Nov. 28 (Bloomberg) -- Singapore Prime Minister Lee Hsien Loong comments on the country’s birth rate, property market, monetary policy and economy. He also spoke on the rising political opposition and his leadership in a Nov. 26 interview in his office in Singapore.
On 2013 agenda and challenges:
“The immediate issue which we are focused on is the question of demographics, population growth, connected to that immigration, connected to that economic growth. And we’ve been having a discussion over the last few months, nationally. We put up a series of papers, we’ve set out the issues, and we’re going to have a debate in parliament, to bring it all together in January.
“It’s a big issue. It’s not something which we are going to be able to solve one-off, but we’ll be dealing with it over the next ten years, and longer. Because we’re not producing enough babies, we need to top up with immigration. We must strike the right balance.
“We must maintain economic growth. So that’s a complicated set of trade-offs.”
On raising the birth rate:
“Well, it’s an issue which many countries are dealing with. None of them have come to any very satisfactory solution because the trade-offs are difficult ones. All the developed countries have a problem of not having enough babies. The Scandinavians and Northern Europeans have done better than most in persuading people to have more kids and creating the conditions where people want to have more kids. Some lessons to learn from them, but our society is quite different from them.
“Then there’s a question of how you manage inflows and integrate them into your society. And there we’re looking at cities which have got very diverse populations like New York. But then they are cities, they are not countries, and we are a country and you need not just economic vitality but also a certain sense of cohesion and nationhood and that’s a big challenge.
“We have extended maternity leave. The government has taken on the burden so it’s not on the employers. The government pays for part of it. The question is how to persuade our men to carry more of the responsibility of bringing up young children. One of the ideas being tossed around is to have not just maternity leave but parenthood leave, and some of it can be taken by the father. We have put it off for a long time because we felt that this was an Asian society and attitudes haven’t shifted that far, but attitudes are shifting, norms are shifting, women are working and men have to do more of the burden, including changing nappies.”
On the property market:
“It is certainly something on Singaporeans’ minds. We have had a property boom, almost a bubble. It’s because liquidity is sloshing around worldwide and real interest rates are negative. People are looking for opportunities to invest their money and there aren’t a lot of exciting opportunities where you see growth and possible new breakthroughs right now. So that’s a difficult problem for us on the overall property market. In the public housing market with new flats, we have control and we can build more and we can make them available and affordable. It takes a while but it can be done.”
On interest rates and currency regime:
“We do not control our own interest rates because we are such an open economy, we have no exchange controls, and our monetary policy is centered on the exchange rate. We cannot control everything.
“I don’t think we would be able” to move to an interest-rate regime from using the currency as the main policy tool, Lee said.
“It would be very difficult. Our economy is so open, we are a financial center. For us to sustain high interest rates at a time where interest rates worldwide are at almost zero, I think is very hard. We’d be flooded with money.”
On political opposition gaining support:
“It’s what you would expect to happen as we have a change of generations amongst the population. You are in a new age, much more open and inter-connected, and social media have had an impact here as in many other countries. And we have to be prepared to contest and win in that environment. It’s less orderly, less predictable but I think generally speaking, Singaporeans are sensible and they will do the right thing.
“The question is in that environment, can we still get governments which take a long-term perspective beyond the immediate election, and do things which you need to do even though it might cost you over a three, five-year period? That is the challenge we face.
“The new generation is different. They’ve grown up in quite a different environment, you see that happening everywhere. We have to have people who are of that generation and in sync with that generation. We all try to do that, but it helps if you also have young people on the team who are of that generation. The identification is easier and the effort is more natural.”
On what the most important thing for the nation is as it moves beyond former Minister Mentor Lee Kuan Yew’s guiding voice:
“You have to be able to institutionalize what we have achieved, to remain exceptional, to aim for excellence and to be able to act in our collective interest over a long period of time. That’s a very demanding set of requirements. You are talking about a new generation of leaders, a new generation of Singaporeans, a new world and a very educated English-speaking population for whom options are available everywhere, particularly for the most talented. And to keep a place which is outstanding in that environment is not easy.”
