Well, I did not meet John F. Kennedy. He was supposed to have charisma. But a second view has emerged arguing that his policies were not all that well thought out. I consider Lyndon Johnson a strong president. He was saddled by Vietnam and he refused to give up. So he expended time and resources because he did not want to appear a wimp. But domestically, he was a good politician from Texas. Gerald Ford was an average president, but he had good advisers like Henry Kissinger and other Cabinet secretaries. So he got by. He had a good team, although he himself was not brilliant. Richard Nixon was a strategic thinker. It was a pity that his keenness to eavesdrop on the opposition led to his disgrace. He impressed me very much. He was a thinker in his own right. I was impressed by him because he came to Singapore before he was president and spent an hour an a half pacing up and down picking up my ideas and taking notes. So, to make my presentation simple, I told him that some nations are like trees, they grow tall and straight, they do not need support. And some nations are like creepers, they depend on a tree and they creep up the tree. Fortunately for me, he never published that, but I think he noted that.


Well, I would say the trees are Japan, China, Korea, even Vietnam.


Nixon would engage, not contain, China. But he would also quietly set pieces into place for a fallback position should China not play according to the rules as a good global citizen. In such circumstances, where countries will be forced to take sides, he would arrange to win over to America’s side of the chess board: Japan, Korea, Asean, India, Australia, New Zealand and Russia.


Clinton was effective and a polished speaker.


I see China’s weaknesses in two fields. No governance institutions — the individual is stronger than the person who occupies the office. Second, they don’t have the rule of law, it’s the rule of the individual in charge. So every change of leader can mean a change of several echelons or levels of the people at the top. That’s a destabilizing factor.


Another way we keep our linkages with the rest of the world is through language. We were lucky to have been governed by the British because they left behind the English language. Supposing we had been governed by the French, like the Vietnamese, we would have to unlearn our French before learning English to connect to the world. It would surely have been a painful and difficult conversion. When Singapore became independent in 1965, a group from the Chinese Chamber of Commerce came to me to lobby for Chinese to be chosen as the national language. I told them: “You would have to fight me first.” Nearly five decades have elapsed and history has shown that that the ability to speak English and to communicate with the world has turned out to be one of the most important factors in Singapore’s growth story. English is the language of the international community. The British Empire spread the English language throughout the world, so when the Americans took over, it was a relatively seamless transition to American English. It was a tremendous advantage to the Americans that, globally, so many people could speak and understand their language.


The success of America lies in its dynamic economy, sustained by the uncanny ability not just to produce the same with less, but to constantly innovate — that is, to invent completely new goods and services that the rest of the world soon finds to be useful and desirable. The iPhone, iPad, Microsoft, the Internet — these were created in America, not elsewhere. The Chinese have many talented individuals compared to the Americans, but why have they not been able to come up with similar inventions? Clearly, they lack a spark that America possesses. And that spark means that the Americans can be expected to throw up game-changing innovations from time to time that will again put them in the forefront.

Even if the declinists are right, and America is in fact on a downhill path, one needs to remember that this is a big country that would take a long time to decline. If Singapore were a big country, I would not be so worried if we adopted the wrong policies, because they would be slow in showing results. But we are a small country and a wrong course of action brings catastrophic consequences within a short space of time. America, on the other hand, is like a huge tanker. They will not simply turn around like a skiff does. But I believe that the declinists are wrong.


The US is a more attractive society than China can ever be. Every year, thousands of bright and restless immigrants are allowed into America, settle and become successful in various fields. These immigrants are innovative and usually more adventurous, or they would not have left their own countries. They provide a constant source of new ideas and bring about a certain ferment within American society, a buzz that you will not find in China. America would be far less successful without them. For centuries, America drew top talent from Europe. Today, it is drawing them from Asia — Indians, Chinese, Koreans, Japanese, and even Southeast Asians. Because the US is able to embrace these immigrants, help them integrate and offer them an equal chance of realizing the American dream, there is a continuous inflow of talent that contributes, in turn, to the creation of new technology, new products and new methods of doing business.

