Lee Hsien Loong, Prime Minister of the Republic of Singapore

[Music] so it's our pleasure today to have the prime minister of Singapore here it's a country with which I'm reasonably familiar I first went to Singapore in 1970 and I've gone back at least once a year every year since then currently my firm has reasonably good relationships in Singapore and we have close relationships with the government of Singapore investment company and also with Temasek the head of Temasek which is government-owned company is madam Ho Ching who is right here as well thank you very much for coming as well and I wanted to just for those who are not familiar with Singapore it is an incredible story it was a British colony for over a hundred years merged with Malaysia briefly in the early 60s that didn't quite work as well as people had thought and so Singapore became independent in 1965 the first Prime Minister was Lee Kuan Yew who is the father of our current the current prime minister who serves as the third prime minister in Singapore's history the current Prime Minister was educated at Cambridge of degree in mathematics later came to United States got a degree from the Kennedy School at Harvard and then went back to Singapore went into the military became Brigadier General resigned from the military and then later got involved in government affairs elected to the Parliament and served in a variety of positions in the Ministry of Trade and Industry Ministry of Defence ultimately became the head of the Ministry of Trade and Industry subsequently he became the head of the Monetary Authority of Singapore and also was served as Deputy Prime Minister he became prime minister in 2004 and has served continuously since then and I think as you will hear in a few moments he's an extraordinarily gifted leader very articulate knows a great deal about not just Singapore but the entire world and his views on what is going on in Asia as well as around the world are well regarded by people throughout Asia and around the world and in till later today he'll communicate his views to President Trump in a meeting they'll probably talk about in our interview discussion so it's my pleasure to have now the Prime Minister Prime Minister Lee make some opening remarks thank you [Applause] Thank You mr. Rubenstein last time I was in Washington is August 2016 since then many thing have many things have changed in Washington we have a new administration with a radically different approach to government and to the world but the substance of US relations with Asia have not been turned upside down US economic interests in Asia are substantial and growing your trans-pacific trade exceeds a chance at transatlantic trade has been for some time continues so you're multinationals have major investments in many Asian countries including Singapore and your economic ties are complemented by major strategic and security interests major US allies are in Asia Japan South Korea Australia Philippines you have ties with China which are the most important bilateral relationship in the world and the peace and stability of the Asia Pacific is a vital United States national security interest successive administration's both Republican and Democrat have developed American relationships with Asia and strive for stability in the region and contributed to the stability in the region by your military presence biosecurity focus by your comprehensive diplomacy and economic relationship it's the right thing to do because Asia is one of the dynamic most dynamic regions in the world economy the hype about an Asian century has cooled off but Asian economies are still among the most vibrant in the world fastest growing accounting for two-thirds of global growth today if we look at Chinese companies like Alibaba or who are we or Indian companies like Bharti Enterprises or the Mahindra Group these are not just big companies they are world-class multinationals and there will be more and not only a individual Asian economy is doing well but the region as a whole is becoming more integrated and a more interdependent so different parts of Asia are linking up with in in Southeast Asia the ASEAN countries have an ASEAN Economic Community and by 2030 there will be the fourth largest market single market in the world ASEAN together with its Asian regional partners China Korea Japan India Australia New Zealand we are forming an FTA a regional comprehensive economic partnership and the key thing is it includes ASEAN and it will include China and India and it is a way to bring the countries in Asia closer together and increase the interdependence and the incentive to work together rather than to collide with one another it will cover half the world's population and 1/3 of global GDP India is making progress with mr. Modi getting it economy moving getting its bureaucracy trim back getting his taxes rationalized bringing in investments and linking up with the rest of the world it has been less active than the Chinese and developing his external relations but I think as its economy grows its incentive to do that will grow and they have a slogan look east now it's act East and we think that is - the good China itself has been vigorously promoting its inter-linkages with the world particularly with the region it has the AII be the Asia industrial Bank infrastructure and investment bank and now they have what they call the belt and Road initiative basically ways in which China can contribute to the regional economy and it can link