantage, and to fit into a global order which benefits them peacefully and in a way which leaves space for other countries. That is a very difficult transition to make, because there is a very understandable pride that the country has grown strong that the period of humiliation is over, that now we stand up again and we will not allow ourselves to be trodden upon. At the same time you have to remind yourself, neither will we do unto others what unfortunately we have suffered and that is not a very easy line for any leader to take. On the American side, to understand that China is growing, that its GDP is now second-largest to America, and within less than a generation will be bigger than America, maybe not as advanced but larger, and that this is not stoppable, and it is unwise to stop this. You can try to shape it, you can try to develop the relationship, you can try to make sure that it develops constructively, and that new rules will apply which will enable China to fit into the global system, but if the response is a defensive one, that this growth of a new player is a threat to America and we must make sure that they never become number one, and we must always be number one, I think that can only lead to a very trouble relationship, and it is an effort which cannot succeed. As the Chinese say, we are growing, you can hit us, you cannot kill us. You can hurt us, that is true, but the person who hits us will also hurt. If both sides understand that, then however difficult it is, there is some chance that you can work together and develop a relationship which will have competition, where there will be issues where you do not agree with one another, but there is a substantial area where you cooperate with one another and benefit from that. Moderator: In a pessimistic scenario we would be faced with, and I quote you, unhappy and painful choices for the rest of us. PM Lee: Yes. Well for Mexico your links are more preponderantly with the US than even. But for countries in Asia, which includes not just Singapore but many countries in Asia, including Japan, South Korea, Australia or many American allies, in fact, their economic ties with China exceed their economic ties with America, in terms of trade. The American investments are critical, American MNCs play a big role, the Chinese MNCs do not do that yet. But in terms of export markets, the Chinese are bigger than Americans, and so to have to choose between them, and say, I now to settle on one bloc instead of the other bloc, I think it is going to be a very, very difficult choice for any of those countries. Even some of the treaty allies of the United States, such as Australia have said that they would very much prefer not to have to choose sides. I think that is a reality which may not be fully appreciated in the big countries. Moderator: That would be an
understatement You have been championing the idea of
multilateralism, which seemed as of late to be out of vogue. Tell us more about that, you spoke about this in the UN General Assembly in September, the Washington Post called you 'the man in the middle', a convener, particularly in the context of perhaps, (President) Macron, who is busy with the resistance within Europe, or a Trudeau who is busy with his own domestic issues. So you truly stand out as the leader in the world that is pushing for that agenda. Do you think it is viable? Where do we go with that? PM Lee: I think that there are many countries in the world who do want to cooperate not just bilaterally with one another, but in wider groupings. I mean, the EU is, despite the difficulties with Britain, very resilient and an important grouping, and the countries in the EU all want the EU to succeed. Nobody is queuing up to leave the EU after the British, not even the Greeks. So that is one example. If you look more broadly, for trade issues, for example we concluded the CPTPP, the trade agreement, Mexico is party, Singapore is party, America was going to be party, but Donald Trump said no and well, the remaining 11 preceded. And that was a very important signal that countries do want to cooperate with one another more than on a bilateral one-on-one basis and furthermore, on a win-win basis, so that is not just an exercise in armwrestling — my arm is stronger than your arm. Because this is not a win-lose game, this is a win-win game, and if you can come together, then there are joint gains which we can mutually benefit from. The difficulty is that the limit, the ultimate for this multilateral model is