China and other nations will eventually have to adopt parts of the American model of attracting talent to fit their circumstances. They will have to go looking around for talented people to build up their enterprises. That is the final contest. This is an age in which you will no longer have military contests between great nations because nations know that they will destroy each other if they do that. But there will be economic and technological contests, and talent is the key ingredient in those contests.


They saw their future in a world where wealth was generated not by making widgets or cars, but by brain power, imagination, artistry, knowledge and intellectual property. America was back in the game. It regained its status as the world’s fastest-growing developed economy. I came to appreciate fully the dynamism of the entrepreneurial American.


But you cannot have your cake and eat it. If you want the competitiveness that America currently has, you cannot avoid creating a considerable gap between the top and the bottom, and the development of an underclass. If you choose instead the welfare state, as Europe did after WW2, you naturally become less dynamic.


The British won many Nobel Prizes for science. But very few of their discoveries were developed into commercially successful ventures. Why is that so? Long years of empire over two centuries shaped a society in which old wealth and landed gentry were held in high esteem. The nouveau riche was regarded with disdain. Bright young students aspired to become lawyers, doctors and professionals — people who would be admired for their intellect and the use of brains rather than hard work and the use of hands. The US, on the other hand, is a frontier society that did not have class barriers. Everybody celebrated getting rich — and wanted to get rich. There is a great urge to start new enterprises and create wealth. Even within American companies, the young tend to have a bigger say at meetings, and the tremendous effervescence they have is channelled to help the companies become more inventive.


In the early years of their dominance, the Americans had a tendency of acting in a brusque, even arrogant way. The British ran an empire for over 200 years, and had developed, as result, an experienced, polished style of dominance. An Indian civil servant who had worked under the British once marvelled to me that 200 British officers could control 200 million Indians. That was the height of empire. The US became pre-eminent after WW2. They had not had that long period of dominance and so they were still brash in defending their newly won position.

The evagelising spirit that continues to permeat American foreign policy is, in some ways, a legacy of that brashness. Unwisely, they went into Afghanistan after September 11 and tried to build a nation, ignoring the fact that it had not been a nation for the last 30 to 40 years. How do you go about putting the little bits together? It’s not possible.


It is too simplistic to think of the Communist Party as corruption-ridden. In fact, throughout the rebellion, Wukan villagers were careful to declare on their banners that they supported the Communist Party, but were opposed to corrupt local officials.

This has been a common strategy taken by Chinese protestors for thousands of years. They know that opposing the central authority means certain annihilation. So they oppose wrongdoing by local officials while declaring loyalty to the centre. No one challenges the centre unless they are prepared to go all the way and take control of the whole country, which is most unlikely.


Can it control corruption? It can try to keep hands clean at the very top levels. However, The New York Times on 11 November 2012 traced $2.7B in the hands of the Wen Jiabao family. I do not see them being able to control corruption at the local level. Corruption won’t bring the system down, but it is not allowing the system to be efficiently run. When you have relationships deciding promotions or appointments to key jobs and affecting the way policy works, you will get less than optimal growth.

Also deeply ingrained in Chinese culture is a way of doing things that pays little heed to the rule of law or governance institutions. In Singapore, we have to come to accept that we have to be like the West on this — to have legislatures deciding on the wording of laws and then to have independent courts and judges deciding what those words mean. So Parliament can pass any law, but once it’s passed, if a dispute arises, you don’t go back to Parliament and say, “What do you mean by that?” You go to a judge, who says, “I interpret this to mean the following, according to fixed rules of interpreting documents that are based on well-established precedents.”

The Chinese have not accepted this, just as they have not accepted that when you sign an agreement, it’s final. For them, when you sign an agreement, it’s the beginning of a long friendship, and from time to time, as friends, you have to sort our whether one of you is making too much money and may need to cough up more.

This ambiguity is also reflected in the way they view institutions. In China, the man is bigger than the office. So you can be president, but if you don’t have the clout with the military, you’re a different president — whereas in Singapore or Britain or Europe or the US, if you’re president or prime minister, the military heads automatically take orders from you because the institution is bigger than the man.