up itself with neighbors in a way which is mutually beneficial China has been the most important single driver in Asia's prosperity and integration the growth rate has slowed but still at six plus percent it is very impressive and it has become the largest trading partner of nearly every Asian country including nearly all America's treaty partners whether it's Japan where there's Australia with their South Korea their biggest trading partner is not the u.s. it's China you can draw different conclusions from that you can say therefore why is the u.s. protecting them or you can say well why shouldn't the US do more business with them to strengthen the relationship and then there are different views and I can tell you that I go with a second view Asian countries want to benefit from the trade and economic opportunities that China offers they welcome to Chinese initiatives the AIB the baton Road to develop win-win partnerships with its neighbors and they do so because these schemes meet needs of these Asian countries urgent needs for financing for better infrastructure or better connectivity in Asia and also from a strategic point of view these schemes are constructive stabilizing ways to accommodate China's growing influence in the international system China is growing its influence will grow its desire to have a say in world affairs will grow and question is how can this be accommodated and I think doing so in a way which brings in its neighbors and benefits its neighbors I think that is the right approach to go about it it'll still be a difficult transition but I think that is the most promising approach Asian countries will participate in this but at the same time they want an open inclusive regional architecture and they don't want to see a world divided into rival blocks because they've prospered under global multilateral system of trade and Finance they have substantial economic links with us with Europe and they want to maintain and to grow these links even as they deepen cooperation within the Asian region the TPP was one way to deepen economic cooperation across the Pacific and to achieve a strategic objective which was to bring the Pacific countries closer together and enhance the chances of stability and security but because of domestic imperatives the u.s. decided to withdraw from the TPP the remaining TPP countries are naturally disappointed but they are continuing to work among themselves to take the TPP 11 forward they also hope that America will continue to maintain and enhance its economic ties with Asian countries in other ways it is I don't think that's from me this is not the time to start major new trade initiatives but America should still uphold free trade should sue it should tackle trade issues which arise and they will arise cooperatively with its partners and it has to continue to adopt a policy of sustained economic engagement in the region Asia has abundant opportunities for US businesses the investment and technological gaps in Asia as a country as the economies grow rapidly our opportunities for American companies to step into the growing middle classes that purchase innovative and high-quality u.s. products are another growing market there's great scope for American businesses to grow new markets to make fresh investments and create prosperity on both sides of the Pacific if you look at I phones I think Asia is one of the biggest markets in Singapore unlike in many other parts of the world the iPhone is really the dominant player rather than or niche upper end market your engines and aeroplanes sell all over Asia Boeing sells Pratt & Whitney GE in fact today Boeing will be signing an agreement with si a to sell 39 aeroplanes to si and there's one of the things we are doing in the white house when I call on President Trump later on and those are just two of the things in between is not just things but also services banking IT services all enormous operates opportunities for American businesses and enormous boons to American consumers who benefit from products from services in Asia which will make you competitive and improve your quality of life the key is the u.s. stance what do you believe where do you stand do you still believe that you still have the most to gain from an interdependent world open exchanges and multilateral rules in particular how will your relations with China develop I think there are key questions and how America answers these questions will determine not just a prosperity but also the war and peace and not just in Asia but in the world I'm open to questions from David thank you [Applause] so I'm sorry about that noise the NSA supposed to be quiet when it listens in but I guess it makes some noise sometimes but the Keith you can take care of that okay so so you're here to see president Trump have you met President Trump before yes I've met him I met him in Hamburg at the g20 meeting we had a good call we talked about the regent of the bilateral relations and I look forward to seeing him again okay and so you'll sign the agreement or the agreement will be signed about the airplanes there yes si are you signing it with Boeing it's a private agreement but it's emblematic of the relationship and of what we hope America will get in Asia and why America has a great interest in what's happening in Asia so TPP as you mentioned was not agreed to by the United States but the countries that signed on to it in Asia they are gonna move forward without the United States in effect well we are talking to