JCCI Singapore 50th Anniversary Dialogue

First, I would like to talk about Singapore-Japan bilateral relations. I understand you started working for the Government, exiting the military in 1984, under your father. Your job was in the Ministry of Trade and Industry (MTI) in those days, and I believe you had a lot of interaction with the Japanese businesses and Government. Can you share a little bit of your experiences in those days – how you were looking at Japanese businesses and companies, and how you were trying to build the private sector relationship to improve Singapore economy? PM: When I went to MTI after I entered politics in 1984 to 1985, one of the first things I learned was that Japanese companies were a major source of investments in Singapore, and were important companies here. This had been so since the early days of our independence. We became independent in 1965 to 1966. IHI (Corporation) set up a shipyard here, together with Sembawang, and became Jurong shipyard. Today, Jurong shipyard operates a huge mega yard at Tuas. It is completely transformed from what it started off, but it is still there. Later on in the 1970s, other important projects came in. Matsushita Electronics, for example, had many entities in Singapore, many different factories. I visited several of them, including the compressor factory in Chai Chee. At that time, they had made several hundred million refrigerator and air conditioner compressors, used all over the world. By the time they finished, I think they had made more than a billion compressors in Singapore. And today, the global headquarters for the compressor part of – now not Matsushita, but Panasonic’s – operations still in Singapore. Seiko came to Singapore, I think the Managing Director was Mr Hattori. I do not remember him, but my father knew him well. He set up a watch factory in Singapore, because he could find workers here who were meticulous, precise and could meet the high standards, which Seiko demanded. Today, Seiko no longer makes those watches here, but they have their R&D centre here. This was all in 1970s. In the 1980s, we had
Sumitomo chemical, and they set up petrochemical plants here – Petrochemical Corporation of Singapore (PCS). Mr Hasegawa was the CEO and I met him. They set up the plant. It was a very major project for Singapore because from refining petroleum products, we went downstream into petrochemical products. They set up in Ayer Merbau and Ayer Chawan, one of the islands in Jurong. Now, we have joined all the islands together, and it has become Jurong Island. The plant is still there, and Sumitomo is here with their regional headquarters. I learned how important Japanese investments were to Singapore and how over the years, they evolved, grew, and adapted themselves to the more advanced conditions in our economy and the different demands in the world, and still remain here today. Ken: Did you set any conditions when you invited Japanese companies or businesses into Singapore, like technology transfer or training? PM: I do not think we had technology transfer requirements. Basically, we wanted them to come invest and create good jobs. We hoped that in the process, they would train their people and our people would gain skills, which would be valuable, and which was so. Because we took this attitude, we were able to get Japanese companies come and invest in Singapore readily, and then they were profitable. Then, more Japanese companies came. After I went into MTI – in 1985 – we ran into a severe recession. We took very drastic measures. Our GDP went down, became negative, for the first time ever. Ken: What was your analysis back then? What was the cause of the recession? PM: We felt that we had allowed our costs to go out of line, and allowed wages to rise too fast. It was alright when the conditions were favourable, but in 1985, there was a downturn in all of the newly industrialising economies in Japan, in Korea, Taiwan and Hong Kong. We felt it most severely because our costs had been very far out of line, so we had to make a very drastic correction. Ken: So your wages went up before your industry made the transformation necessary. PM: In fact, as a matter of policy, we had encouraged wages to go up in order to encourage the industries to transform themselves as an incentive, but we went too far. So we went into the recession, made the correction, and cut CPF drastically. Wage costs came back down. One of the first things I did after we made this package of measures was to go to Japan to do investment promotion. Ken: What was your selling point, compared to other countries? PM: My selling point is that in a recession,
we can work with the unions to cut costs. And so you can have confidence in us, come and invest in Singapore. I was very happy that we did have good investments come out of that trip. Ken: At that time, was your education system as good as it is now? In other words, did your labour force have a decent quality back then? PM: Not as well educated as now. The education system was not as comprehensive and as targeted as it is now, but our workers were very dedicated and hardworking, and they were very cohesive. They worked together with union leaders. The union leaders worked together with the Government and employers, so the employers could rely on them. Even then, they were the best workforce in the world according to the very savvy, and we have maintained that position since then. Of course, since then, the education and skills level has gone up enormously, and the continuing training of the workers has