On Singapore’s casinos:
“Economically, it’s been a great success. We were lucky with their timing. They started early enough so that when the financial crisis came they didn’t stop it and when it was completed, the financial crisis had gone and they were ready to catch the wind. They made very good business over the last couple of years. This year a bit slower but they will still do well. It makes a contribution of 1.5 to 2 percent of GDP and provides more than 20,000 jobs directly, plus 40,000 jobs indirectly. And a lot of those are Singaporean jobs. So economically, it’s been a good thing.
“Socially, the impact has been about what we expected it to be. There has not been a drastic change in habits, people who have gambled now gamble in the casino, they gamble a bit less in other ways, in horse racing, jackpot machines or on cruise ships. But we have to wait and see because the social impact is not something which happens quickly, it accumulates over time. We will not know yet.
“But I think we did the right thing. I don’t think the people who were against it have fundamentally changed their minds because their objections are in principle, they think gambling is no good and they would rather it not happen. But our view is it is going to happen, so let it happen in a controlled and productive way.
“Gambling is not just a reality in the world, it’s a reality in Singapore. Singaporeans do gamble, we do have other legitimate avenues in Singapore. There’s also some underground gambling. There are avenues in our neighboring countries. There are avenues on the high seas which are very close by. So better have it onshore, where we can keep an eye on what’s happening, and where we can derive some revenue and do some good work with it.
“I acknowledge that from a moral point of view, if you don’t keep it under control, you’re going to have a big problem, not just for the individual but for the families and the children. So we’ve put more resources into dealing with problem gambling. You can have exclusion orders, your family can get an exclusion order on you if you don’t put one on yourself. We’ve now put in more safeguards so that if it looks like you’re there too many times a month -- then some firebreaks have to trigger and you have to be counseled and maybe there’ll be an exclusion order on you. So we can impose safeguards but I think it is not realistic to say we will just say no.”
On his contribution as a leader:
“I don’t think we should give ourselves report cards. We try our best to keep Singapore working because that is in itself a considerable achievement and to do better than we used to do. There will be places where you will have to make discontinuous changes. We try and do that in a way which people can accept and which eventually they will feel, yes we did the right thing. You cannot come to a verdict yet because these are long term issues -- talking about population, talking about immigration, whether it works or not. You will only know after a generation, but you have to think about them now.”
On what gives him satisfaction as a leader:
“First of all, we’ve been able to keep the economy growing and lives improving for most Singaporeans at a time of considerable uncertainty. We came through the financial crisis with some people perhaps not even noticing that there was a crisis because we took the right measures and our timing was lucky and we got through mostly unscathed. It’s good luck but I think it’s also a good team.
“We have been working in a very focused way on education to make sure that the next generation has better opportunities than the present generation. I think we can say that we probably have one of the best systems around in Asia although many parents and pupils think there is too much pressure. But the system works, they come out and find jobs, and they have choices.
“I don’t know whether we should consider this an achievement or not, but the people who graduate feel that they have made it through their own effort and not because of the government. That sense of self-reliance is a good thing but at the same time, it’s also a challenge because if they feel they’ve done it all by themselves, they may not feel they owe the society as much as they should.
“In politics, you don’t look for gratitude. You are trying to create a sense of responsibility, of obligation, that we belong to this system, it nurtured us and we owe it something back.”
On what he would do differently:
“I think we would have started earlier registering with people how quickly the world is going to change on them and what a big problem we are going to have with population. It’s always been sort of there in the public discourse but not something which we have succeeded in bringing to the forefront of people’s attention, to say: look, if we don’t do something in 20 years’ time, the population is going to have an average age 60, and this is going to be a retirement home and not a vibrant city. And that’s going to be a very different Singapore. We have to keep this a vibrant city, even when you’re old, we want young people around so that you can grow old happily.”
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