one another about how we can move forward without the United States 12-1 should be 11 but when you make 12 - the biggest one is you're not quite sure what the remainder is and it's complicated because it was a deal which was on the basis that America would get something considerable out of it the other countries would get something considerable out of the US and overall when the u.s. joined it fundamentally shaped the structure of the package and now we've taken up the US and the rest of us having made all these arrangements to satisfy Mike Froman and now that my formulas not there why are we still doing that well we are trying to work out a package which makes sense I hope something can be worked out we've been talking about it I see that a new New Zealand Prime Minister has some thoughts on this we'll have to see where she lands okay so the main message that you want to convey to the president today is what that Asia is important to the United States Asia depends on the United States there's a lot we can do to get and a lot that you can contribute and your policies need to be based in political support in America but that hopefully will be possible to develop that support in order to pursue policies which will benefit America for many decades as you have done in bipartisan way for many years now historically singapore's had a very close relationship the United States and still does but also has a close relationship with China so which country is more important to Singapore United States or China I think there are both very important the presidency chin pain last year talked about overlapping circles of friendship and we hope to be in that overlap right now you were in China recently met where the four most senior Chinese leaders what impression do you have of what she deepening wants to do in his next five years they were busy preparing for the 19th Party Congress I was there just a few just a month before that the Congress is in progress now si Jinping has made his policy as the main speech at the beginning he's laid out a comprehensive agenda which goes well beyond the next five years and stretches to 2050 of all the things that she'd like to do for China and these are none of them earth-shaking new goals because they've been talking about them for some time where there's economic growth whether it's improving the living for the middle income where there's talking about social support where there's environmental where there's anti-corruption all most important in item number one whether it's continuing vitality of rule of the Communist Party of China so when you were growing up your father as I mentioned earlier was the first prime minister of Singapore did he say I want you to go into government or did he say you could do whatever you want or did you know I he didn't plan for me to go into government when I was about completing high school I wanted to get a government scholarship because all the good students wanted government scholarships and if it didn't he thought something was wrong with you and I got a government scholarship and then a year later we were building out the Armed Forces at that point and the Armed Forces needed talent and it entered they introduced Armed Forces scholarship which is something new and I decided to apply for that my father encouraged me so I went to Cambridge on an armed forces scholarship and after that I came back and served in the Armed Forces some years later I spent a year which not many of you and a place not many of you would have been to which is in Fort Leavenworth in Kansas there's some people in Washington who probably have spent time there now now I have kindred souls or some of them went to Quantico so the and that was where I was headed and beyond the Armed Forces well we didn't think quite that far but probably somewhere in the civil service or in the public sector but in 20 in 1984 or around then my predecessor ms a go talk Tom who was then my minister in the defense ministry asked me says would you be prepared to come into politics and my wife had just died and took me awhile to think over but I said yes I will do that so I resigned from the Army where stood for election was elected I went into government and I've been there for now more than half my life okay and your father tell you this was difficult line of work or he didn't discourage you your father no he didn't discourage me but he did say it's going to be difficult because I'm his son and people will make comparisons so now you have announced I think publicly that after the next election you probably will not stay for a full term is that correct I do not want to stay the whole time I've said that I soon after the next election I strongly hope that there will be a successor ready and in position to take over from me and I really shouldn't be Prime Minister beyond 70 if I can help it at all so when you do step down as prime minister what might you consider doing I will think about it then okay no I hope I will still have some something valuable to contribute no private equity positions for you [Laughter] so today can you explain to people who haven't been this Singapore how Singapore's managed with a relatively small population 5.6 million people to become one of the economic powerhouses of the world really you've got it I think the third highest GDP per capita in the world how did it Singapore do this from a running start in 1965 when Malaysia really didn't really think Singapore could actually grow very much well first of