also gone up a lot. Not as much as we need to, but we are doing much more now than before. At least in some of the Southeast Asian countries, you probably already have an advantage. Yes, but we are now therefore in a different market segment and competing with other countries. The Chinese technical and skill levels are very high and their costs are lower than ours. Now with flexible manufacturing, 3D printing, and de-globalisation tendencies, there is more incentive for companies to stay in the developed countries and manufacture there, to some extent in Japan, but certainly also in America and Europe. We have to compete with them, their skill levels, and their advantage of having the market there and not having that international transportation and transnational barrier. We have to be better. Yes. Actually, there is proof that Singapore keeps getting better, which was announced this week by the World Economic Forum. I would like to congratulate you on ranking first in the world in terms of competitiveness. Thank you very much. We try to stay there, but the competition is very fierce. Sometimes we are number one, and sometimes we are number two, but we try to stay somewhere near there. In contrast to the US, which is number two, and Japan, which is number six. Could you share a little bit what you think about Japan now, compared to what you thought about Japan 20 years ago? I think 25 years ago is a good comparison. 25 years ago is when the stock market was still very high. 20 years ago was after the bubble economy, but 25 years ago, there was enormous confidence, your growth was still – for a developed country – I think about three per cent, and it was very respectable. There was a certain confidence your companies were looking outwards, investing all over the region. I think to a certain extent, there may have been some hyper-confidence. You were buying things like Pebble Beach and Rockefeller Centre. Good old days. Good old days. But it was an economy which was confident. You were generating new technologies and you were causing the little geese to follow you in the economic development. You were the Mother Goose. Korea, Taiwan, Hong Kong, Singapore – these were the flying geese in the NIES (Newly Industralising Economies). After the bubble economy burst, you had a very long period where you tried very hard to get the economy to stabilise, grow again, and (find) the confidence to grow again. We call it two lost decades. It was a very difficult problem and I think many countries did not understand how challenging the conditions were for Japan. Eventually, Mr Abe came back and with his three arrows, I think he has succeeded in changing the mood, and in getting the economy, although not growing very rapidly, stabilised. In terms of per capita income, your record is not bad. In fact, because per capita income on a national average basis is growing. It is not declining? No, it is growing – per capita. Yeah, a bit by bit. But already from a very high level. If you live in Tokyo, you do not feel that there is hardship, because the shops are operating, the standard of living is high, people are courteous, and they have work. I think the difficulty for Japan is that your population is growing old, your working level population and workforce numbers are shrinking. Therefore, the overall GDP number does not look like it is going up. But actually per capita, it is okay, not worse than other countries. But there is a change in the mood of country when that happens. Your towns and villages, you find it is depopulated, and in fact, some of the villages are closing down. That sets a different perspective on how optimistic you are, and how you see the world. Ken: Today, if there is something you can learn from Japan, is it possibly Japan’s failure for the past 20 to 30 years, or a hard lesson that Japanese are learning from the past? PM: No, I think we learn from how you adapt to this ageing of the society, because what is happening to you will happen to us. Because our population growth, our procreation numbers – not enough children being born – and so our populations are also ageing, and we are maybe 15 to 20 years behind you. Where you are now, one in three of your people are elderly. We are about one in six or one in seven. In 15 years’ time, we will be like you. We are looking carefully at all the things you do and all the technology you invented – devices for old folks, spoons and forks which old people can use, and machines to give old people baths and showers. All sorts of very clever devices which make life more pleasant and practical for old people. We need to learn. These are the things you invent. Can we use them? What can we invent which we will need? That is one aspect. I think another aspect of ageing is the companies. Because it is not just what you sell, which you have to sell to old people, but also how you organise your company and your workforce. Many of your employees will be older people. Your companies have been very good at adjusting the jobs, requirements, and even the technology, so that old people can be productive and can keep on working. I think we need to do a lot of that. But apart from the ageing population, I think we also look at the way the Japanese people react when you have a crisis – when you have an earthquake or a typhoon. We watched what happened after the Kobe earthquake and people queued up in very orderly way for assistance, for food, for shelter, and again after the Fukushima earthquake. So, your ability to absorb natural disaster and for the society to stay together and have that cohesion is very impressive and we need to learn. Ken: I think Singaporeans have learned about that aspect of Japanese quite well for the past 50 years. PM: We are still Kaizen, not arrived yet. Ken: I think probably these days Japanese