They are also mindful of the need to avoid the paths that Japan and Germany took. The rise of Germany and Japan resulted in a competition in Europe and Asia respectively for power, influence and resources that led to two terrible wars in the 20th century, and ultimately ended their rise. If China gets involved in a war, it risks internal disturbance, clashes and disorder, and it may go down again — perhaps for a long time. So, for the Chinese, the rational calculation would be, “We’ve waited so long for this opportunity to catch up with the developed world. Why be in a hurry and jeopardise our gradual rise?”


Might we see a much more assertive and nationalistic China in 30 years? Possibly. I see growing nationalism as the first stage of this new China, because the Chinese feel they’ve got muscles. But when they begin to see that there are limits to what they can do, there will be a pause and reflection. There will be a moderation of the flexing of muscles, because they see that doing so does not cause the Americans to leave the region. And they will realize that the more they impose themselves on their smaller neighbours, the closer their neighbours get to America, as an insurance, offering the American facilities for the aircraft carriers to come and visit.


The Koreans and the Chinese may be able to match them individual for individual. But team for team, the Japanese are unequalled.


To believe armaments are all that matter in war is to make the same mistake as the Japanese in WW2. The Japanese thought they could destroy the American fleet and secure a decisive advantage in the war. But American industrial production capabilities were such that they could rebuild the fleet and more. It did not take them a long time to get back on their feet and punish Japan. In the end, it is your industrial capacity that determines your national strength, not the number of ships and guns you have. If you have arms not supported by a solid economic foundation, you may be more prepared for war, but it may well be a war that you have no ability to sustain. The North Koreans will know this. They are not stupid.


To ask if India can achieve what China can is to ask if you can make an apple into an orange. The results of these fundamental differences between India and China are quite apparent. One country gets things done. The other talks incessantly but seldom finds the will or ability to get up and go. India simply does not have the same push or the singleness of purpose that you see in China.


It is with sadness that I make these observations about India. I started out rooting for India because it was a democracy, while China was an autocracy. Then I grew older, and I realized two things. One, that democracy is no magic potion. It does not solve all problems for all peoples. China would not have got to where it is today if it had been run as a democracy. Two, that there are certain fundamental forces at work in societies — especially those with long histories — that do not change easily. India is trapped by almost unchangeable realities of its internal composition and the persistent grip of the caste system.


One might argue, of course, that democracy, being a relatively novel phenomenon in human history, begins somewhere in every region, and that in many places, including a number of Asian countries, it has taken root — or at least appeared to do so — despite a similar absence of democratic tradition. But there is one key difference. On top of not having any prior experience in representative forms of politics, the Middle East also lacks vital social factors that form the foundation on which democracy must stand.

The first is a sense of equal citizenship. This is the idea that you and I, despite all our differences in wealth, social standing, achievement, physical and mental attributes, and so on, are on par at some level for no reason other than that we are both citizens of a particular nation. We possess the same rights and responsibilities that the nation accords to any individual belonging to it. We are legally equal, and morally so as well. This concept necessarily precedes the development of actual democratic practices and institutions. It has to gain acceptance not only in intellectual or progressive circles but throughout society.

What we see in many parts of the Middle East, however, are tribal or feudal systems. In Saudi Arabia, tribal leaders bring gifts to the king once a year. Like in ancient China, the king gives them more valuable gifts in return. The loyalty held by ordinary people is to the tribe — not to the nation, for no nation exists, and certainly not to fellow citizens.


Unfortunately, considerable oil wealth tends to breed populations that believe the world owes them a living. Their governments have the unenviable job of attempting to mobilize the people and to rid them of this debilitating sense of reliance. They have to convince the people that oil wealth does not last forever, even if all the proceeds are kept in a special fund and invested carefully. This is a most difficult task.