all all backs were to the wall either we did this or he died and no a lot of people who thought we wouldn't do this and there were some people who hope we couldn't do this so we decided we'd show them so we got together we worked hard we pursued policies which at that time were unconventional and in particular we decided to allow ourselves to be exploited by multinationals because in the 1960s the conventional wisdom was that multinationals were evil they exploited the populations and they were to be kept out and kept down and you should promote your own indigenous economic development and we decided to by exploiting us they created jobs for us and they generated markets for us and they brought in technology and organization I think so be it and we were very happy to do that and it led us to take off so there was one very important factor a second important factor is that we built up our armed forces through national service had dropped and every male citizen aged 18 will do national service for two years at that time two or three years and we built up a credible armed force and Singapore was seen as being defensible and not just a walkover as had happened during there and the Japanese invaded and in the process of building up an armed force through national service we also built a nation because the people having served together with comrades of all different walks of life came out and it changes your attitude towards the country today who do you see as your military rival that might actually invade well one of the reasons we have so many because we have a good armed force okay and now let's talk about inside the country you have a reputation for producing students that score extraordinarily high on math tests is there something that Singapore is doing in its schools that have such high math scores from your students we are not sure I think how students work very hard and the parents put a lot of emphasis on education that's one part of it another part of it is that our math curriculum somehow we seem to have found the right formula for how to the right combination between drilling and thinking because they do need to learn certain things and at the same time we need to need to know how to jump after the box and solve problems and we seem to have got the formula right and other countries including some American jurisdictions have tried out our textbooks and seem to be happy with them now you were a math student yourself is that right yes and are you an expert still in math or you can you keep up with what the students are doing today and no I'm a voyeur I just read what mathematicians do and wish I understood what was up now a number of years ago to some controversy at the time Singapore invited gaming companies or gambling companies who enter Singapore and some people were concerned about that how has that experiment worked I think it has worked out well it's contentious it still is not you know not unanimously welcome but it is something which we thought would be a plus for us because we convinced ourselves that if we want to develop the tourism market this was one way to do it and it could be done in a way which would limit the social impact and which would generate dividends beyond the gambling profits because it's really a comprehensive resort you've got conventions you've got hotels you've got retail you've got restaurants you've got shows you've got a lot of other activities and spin-offs which makes sense and so we decided that we could take the chance how people were already exposed to gambling there's all sorts of gambling legally happening in Singapore there's gambling online which is impossible shuttle that's gambling illegally which happens all around us and well we are not that virginal to be impossible to be exposed to temptation so we we decided to allow this we made a market solution we said they'd be our Singaporean and you go into the casino it's a hundred dollars for 24 hours of exposure it's a fee paid to the government some other ways if you're Singaporean you pay extra if you're from China you don't pay that's right and hopefully you'll gamble more from China and you will end up paying something to us all right now and that has worked out very well the result is that it's mainly a foreign market the impact on Singaporeans has been limited and the impact on jobs in terms of GDP in terms of revenues has been considerable so I see it's a plus have you ever been in gambling yourself or I I went in once to take a look okay I paid $100 and was very regretful that I didn't do anything with it okay now Singapore years ago received some international attention I think your father was against chewing gum yes he was I'm sucker bleep so he didn't want anybody chewing gum in this Singapore and you could be fined for that is that still the policy or no you can't be fine for chewing gum what we did was to ban the import of chewing gum unfortunately we are not a native producer oh so how do you get it then well some people smuggle it in oh okay I thought the concern was he was concerned was that people were taking on buses and putting it under the bus well I think the final I'm not sure the final straw the final word was when somebody took a lump of chewing gum and stuck it on a train door in the Train stalled so he decided there was a good reason to pursue the matter which he had wanted to do for a very long time okay now talk about Southeast Asian countries today and let's talk about yours first why is Singapore a good place