the WTO where all the countries come together and you try to make a deal involving everybody — 160 odd countries. and that is very, very difficult because the attitudes are very different, you have you have the big countries, some of which used to push for freer trade, like the US used to, now the US is playing a different role. You have the developing countries, some of which were very conservative in trade matters, India, Brazil, South Africa, and if you go on consensus, you need to carry them along and therefore the deal does not close, and so what do you do? In the absence of new rules, where you can proceed without people who did not agree with it, then those who are willing, come together, and we work as willing groupings, so the CPTPP was one willing grouping. Within Asia we are now talking about the Regional Comprehensive Economic Partnership (RCEP), which is another free trade agreement with ASEAN, with the North East Asian countries, which are China, South Korea, and Japan, Australia and New Zealand, and we had hoped with India, but India says they are not ready, so we will see what India does, but it is a substantial FTA in Asia involving multiple countries cooperating with one another in one form. I think that is the way forward. In your part of the world, you are doing the same, you have the Pacific Alliance, with Colombia, Chile, and Peru. We are negotiating an FTA, Singapore with the Pacific Alliance, and I hope you will be able to close it by the end of the year, and I hope we will have Mexico's support. Moderator: Thank You Prime Minister we have time for a couple of questions. Whoever has the mic first, can you please tell us who you are? Participant: On behalf of all the students of Monterrey Institute of Technology and Singapore University of Technology and Design that are gonna be part of the first corporate challenge that will take place next January in Singapore, in order to create economic and educational cooperation programmes with Singapore, we welcome you, Mr Prime Minister, and all your official and business delegation to Mexico. Under Singapore's Smart Nation initiative, new technologies have been implemented as well as, there have been investments in research and development to improve your inter-operability among systems and cybersecurity. It is known that people in Singapore are very highly skilled in technologies, and that your your government is pushing to make Singapore one of the most influential countries, technologically speaking. So the question is, what role do your universities have to improve this technological development in your country, or is your country relying on your entrepreneurs to drive this innovation? PM Lee: The answer is both. We think technology is very important to us for our economic development because we have reached or we are reaching the limits of what we can do just based on number of persons in our workforce. Our population growth is leveling off, in fact we are not reproducing ourselves adequately into the next generation, and so for the workforce to grow, either a bigger proportion of Singaporeans must work and most of the men do, so you talk about women, and already amongst the women, the proportion working is already quite high, or I have to depend on immigration, which I will to some extent, but there are also limits, social limits Or I have to depend on technology to raise productivity, and IT, technology is one of the very important areas where you can make a breakthrough, whether you are using artificial intelligence, whether you are talking about FinTech whether you are talking about manufacturing 4.0, smart manufacturing and 3D printing. These are things which can transform the way you do things, not just make things a bit better, but transform the way we organise ourselves in order to make the most of our efforts and our productivity The university's first role is to train good technical people, STEM — science, technology, engineering, mathematics — they must be competent, they must master their skills, they must be good at what they are doing and we must produce enough of them. That means you must get good students to come in and do these courses, and come out and continue to pursue these careers and work in engineering and tech jobs and see that the future is there. Sometimes if you do not follow through, you train people in STEM but they come out and they go into other parts of the economy. Sometimes they may go into Wall Street and become bankers, sometimes if the property market is hot, they may decide that it is not bad to be a real estate agent for a few years before you decide what to do with yourself. From the individual point of view it makes sense but from the national economic point of view, I may not be making that most of the talents which I have. So the first thing the universities must do is train good STEM people and enough of them The second thing is, we would like them to be centers for innovation, that means have new ideas, do research which is some at the more basic level, some at the more applied level research which will help us to come up with new ideas which will have downstream practical economic implications, and will support companies which are operating in Singapore, For example, if you are if you have set up a electronics firm in Singapore, if you are doing semiconductors, you want to have research institutes which know about semiconductor science and physics, if you are talking about hard disks, you know about magnetic materials, if you are researching quantum technologies, you have people who know about quantum technologies on the theoretical basis in the university, and so that is another part of it. The third part of it of course is entrepreneurship, which is if a university professor has a brilliant idea, then we do not mind if he decides that he is going to start a company and try to make a success of that idea. He starts up a firm, he produces a product, and then he if he makes it big, he generates a unicorn, even if he does not, I think it is part of the