Some years back, a Middle East country sent some of its students to study in Singapore, thinking that these students, coming from a new generation, could be changed. That did not happen. They were not here to absorb our culture or our work ethic. They were gallivanting. Singapore was a strange place to them. They thought to themselves, “Let’s have a good time and then go back.” Why should you work when you have such immense wealth lying right beneath your feet?


The country in the Middle East that I know best is Egypt. I stayed in one of King Farouk’s palaces when President Gamal Abdel Nasser Hussein invited me to visit. Nasser was a modernizer who lived a modest life, although he did not succeed in liberating his people. He built the Aswan dam with Russian help, which was a great achievement because it controlled floods and generated power. They flew me to the dam in one of his private aircraft and I stayed a few days — a completely dry and a very silent sort of place. I suppose if you go to the Gobi desert or the Grand Canyon, you may get the same feeling. The only difference is that when you leave the Gobi desert, you will find a bustling society alive and at work. And when you leave the Grand Canyon, you have the American dream being displayed before you.


The Israeli-Palestinian conflict is the biggest problem plaguing the Middle East. It is a running sore that is oozing pus all the time. To end the conflict, there has to be a two-state solution — one state for the Israelis and another for the Palestinians. The Palestinian state must also be economically and politically viable. Its people must feel that they have a reasonable chance of making a success out of their country — only then will they have a vested interest in keeping the peace in this troubled region.

Because of the pro-Israel policy the Jewish lobby has succeeded in forging for America, a hard-line stance is allowed to prevail in the Israel leadership. This can have adverse and irreversible effects on the peace process. By building settlements in the occupied territories, for example, Israeli is slowly but surely annexing land that presumably would be handed over to the Palestinians in any potential deal between the two sides. Ultra-conservatives in Israel believe the settlements bring Israel closer to its rightful historical borders, as laid out in the Hebrew Bible. They believe recovering the land is ordained by God, no less. The settlements represent an unwelcome revision to an already complicated status quo. They are causing the prospects of any possible future deal to become ever more remote.


One country that would prefer to jeopardize any such peace deal is Iran. The Iranian government has repeatedly affirmed its commitment to the destruction of the state of Israel. The predominantly Shiite country sees the Israeli-Palestinian conflict as necessary to its fight with Sunni Arab states to secure leadership of the Middle East — the Shiite-Sunni schism going back more than a millennium. Sunni Arab states are deeply suspicious of Iran because of the hold that Iran has on Shiite minorities living across the region. As former Egyptian President Hosni Mubarak once said: “Shiites are almost always loyal to Iran and not the countries where they live.” Saddam Hussein’s Iraq had been an important counterweight to Iran in the region, but with that counterweight now gone, America is the major roadblock in Iran’s bid to dominate the region.

Iran’s ambitions stem at least in part from how it views itself — as a civilization in its own right, quite separate from the Arab world. Iranians are very proud of their history. I was struck by an answer that an Iranian minister gave to a question put to him on a BBC programme some years back. He said: “There are only two civilization in Asia worth talking about — China and Persia.” That is reflective of how Iranians think. They hanker after their glorious years of empire.


President Obama has said he wants to amend political donation laws to curb the power of lobby groups with a lot of cash. Could that change the dynamics somewhat?

It won’t happen. Even if he wanted to do it, he would find it very difficult to get it past the Senate and the House of Representatives.


Laws and policies, unfortunately, do not change as easily as global circumstances do. Entitlements, once given, are notoriously difficult to take back. There is a tremendous penalty in votes for any government that has the guts to try. Margaret Thatcher of Britain used what political acumen and capital she had to try to reverse the policies. In the end, she succeeded only in half-reversing them. The other European leaders must have watched and seen her partial success. But they faced electorates that were in no mood to give up what had already been taken for granted over the years. The problem had become entrenched for many of these European countries.


The most pernicious effect of the welfare state, however, lies not in its inflexibility or its unaffordable nature but in the negative effect it has on the individual’s motivation to strive. If the social security system is designed so you get the same benefits whether you work hard or lead a more laid-back lifestyle, why would you work hard? The spurs on your hinds are not there. The self-reliant attitude is more common in America because even as the unemployed are offered a helping hand, there are measures in place to make sure they are actively encouraged, even compelled, to find work.