are learning from Singaporeans about how cleanly people could make on the streets. PM: I am not sure. When I go to Tokyo, Tokyo is cleaner than Singapore. Ken: Do you think so? PM: Yes, because when you smoke a cigarette – some Japanese people still smoke cigarettes – they do not throw it on the floor. They carry it until they can find a dustbin. Singaporeans have not all learned that yet. Ken: Thank you for a compliment. Looking at the businesses, what kind of business investments are you expecting these days, and how different they are today, compared to 25 years ago? PM: I think the technology level is much higher, and also the investments are not just because of Singapore, but they are to do with your operations in the region. Like PCS, for example, they are here not just because of the operations here, because in fact, they sold a petrochemical plant already, but because they have operations throughout the region and the headquarters are here, they do research and development lifecycle. Or maybe your financial institutions are here. Not just traditional banking, I think we are also having a lot of FinTech activities here. We hope that Japanese FinTech companies will also come to Singapore. It is manufacturing, it is services and regional operations. These are the activities for the future, and activities which can thrive in a country here, where we do not have a lot of surplus workers, but we have skilled disciplined employees, and where you can bring together employees from all over the region to work in your plant here. If you set up a bank here, you can bring employees from China, Korea, Vietnam, Indonesia, India, and the West, and you can have 20 to 30 nationalities in one place. In Tokyo, you have a very big financial centre, even bigger than us, but not so international in the orientation and composition of the people in the financial industries. Ken: Language is a big consideration, and
Singapore has been very successful in adopting English as a national language. PM: It is our working language, so all the
Japanese companies here speak English. Thank you. Ken: Yes, that is a major difference actually
compared to other countries. PM: Yes, that is true. At the same time, it makes us more open, so we are quicker to pick up trends from overseas. But when you have problems from overseas, they also can come here quicker. We do not have that insulation. Ken: I would like to talk a little bit about challenges that both Japan and Singapore are commonly sharing and facing. One of them is actually the ageing population and fewer kids. Actually, I heard the Government is initiating blind dates among younger people in Singapore. What is your comprehensive strategy to cope with this? PM: The Government has been encouraging matchmaking amongst young people so as to improve their chances of finding a suitable partner. I do not know whether they do blind dates, but they used to do many activities. Nowadays, we have outsourced this. We encourage it, but there are many private companies doing matchmaking – some online, some offline, some do blind dates, some cruise to nowhere, some play games together. I think they are playing a useful role. Ken: On a more serious note, we are aware as a Japanese that our birth rate went down because of the hardships that potential mothers have faced, especially working women, in finding daycare centres and going back to the place they used to work in. Those problems have been identified as a major cause of the lower birth rates. How about in Singapore? What is your analysis of the cause? PM: I think the fact that mothers are educated and wish to have their careers and many of them are working is a factor, because they are not just staying at home. If they are working, they have to assess the impact on their careers and whether they can manage to have children and work at the same time. Many mothers do, but some feel that this – and I can well understand – that this is not easy to achieve . We have tried very hard to make it easier to be a mother in Singapore, in terms of flexible employment practices, so that if you need time off or flexible hours, you have time to look after your kid. We have worked very hard in terms of infant care and preschool childcare, so that the mother can go back to work after the first couple of months and
will not be trapped at home. We have also made sure that there are good schools and good employment opportunities. So when people look forward, they can see that there is a future for their kids. They can get educated, it is economical, they can get jobs and they have good opportunities ahead. We have also made sure that people can have very affordable housing. In fact, in Singapore, nearly everybody books and buys his public HDB flat, before he sets up his home. It is the first thing they do as a couple. They register, then after they have registered, they go and book the flat. And then they may not live together until the flat is ready, then they hold their wedding ceremony, pour tea, and then they move into their new home. Because they want to have their own home, they may not like to live with their parents. But that is fine. We are able to provide and I think that is an important reason why young people are able to have kids. I think our challenge is that one third of young people do not marry very soon. Even until the mid-30s, maybe one third are not married. In our society, if you are not married, that