ecosystem of innovation and entrepreneurship, which is important if you are talking about an economy which is moving into the tech age. The universities do not only do this alone, we also look for entrepreneurship from other sources, our own people who graduate and go into these fields or people from the region or from elsewhere who decide that Singapore is a good place to come in order to set up a tech startup and to do business. We have companies in Singapore which which originated in the region, in Malaysia or Indonesia, and they have decided they want to be based in Singapore, they have presence in many countries but they have made Singapore their main centre, and I think that is a an important part of our tech effort as well. Moderator: If I may, let me complement the question, Prime Minister. A year ago the full board of Monterrey Tech visited Singapore, as you know, and Deputy Prime Minister Tharman was very kind in terms of opening many doors for us. We met with the leadership at NTU, NUS, SMU, universities where we already have very strong connections. And today, some of us from Monterrey Tech here will attest to the fact that we are basing our reform process which is the most ambitious academic reform process in Latin America on what we learned in Singapore, so thank you for that. PM Lee: Well we all learn from one another, and we all see how people do things elsewhere and we would like to pick up features of that and do it ourselves, and it is not always so easy. Monterrey Tech is having a cooperation with SUTD. I think you are going to have some 40-odd students come in January, so I look forward to receiving you in Singapore. I suppose we have got a common connection because SUTD started off with MIT and Monterrey Tech started off also taking inspiration from MIT. When we started SUTD, one of the ideas was, these are things which MIT wanted to do but could not implement in Boston, in Cambridge, Massachusetts, because they did not have a green field site, they had established departments, they had established ways of doing things, and you cannot just break it up and reshuffle the pieces, but in Singapore they felt that they did have a chance, starting afresh to orientate the whole university around the idea of design, so it is not orientated around a department of physics or engineering or IT or biology , but oriented around the idea of design and multidisciplinary. I do not know to what extent we made it happen but it is different from what is in Cambridge, Massachusetts. So, I think we all learn from one another. Moderator: Oh believe me, Ambassador García-López and and Bertil Andersson and many other friends are making sure we keep the eye on what Singapore has to teach us. Someone else had the microphone already
please? Participant: Mr Prime Minister, we thank you very much for the visit. I took a reading on a brief biography of your and I was quite impressed. For more than 15 years, you have been Prime Minister, and I am certain that in these turbulent times, you have seen leaders and governments coming and going. So my question to you is what kind of advice would you provide to our business community, not just in Mexico but in Latin America, that we are suffering this kind of turbulent times in order to ensure that we can provide growth and wide branches, thank you. PM Lee: I think we have to take a long-term view of the opportunities. You have to make an assessment of the societies whether in fact, it is heading generally in a positive direction or whether these are very deep entrenched problems which may a generation or more in order to work out. It does not mean that if you are heading in the right direction, things will progressively get better and better, because as you see from the example of Chile, even as the economy grows and inequality comes down unhappiness may, in the process, intensify, and before you can reach the happy outcome, you already have an unhappy mishap which can be quite sudden and unexpected, but you still have to work in those directions, and as business people you have to take the environment for granted, but at the same time I think you do have a role in setting the tone for how businesses operate, that they operate transparently, that they operate from the point of view of creating long-term value, that they operate in ways which will encourage the economy to be open and discourage rent-seeking and closing in on yourselves. I know that is easier said than done. We are all in favour of free trade but please, not in my industry and preferably not in my company, that's human nature! And yet if we all take that attitude, those are some of the trends which lead to political economic systems where the politics and the business gets deeply intertwined and then you have, in the long term, tragic consequences. In Singapore we have tried our best to keep our system separate, so even when the government owns the company, for example, Temasek Holdings, we have put in governance measures so that the government ministries cannot interfere in the business decisions of Temasek Holdings or of its subsidiary companies. From an ownership point of view, they are government linked companies, the government directly or indirectly owns 20%, 30%, 40% of them, but the ministries do not run the