Unions and socialist parties in France and its neighbouring country have done their best to perpetuate the myth that workers can hold on to their former benefits without the economy suffering too much. Students are demanding, as a right, the same job security that their parents enjoyed. In other words, they are demanding that the world stands still for them. What they do not realize is that these measures will eventually hurt the working class itself. Companies penalized for retrenching react rationally by moving much more cautiously on hiring even when the economy starts growing again. The jobs simply go elsewhere.


But how do you change these policies now? You have unions marching through the streets of Paris, who will not buy the argument that global competitive forces have rendered the French workforce uneconomic, and that they have to give up their frills. They would say: “No, we keep these frills and try and compete.”


Bitter years await Europe. The Europeans have chosen to go down the path of welfare and labour protection due to the unique historical circumstances they were in. Nobody can deny that their choices have resulted in kinder societies, with less of an underclass and a smaller gap between winners and losers when compared to America. But it has come at a price. If they were to forgo these policies, their GDPs would probably grow 1 to 3 percent faster each year. For some time, life will remain comfortable for many Europeans because they have reserves built up from the good years. But whether they like it or not, the comfortable and cosseted post-war world they have created for themselves will eventually be done in by external forces. A new social contract will have to be negotiated.


However, the angst has gradually shifted away from the Chinese to the other ethnic groups because the Chinese are more self-effacing and are seen as giving the least trouble. Many among the first generation of Chinese migrants were restaurateurs and their children became professionals. The attention these days is more focused on the Indians, Pakistani and Bangladeshis, who tend to live together in certain neighborhoods in large numbers. There are schools that are completely dominated by ethnic minorities because the immigrants have not intermingled.


All the signs point to the impossibility of integration. They have so far failed to make a single currency work and are not likely to progress to a single foreign policy stance of a single military. They have individual histories, each going back many centuries. Each nations is proud of its own traditions. Above all, they want to keep their languages alive — there is glory and literature behind it. America decided to start afresh and create a new literature, but Europe will not be able to do so. Even though English is already the second language in all the other countries, those on Continental Europe will never accept it as the single working language.

What then will be Europe’s place in the world? They will be smaller players on the international stage. Most of the European countries will be treated — quite rightly — as ordinary small states. Germany might be able to carry its weight alone, thanks to its population and its economic success, although it will not want to raise its head above the parapet because it is still filled with guilt for having killed 6 million Jews during the Holocaust. The British will retain some influence because of their special transatlantic relationship with America.


We will lose our shine and become nothing more than a dull little red dot, if we tell ourselves: “Look, never mind. Let’s just be an ordinary city. Why should we try to be better than other cities or countries?” I will be very sorry for Singapore if we ever went down that road.


The biggest problem with the two-party system is that once it is in place, the best people will choose not to be in politics. Getting elected will be a dicey affair. Fighting campaigns will also tend to become unnecessarily uncivil, even vicious. If you are talented and doing well in your career, why would you place so much at risk — not only your own interests but your family’s too — by standing for election? You are more likely to prefer to stay out of the kitchen and in your comfortable life.

Already, it is a Herculean task at each general election for us to convince the best and most committed to stand. Because the country is doing well, it will become very difficult to find people prepared to give up perfectly good careers outside politics. How much harder it would become if we turned into a two-party system!


In Britain, if you look at the First Class Honours list of Oxford or Cambridge and trace their careers, you will find that these people end up not in politics, but in banking, finance and the professions. The frontbenchers in Parliament are often not from the top tier. They are not drawn from the best lawyers or surgeons. The same forces are at play in America. The CEO of a Fortune 500 company has a much better life, and the post would naturally attract more able candidates than those vying to become the president of the US. But the difference between Singapore and those countries is that they will continue to do well despite an average government, but we will not. This is a small country with no natural resources and in the middle of a region that has been volatile historically. Special leadership is required here.


