Singapore new guard ready for foreign policy tests, says outgoing PM Lee

Outgoing Singapore PM Lee Hsien Loong (fifth from left), chairing his last Cabinet meeting on May 9. - PHOTO: LEE HSIEN LOONG/FACEBOOK

SINGAPORE (Bloomberg): Singapore’s outgoing Prime Minister Lee Hsien Loong said the new leadership team is ready to take on whatever foreign policy tests there may be, as the city-state tries to navigate through increasing tensions across the globe.

Lee said in interviews with local media marking the end of his 20 years in power that the new team will certainly be tested as "people will want to see how the new leaders are, what their policy is, and what their personality is.”

"We may have had a changing of the guard, but the new guards are prepared, and the old guards are still, giving hopefully useful views to the new team on how to do it,” he said in official transcripts of interviews published on Friday.

Lee, 72, will step down as premier next week, and his deputy Lawrence Wong will become the nation’s fourth prime minister. While the handover has been years in the making, it comes at a precarious time for a trade-reliant economy that’s struggling to manage external risks.

While Singapore’s economy avoided a recession in 2023, Lee in the past has warned of a "troubled” international environment that will weigh on growth and security.

Tensions between the US and China - two countries Singapore depends on - is a case in point. As a small island nation, it has sought to balance deep ties with both even as the geopolitical competition grows between the world’s two biggest economies.

"The underlying tensions, the underlying contradiction between their national positions, national interests, I think is very deep and will be there for a long time,” Lee said of the two countries. "More than 10 years, maybe 20 years, maybe more. Fortunately for us, we have good relations with both.”

Lee is set to become senior minister after he steps down from the top job. When asked what role he would play in cabinet, Lee said he has talked to Wong and will give the benefit of his experience and leverage his network of foreign leaders.

"I said, I will be here to do my best to help you to succeed, you have to be your own person,” Lee said. "You have to make the decisions. You have to lead in your own way, persuade people in your own way.”

Living Costs

Singapore’s economy expanded slower than forecast in the first quarter as a spending boost from tourism and concerts failed to offset the slump in manufacturing. Escalating tensions in the Middle East, and risk of a delayed easing in global interest rates could cause further economic pain this year, its central bank said last month.

The current government has sought to assuage public anxiety over living costs that have risen since the pandemic - a matter that has become the top concern among Singaporeans.

"Over the last 20 years, we have actually moved very far towards better social safety nets,” Lee said in the interviews. "Of course, people will always say ‘please do more’ and we will keep on improving.”

Wong has pledged to continue boosting social safety nets while doubling down employee re-skilling programs as part of a national vision focusing on income and wealth inequality.

With the next general election potentially to come this year - but no later than November 2025 - those assurances may go some way to boosting support for the People’s Action Party that has ruled since Singapore became an independent nation in 1965.

By handing the reins to Wong ahead of elections, the PAP is hoping to achieve a strong mandate behind its new leader. The 2020 elections were the party’s worst-ever showing in terms of population vote, despite winning 89% of parliamentary seats based on its first-past-the-post system.

When asked if a non-PAP government was possible in his lifetime, Lee said: "I hope not.”

"We will try very hard as a PAP to make sure that we continue to win the people’s mandate and to hold the position, in a different way with a different generation,” he said. "But if that happens, that means we have failed to do that. It can happen.”

-- ©2024 Bloomberg L.P.

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