also means you are very unlikely to have a child, not like in Europe or America where if you are not married, you often do (have a child). Ken: That is a French strategy actually. PM: It is a French approach but in the West, many countries are like that. We are not like that. And so only two thirds get married by the mid-30s, and they have about two children each but that is not enough, because the people who did not get married are not doing their share. Ken: How are you factoring in the immigration policy in your demographics strategy? PM: They are an important flow. They are important both for the numbers, and also because you bring in diversity and talent. Every year we have about 35,000 babies born who are Singaporean babies, and we have about 20,000 new citizens who are immigrants, and about 30,000 new people who get permanent residence in Singapore. Our own people about 35,000, and about an equal number come in as permanent residents. Out of those mostly, maybe 20,000 plus become citizens. So the inflow is not quite half, but a very significant inflow of the next generation. Ken: So you are managing to keep the population growing. PM: The population is still growing slightly, but we think that by four or five years’ time, it will level off and if the birth rates do not improve, it may later on start to decline. Ken: That is kind of counterintuitive to me. If you let immigrants keep coming in, you can probably keep your population growing. PM: No, but I have three and a half million
citizens. If every citizen lives 80 years, I need 44,000 new babies a year. I only have about 32,000, so I need 10,000 more babies. Ken: You cannot stop ageing. PM: It depends on what the population trends are like, but I think what will happen is that the population will decline up to a point and if I can maintain this number of this birth rate, then hopefully I will be able to stabilise. But best of all, if I can increase the birth rate, then the population can grow a little bit. That will be even better because we have so many plans for Singapore in terms of new industries, new businesses, new schools, new opportunities, new towns to live in, new parks, and new society to be built in the next generation and what you need are new people – our children. Ken: One other aspect of maturing of an economy is… I believe most people would agree that Singapore has completed its catch up work with the advanced economies, maybe already 10 years ago, because Singapore already surpassed most of the countries in terms of GDP per capita. So what is the next goal or a sense of aspiration for Singaporeans? I interviewed your predecessor, Mr Goh Chok Tong in the early 1990s. He said, that one of the most important jobs for the government is goal setting and aspiration setting. Would you agree? If you do, how are you setting a national goal or a national sense of aspiration these days? PM: I think if you just look at it quantitatively per capita GDP, you may not get a full picture, because in the big countries like Japan, you are going on a national average. It is not just Tokyo, but also Hokkaido, and not just Sapporo, but also very remote parts of the islands. In Singapore, we are only compared to Tokyo. If we compare to Tokyo, I suspect Tokyo’s per capita GDP is higher than ours; certainly New York, London would be higher than us. Therefore, there is still room for us to grow. We will not grow very, very rapidly, we hope we can do two to three per cent a year. But if we can sustain that, then there is a possibility for us to make a high quality of life in Singapore, not just for the top 10, 20 or 30 per cent of the population, but for the majority of the population in Singapore. Today, 80 per cent of our students complete secondary school and go on to post-secondary education. So they have technical education, or maybe Polytechnic or University. But that 80 per cent of the population has that potential to hold skilled jobs, and to have career progression and advancement, and to learn new skills as they go along. We want to make an economy where they can do that and a big part of the population can look forward to that. Because if you look at the developed countries, the average may be high, but there is also a significant part of the population, where they do not feel that they have the same opportunities as the top elite. And we do not want to be in that kind of a situation. We want to make sure that there are opportunities for everybody, including those who may not have done very well in school, to continue to improve themselves in their lives. Ken: How is the situation of equality in Singapore right now? Is it worsening or stabilising? PM: If you compare with 20 years ago, I think it is probably somewhat less equal. If you compare to 10 years ago, I think it is about the same or even a little bit better. There was a phase when the inequality widened around the time of the Asian financial crisis. After that, it stabilised and with government measures, like Workfare, which is basically a negative income tax, and ComCare, which is a social assistance for the lower income, with our housing schemes, and our public health, and so on, we have been able, substantially, to mitigate the inequality and in fact, to improve things. Ken: One thing I noticed when I was living in Singapore several years ago, is a very harsh education competition for the kids, especially when kids are 10 years old, because exams kind of defined their lives going forward. That is probably creating kind of a sense
of inequality, among the people. PM: I think you put it too harshly, I would