in which company should invest American companies or other companies what's it why is it a good place to invest well if I may be permitted commercial it's where you're able to have the ethical stability a good environment to live a good business environment to work a workforce which works very hard and is disciplined and will be cooperative with management and basically are in the middle of a region which is prospering and from Singapore you can cover a big part of the region China to some extent India Southeast Asia Australasia and therefore you come to Singapore not just because of Singapore but for the region suppose somebody has never been this Singapore and they're not interested in being a business person I just wanted a nice tourist place why should they visit Singapore what's the appeal of Singapore as a place to visit well they don't have to go to the casinos you can just see the city because the city itself I think is a very gracious place to live and something which were very proud of if you've been to Marina Bay you have seen what the skyline is like and walk around you'll get a sense of what the people are like the atmosphere the absence of anxiety or insecurity you don't see soldiers on every corner of policemen but you see people who are working who are getting business done who are bringing up families who are looking forward to the future and you have a lot of Americans living in Singapore now Oh huge numbers I think you have one of the biggest American schools in the world in Singapore which is a very good one they send a lot of students to Ivy League so that may be another reason to come right okay so one of the your neighbors let's talk about your neighbors how is Indonesia as a place to invest and is that a power growing economic power in the region it's a big economy they have 250 million people they have a lot of natural resources the government is working hard trying to bring in infrastructure investments trying to bring in natural resource investments trying to create jobs because the population is still growing quite rapidly their costs are low the environment is progressively improving but it's a big country and that those things take time but we have very big investments in Indonesia we are one of their biggest foreign investors and when you say investors this is through the GIC or through well gee I see we'll have some proportion of their portfolio in Indonesia as their globally diversified the Massey has summoned Indonesia too but a lot of private sector investments are in Indonesia now for those who aren't familiar with GIC it's more or less your sovereign wealth funds these are sovereign wealth fund and it's generally considered to be about the best managed in the world it's been around for quite some time now what is to see the reason for its success would you say I'm not sure we would put ourselves as Best Managed we benchmark ourselves with other countries I think there are two or three factors which make it work one we made it a company rather than part of the government or a quasi government organization because that means you can set it up on its own terms you can pay people properly you can generate the right incentives and bonus structures and and corporate culture in order to manage this fund not like a private fund but as a custodian ancestors as a steward on behalf of future generations of Singaporeans so that's one part of it a second part of it is that we treat this religiously as fund management outfit we do not use them as an agent of national service of government state policy so the government wants to take money to subsidize an industry or wants to use some money in order to pay for some benefit for the population while we vote money on the budget and then we take the money back there's hours we decide what to do with it but when GIC invests their remit is long term race risk-adjusted returns and strictly that so they don't worry about bullet political overlay our job is to protect them from the politics so that they can do a professional fund managers job and that's very very hard to do inside a government so talk about your other neighbors in Malaysia as you know given your success dismal you ever say maybe you would like to reunite with them or they want you back now or not we we don't often discuss such possibilities I think there was a fork in the road 52 years ago and we went one way and they went the other and you cannot turn back they've gone further in their route and we have gone further on ours and if we came back together I think we would cause enormous difficulty to each other now let's talk about Japan mr. BAE was an effect reelected with Laurie strongly reelected so how big a presence is Japan now in Asia relative to China in economic terms they have big investments they have substantial MNCs in Singapore their banks are in Singapore it one time their banks with them not among the biggest in the world now less so but still significant the Chinese are beginning to invest outbound and they're also present in Singapore not yet to the same degree in terms of regional presence I think the Japanese do a significant amount in terms of Oda foreign aid diplomacy with Asian countries but somehow I think in a Japanese system it is harder to pull all of the whole of government together and operate as Japan Inc which the Chinese have less difficulty doing now because of World War 2 is there still some animus towards Japan in Singapore in Southeast Asia well the generation who experienced