Empirical evidence tells us that immigrants do not boost our fertility rates because they have as few children as Singaporeans do. They replace the young adults that we are short of, but do not have enough children to replace themselves. Each generation of immigrants, therefore, represents not a permanent fix to the underlying problem, but temporary relief. A never-ending stream of immigrants is required. What we really need in order to change the game is therefore a willingness to consider a different lifestyle and to have more babies.


I have seven grandchildren in their 20s and none of them is married. I doubt any of them intends to get married until they are in their 30s, by which time it may be too late to have many children. The choices they make are not very different from those of many of their peers. It is a different generation that holds different expectations of life. Unfortunately, as each person makes decisions according to his own rational set of calculations and his own outlook or worldview, society as a whole is ambling towards a dangerous place. The implications for Singapore are quite stark. Is there a country in this world that prospers on a declining population? If I had to identify one issue that threatens Singapore’s survival the most, it would be this one. I cannot solve the problems and I have given up. I have given up the job to another generation of leaders. Hopefully they or their successors will eventually find a way out.


Q: I think the large majority of unmarried people want to get married. It is just that they, for whatever reason, are not able to find the right partner.

A: The “whatever reason” is that they have a comfortable life. They can support themselves and can afford to wait for the ideal man — preferably someone who is earning more than them. And he doesn’t appear, and they remain unmarried.


And without top-quality Singaporeans, this place would not be the same. Without my generation, there would be no such present Singapore. It’s Goh Keng Swee, S. Rajaratnam, Lim Kim San who helped build this place. In today’s world, they would probably go to America and get a job with Microsoft and not come back.


That’s one big reason. But how about a sense of patriotism, or a sense of having something to contribute to the land?

You’re talking about a globalized world. The world is their oyster.


How come the trust of the army was transferred onto Deng after the death of Mao?

Because Deng was part of their Long March struggle, and they knew Deng, and they knew that Deng was a great man, a sincere man for China and they trusted him. And Hua Guofeng was easily pushed aside in a friendly way at first, just made president. So when I visited him, he made me see Hua Guofeng first and him next — correct protocol.

The position didn’t matter. He was Deng Xiaoping. And the army and a large part of the administration believed that he could save China.


And a more peaceful world if you take the big picture?

Yes, that is because of the nuclear deterrent. The nuclear deterrent makes wars between big countries impossible. However powerful the Chinese can be, they will never attack America or Russia so that stabilizes the situation. And France has got Force de frappe, which may not be enough, but still, symbolically, they can also hit back. If you mean, by a better world, that we are all better governed — not necessarily, depends on the countries. I would say in many parts of the world, in Africa, maybe in Latin America, they are worse off than before. The corruption is horrendous. And even in India, PM Singh was attacked for allowing corruption. It is endemic now. I am in power. Power means I can make money. So when I am out of power, I would have money and that gives me power, so I grab it. In that sense, the Chinese are also in danger because the corruption is becoming very serious.


It depends on what you think life is about. I mean, if I want to lead a happy personal life, then I would have remained a lawyer and a businessman and today I would be very much wealthier than I am. But I did not set out to do that. I saw a situation which I thought was wrong and I sought to put it right and I have the satisfaction of seeing better-fed people, better housing, everybody owning their own home, everybody having children who go to school, better health services, recreational facilities, all they could ask for in life. The problem is they now take it for granted and they believe that we can go on autopilot. I don’t think so. I think if the government falls into bad hands, bad leaders, it will gradually regress.

To be a leader, you must accept other people becoming rich because you are governing well. I once told that to the party secretary of Shenzhen. I said: “If you want to succeed as a leader, then don’t think of yourself. Create a system where the others can make money and become rich. And you will remain an honest official and relatively poor.” I don’t know whether he followed my advice.


But the belief that France is equal to Germany is one which I don’t know why Europeans believe, since nobody outside Europe believes it. Nicolas Sarkozy can meet Merkel, Sarkozy can outspeak Merkel, but Sarkozy’s France cannot outperform Germany and that is the impression of the world.