say it is keen competition. The examination, which you are talking about – the Primary School Leaving Examination (PSLE) – is at 12 years old, and it does not determine their life. It does have a big influence on which secondary school they go into, because that is how we decide who can go into a secondary school. But whichever secondary school you go into, there are many pathways forward and you can go on to university if you do well. Or even if you do not do well, you can go on to Polytechnic or the ITE and later on, you can still go on and get a university degree. So it is not true that the PSLE determines your life. Ken: I am sorry. PM: Maybe you are slightly out of date. We have improved and we are going to improve it a little bit more because we are changing the PSLE scoring system. Up to this year, the scoring system is very precise – you compute every single mark, in fact, to two decimal places and compute and kind of weighted average. That determines your secondary school. You compared so precisely, but I do not think you can really measure people like that, because these are human beings, and it is not possible to say he is 101.12 and this one is 101.25. There are so many dimensions you have to compare. We are going to redo the grading system to make it blunter, less finely discriminating. And I hope that parents and children will be less obsessed with pursuing that last half mark in the exam. But I think they are still very anxious. This year, the mathematics paper there was one question, which was a bit difficult and some parents got very anxious about it. Ken: I understand, I used to have a young kid many years ago. They are in college right now. Let us move on to some global questions. I think you would agree that the post-Cold War world order is changing dramatically, especially after Mr Donald Trump became the President of the United States. What is happening? Probably many people would agree that Mr Trump is initiating anti-multilateralism and anti-free trade. He unilaterally exited from the Trans-Pacific Partnership, for example. Meanwhile, there is Mr Boris Johnson, who became Prime Minister of the UK, who is also declaring that he dares to conduct Brexit, no matter what. There is this big moment of anti-globalism here. I think I have read somewhere that Mr Ian Bremmer points out this is because there are many people who are being left out, left behind, and harmed by globalisation and free trade, especially free trade and free immigration. So the trend is against free trade in general, generally speaking. I would like you to share how you worry about these developments in this world. PM: We are concerned with the direction things are going. I am not sure about the diagnosis that it is because globalisation and free trade, which have brought this about. Certainly, the changes in the trade patterns in China’s engagement with the world and the large increase in their exports to many countries has led to significant changes. But there are also major changes which are within each country, for example, from technological developments. If we talk about coal mines, the coal mines have not been wiped out because the Chinese are exporting coal to America; the Chinese are not exporting coal to America. But the Americans are fracking, producing natural gas, and that is what is making the coal mines uneconomic and therefore the coal miners lose their jobs. These are very powerful technological changes, which are continuing. People do not fully understand them but they feel the impact and they blame it on something. Mr Trump does not say that he is against the free trade. He says he is for free, fair and reciprocal trade. But what exactly that means, that depends on how his trade negotiator carries out their mandate and they make many requests of their counterparts. They are negotiating with China, but they also have been negotiating with Japan. The result of this is that we are going to have uncertainty in the global trading system. I think global trade has already slowed down; the global economies are also slowing down. It is not good in the long term because if we do not have that free trade, and we divide up into your world and my world, your technology and my technology, then it will be your bloc and my bloc. I have my friends and you have your friends, and I may or may not be your friend. I think it is a very unstable world, an unhappy world. While America has this position that Mr Trump says globalism, he doesn’t believe in that, he says put your own country first, there is some of that sentiment elsewhere too. I think other countries need to work together to continue to do multilateral cooperation, like the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), which Mr Abe has taken a lead role in making it happen. We hope we can do other groups as well like the RCEP (Regional Comprehensive Economic Partnership) in Asia, or like between Singapore and Europe, we are having the EU-Singapore FTA. I have just come back from Armenia, where we signed the Singapore-Eurasian Union FTA, with Russia and its group of countries like Kazakhstan, Armenia, and Kyrgyzstan. So I think (with) a network of these arrangements, we hope we will be able to hold a position until the global mood changes. Ken: Are you still optimistic about RCEP, and do you think Japan and Singapore together have some role to play to advance? PM: Yes, we are still working hard at the RCEP. It has taken quite some time. We hope that we will be able to reach the finish line. I believe that there has been progress being made. We have not got there yet, but I hope