companies the companies have to be run as businesses, accountable to all of their shareholders following the same rules as any other business. So there are two sides to this. On the one hand, we cannot give the company any special favour because the government owns it. On the other hand, we cannot ask the company for a special favour because the government is a shareholder. The two have to come together because if I ask you for a special favour, you can be sure at some point, the company will come back and say I have this special requirement, please take care of it, and very soon you will be washing cars. So it is not easy to do, for example the Chinese who have got state-owned enterprises in a big scale, they come and they look at our system, and they try to understand how we operate. How is it possible for us to appoint a board and yet not interfere in the operations of the board? And they go back and they tell us — yes I think I understand how you do it, but I do not think I can do that back in my own place, which is an honest assessment, the political conditions are not possible. But if you can reach that kind of situation where the businesses are competitive, are self-confident, push for openness and in the way they operate, improve lives for a significant proportion of the population, your employees but also the whole economy then I think you make a contribution to the country. Moderator: We have a very ominous clock right in front of us here and it spells 4 minutes, so two very quick last questions, please. Participant: Mr Prime Minister, welcome to Mexico. I am Lorenzo Berho from Vesta. It is a Mexican public company, we develop industrial parks. The very first time that I heard the word 'logistic' was from, I understand, a classmate of yours, Mr Robert Yap. He was a classmate and a great inspiration for what I do today. PM Lee: We were at officer cadet school together. Participant: Today Mexico has evolved, for the last 25 years, and industrial parks have been playing a major role, and we do have today, some Singapore investment in our companies, but we see that there is a lot of potential to increase this partnership, so I would like just to hear you thoughts on that. PM Lee: I think there is opportunity. I think one of the reasons the world has prospered until 10 or 5 years ago, is because there has been intensifying globalisation and the supply chains have been distributed to many countries, and this international division of labor has enabled tremendous gains and productivity in cost savings and also I think in countries having an interest in one another's success and therefore contributing to a more stable geopolitical environment . Now you are in a different situation. The USMCFTA has got more stringent rules of origin, on autos especially, as well as generally being less open to a multi-directional cooperation. Mexico has decided that you have to move forward with this, and I can understand that decision. I hope that as you go in that direction, you will not neglect to cooperate with other partners as well in the world, including in Asia Moderator: Very quick question, please Participant: Hi, Mr Lee Hsien Loong. We are delighted for your visit. We represent an electronics recycling company from Singapore, who tests who is the leader in electronic recycling in the world and the purpose for this company is to invest in Mexico to provide the best solution for electronic recycling and energy storage solution. You are very welcome to visit the plant in Singapore, also with Mexican authorities, to meet directors of technology, and the new plan for recycling in lithium batteries. PM Lee: Sorry, is there a question? Participant: It is not a question. It is only an invitation for you, if you are interested to invest in sustainable resources. PM Lee: Thank you. Recycling is an important subject. I do not think we have time to do justice for it. I would just like to say, actually it is a business which could be properly internationally operated, but because it is not properly regulated and there have been so many abuses it has acquired a bad name and is not easy for electronic waste to cross international boundaries. That means many inefficiencies and high cost will be incurred. If Mexico is able to have a good regime managing this business, we will be very happy to cooperate with you. Moderator: Prime Minister, thank you so much. In my 41 years of traveling to Singapore, all the way back to when we landed at Paya Lebar, and the best thing to do at the time was to drink a Singapore Sling at the Long Bar in the Raffles. You can still do that indeed!
You have come a long way and that is truly the understatement of the morning what
strikes us the most is beyond what you've done in terms of infrastructure
and development and so forth is the mindset that constant thought in your
minds across the board that you can do more and you can always strive to do
better so thank you for your visit it is more than timely, considering the times
that we are living in in Mexico and throughout Latin America. Please come often in the future. Your presence here is more of an inspiration that you can think of. Thank you so much to Enterprise Singapore for all they did, it is a wonderful team that you have here. PM Lee: Thank you!