it will never forget they are passing on but the subject is not disappeared earlier this year we had a small kerfuffle in Singapore because we put out we made an exhibition and our in a historic site the Ford Motor factory where the Japanese where the British surrendered to the Japanese and we call it the Shonan gallery we call the exhibition the tsunami gallery and Shonen is what the Japanese call Singapore when they governed it when they occupied it there was a humongous row and I think it was the wrong we did the wrong thing and we change the name of the gallery it was it was not just those who lived through the years who said you are you are putting the name of the oppressor on our exhibit but even many others who said why are we doing this so what about India is India becoming a bigger presence in Southeast Asia well India is growing their interest in South in the outside world is also growing in relative terms their GDP is I think about a third China's that up for foreign traders just one-fifth China's their interest has been very heavily focused on the subcontinent because they have a very complicated environment in the subcontinent with all of their with the other country with a neighboring countries but as their economy grows and if mr. Modi's policies work as as it develops more interdependence it will have a growing interest in the region and a growing activity in diplomacy in economic relations in infrastructure and we hope that it will play a constructive role in the region now you're gonna be in the united states for a few days and you're gonna be in washington for a few days seeing other members of the administration can you tell us who else you're gonna see and who you're gonna see in congress well mr. Tillison is away and so is mr. Matthews and I'm going to be meeting the Commerce Secretary Wilbur Ross I'm going to be meeting with some nutrient I'm going to be meeting Gary Cohen and mr. McMaster okay as well as some congressmen they are very important and Senators okay so what your main message will convey to them is the importance of Asia for the United States as well yes and I know you are preoccupied with domestic matters and every country has its domestic issues to handle but the external world is moving Asia is dynamic and America has its you not only have a role to play it's really your game to lose don't use it now you pull over here on Singapore Airlines yes right so actually not oh you didn't I will I flew over on somebody else is there anybody else okay because Singapore wasn't available I guess at the time well we don't fight directly to Washington at last okay well maybe you can change that we hope so the intermediate stops don't quite agree so Singapore Airlines has a very good reputation for service and so forth what is Singapore Airlines secret why is it generally rated that what about the best airline in the world well the Chairman is here you can ask him I think it's because he knows that our reputation is online and furthermore that they have to earn their bottom line and if they don't well there's no bailout for them so they work very hard and they built up a very strong team and there's a very strong pride in it amongst the team in Si and among Singaporeans in our national airline now the European leaders ever call you up and say you should buy Airbus for your airline sir regularly what are you telling me tell them I said I will consider you make me a good offer okay which sometimes they do okay and such a day you enjoy being Prime Minister as much as when you first became prime minister in 2004 well you get into your stride you know what you can do what you can't how long things take to do what are sensitive matters and you you try to push them to the limits of what is possible and the greatest pleasure being prime minister of Singapore is other than this interview is what's the greatest pleasure to feel that you have made some contribution to our country which has been stable which has been United and which has been making progress steadily now for more than a decade and the greatest challenge being Prime Minister the job gets harder in a way because the expectations are higher or at a higher level and it's a much more it's a more uncertain global environment every private equity fund is telling us that it's very hard to make money nowadays but they still tell you to give them money right well if they show good performance we think about it right and would you like your children to go into government or politics it's up to them I have not shown any interest I think they have to have the right combination of temperament character ability so we will see but so far they have been happily pursuing their own paths and do you think when you're in washing up time for anything other than meeting governor Fisher's any sightseeing any restaurants you want to go to well yesterday I went to have a walk at the Rock Creek Park a beautiful fall day two weeks later would be even more beautiful but it was very pleasant and it leaves were turning beginning to see some color and then we had lunch at Shake Shack okay how was that my children told me I had to do it okay well on that note I want to thank you very much for coming to Washington and thank you very much for this conversation you

Channel: The Economic Club of Washington, D.C.

Views: 49,046

Rating: 4.6020942 out of 5

Keywords: Lee Hsien Loong, Singapore, David M. Rubenstein

Id: 97RGxdQFWNA

Length: 37min 35sec (2255 seconds)

Published: Mon Oct 23 2017