we will get there. Japan has a very important role to play because this is a group, which does not coincide with the CPTPP, and Japan is a big participant in the RCEP. If you lean forward to make it happen, there will be a strong incentive for other countries to participate and to join in too. Ken: Some countries, especially I think India, is strongly sceptical about the current proposal. PM: They have expressed their concerns. India’s perspective is that they are worried about their goods, the balance of payments, balance of trade goods, and particularly they are worried about their competitiveness compared to China, because China has a big trade surplus with them. In fact, the Indian elephant God – Ganesha – all the Ganeshas are made in China. Ken: I did not know that. PM: Yes, so they are very worried that if there is a free trade agreement, maybe more things will come from China and they will not be competitive. They have to work out between them what are the safeguards and how to phase it in. But the Indians want the services part, they think they have strengths and they would like to export services. This is something which is actively being discussed now. Ken: I recall, Singapore used to have a large trade deficit against Japan, in 80s especially, probably in 90s as well, but you moved to have free trade agreement (Japan-Singapore Economic Partnership Agreement) with Japan in early 2000s, despite you having a very big deficit. It proves that free trade actually develops your industry. PM: Yes, absolutely. Our view is the orthodox economist’s view, which is that the bilateral surplus or deficit is meaningless. The global surplus or deficit means something, but it does not mean whether you should have free trade or not. It means that your macroeconomic balance is not fully in balance for some reason – your savings could be higher than your investment, then you have a trade surplus; your savings less than your investment, or your consumption is less than your production, then you have a trade deficit. So it reflects macroeconomic factors. If you have a problem with the trade deficit, you have to address those macroeconomic factors. Not having a trade agreement does not help you solve a trade deficit, especially a bilateral one. Ken: I think Mr Trump has a different view. Right? PM: No, he just has a different perspective.
He does not accept this. Ken: If he has any perspective at all. PM: No, I think he does have a view on trade and he has taken this view for a very long time, long before he became president. Ken: That is true. But do you think the current tension between the United States and China is about trade? I think it is about more about political power or hegemony. PM: I think there are different elements in it. It has developed because China today is so much bigger and significant in the global economy than it was 20 years ago when it joined the WTO in 2001. But the unhappiness in America, Mr Trump’s starting unhappiness was the bilateral trade deficit. That is what he focused on. But now he has broadened beyond that – his trade negotiators, his Commerce Secretary, they are talking about intellectual property, forced technology transfers, all sorts of trade related issues. So on the trade front, it is not just trade, the SOEs (state-owned enterprises) as well. But actually there are also other people in the administration and other people in America as well, who see this as not just trade and see this as tussle for dominance. Is it wise for America to cooperate with China when China is growing stronger, and may one day, very likely, become bigger than America? Therefore, some of them hope to use this trade issue as a way to slow down China’s growth and to hold back China. I do not think they will succeed and I do not think that is wise. Ken: You just came back from the United States, and you took a couple of interviews with American media. PM: Yes. Ken: You said very interesting things in the Washington Post interview that China also has to take their share of responsibility. Could you elaborate what kind of responsibility China should take these days? I mean, China is different from 25 years ago. PM: For example, on the trade, to start off with, when they entered the WTO in 2001, their trade was maybe 4 per cent of the world trade. Now they are about 13 per cent of the world trade, 14 or more. And so the concessions which countries made to them in 2001, today become no longer politically sustainable because the impact is so much greater. Frankly, China is so much more developed today – their GDP has gone up three, four times since 2001. What they needed, because they were backward in 2001, they are no longer appropriate for them today in their more developed status, and therefore, it is necessary to recalibrate the terms on which they are engaging into the global economy. That means things like intellectual property, protection for the markets, the rules which they are able to abide by and commit to. These are adjustments, which have to be made by China, partly in order to maintain sound relations with other economies, but partly because it is in their own interest as they develop, to adjust policies to the status of development. I think they have done some but I do not think that they have done enough. Ken: Does that include the political system? PM: I think the political system is a different thing. It is very difficult to tell another country, you have to change your political system because you are a developed economy. I think each country must decide what is its
own best political system. I think for us, for example, to tell the Americans that their political system is good or is no good, would be very presumptuous of us. Similarly, if we were to tell the Chinese their political system is good or no good, is, it is not possible. We cannot take responsibility for any recommendations which we make to them. Ken: Are you watching Hong Kong’s situation? PM: Yes, we read the newspapers. Ken: Are you worried? PM: Yes, we are worried. Ken: What is the worst case scenario? PM: Well, I think it is a very grave situation which they are in because there is a very deep split in the society, in the attitudes. There is deep unhappiness; unhappiness, partly because they are part of China. It is one country, two systems, and some of the Hong Kongers wish that they were just two. That is one element of it. Another element of it is because the Chinese economy’s influence on Hong Kong is so pervasive. They (Hong Kong) used to be the successful and more advanced ones, and the Chinese used to be the less prosperous ones and the poorer cousins. Now, the poorer cousins are not poor anymore. They are many and when they come as tourists, they are very visible so the Hong Kongers have a reaction to that. I think the third one is domestically within Hong Kong. They want to have the government reflect their interests and concerns more. They do have some very difficult issues to resolve. Social issues like housing, issues of jobs, medical care, and education. These are very fundamental things where Hong Kong, I think they feel under great stress. As a result, it has all come together in these demonstrations. It was triggered by the extradition legislation, but I think they are not interested in the extradition legislation anymore. That is dead. Ken: That is right. Does the situation have any implication on Singapore? PM: It is bad for us. I mean, it is much better for us when Hong Kong is prospering, stable, we cooperate with them, we will compete with them, they will do business and we will do business with them and with China. This way, the instability affects the whole region. The lack of confidence will infect the rest
of the region as well. Ken: Okay, thank you very much. We are about to run out of time, but we have still, a couple of minutes. So, I’d like to take a couple of questions from the floor.If you have any questions, could you raise your hand? Okay, I see a gentleman sitting on the second floor. Could you give him a microphone? Please introduce yourself. And pose a question to the Prime Minister. Q: Good afternoon, Prime Minister Lee. I would like to learn Singapore’s strategy for further development of the start-up segment, and also Singapore’s expectations on how Japanese companies can be part of such development. PM: We would like to develop our start-up industries. We see it as an important element in the economy. It may not be a big percentage of the GDP but it generates vibrancy, new ideas, and the potential for new companies to emerge. If you are very lucky and very shrewd, you may produce one unicorn once in a while. What we are trying to do is to create an environment where it is easy for people to start companies, where people would like to start companies, and where if you start a company, you have all the support you need – the angel investors or venture funds, the infrastructure, incubators, as well as the possibility of taking a company big and either selling it to an established operation or maybe taking it all the way. We have made some progress, we have an incubator called Block71 in Singapore, where there are quite a number of start-ups. Our strategy is not just start-ups, which are by Singaporeans, but start-ups in Singapore and many of them are by foreigners from within the region who come to Singapore, and they have started up companies in Singapore. Some of the companies are not quite start-up anymore, like Gojek and Grab for example. They were start-ups from Indonesia, from Malaysia. They have come to Singapore, they are operating in Singapore and we are happy that it is this way. We hope that more such companies will come and we will have start-ups across a whole range – those which are on e-services, at the same time those which have technical content, and also an important area is FinTech where we have a quite a vibrant scene. Every year we have a FinTech festival and they tell me 100,000 people come to the FinTech festival – it is very big scale. We hope that in time that will produce many fruits. Ken: I actually did a story about those start-ups founded by foreigners in Singapore and they are doing very good. So I think you guys are doing very, very successfully in this regard. PM: We hope that many Japanese companies will hear about this and come to Singapore and take advantage of the opportunities here. Ken: In that happy note, I think we’ve just run out of time. So we must conclude this conversation. But please join me in thanking Prime Minister Lee for his insightful remarks, for this conversation. Thank you very much.

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  1. after viewing pm lee both interviews in US and here, i never realise his ground knowledge is so well, if questions are not pre submitted before interview,this is perfect

  2. JCCI should get someone else to be the interviewer in the future, he is blunt and borderline rude, he makes no effort to have an interaction with the guest he’s having a conversation with but only read from the script, he didn’t do his homework despite the fact he used to live in Singapore, just overall a subpar interview.

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