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Thread: Lee Kuan Yew's View of the World

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    Lee Kuan Yew's View of the World

    March/April, 1994
    Foreign Affairs
    Culture Is Destiny; A Conversation with Lee Kuan Yew
    By Fareed Zakaria


    "ONE OF THE ASYMMETRIES of history," wrote Henry Kissinger of Singapore's patriarch Lee Kuan Yew, "is the lack of correspondence between the abilities of some leaders and the power of their countries." Kissinger's one time boss, Richard Nixon, was even more flattering. He speculated that, had Lee lived in another time and another place, he might have "attained the world stature of a Churchill, a Disraeli, or a Gladstone." This tag line of a big man on a small stage has been attached to Lee since the 1970s. Today, however, his stage does not look quite so small. Singapore's per capita GNP is now higher than that of its erstwhile colonizer, Great Britain. It has the world's busiest port, is the third-largest oil refiner and a major center of global manufacturing and service industries. And this move from poverty to plenty has taken place within one generation. In 1965 Singapore ranked economically with Chile, Argentina and Mexico; today its per capita GNP is four or five times theirs.

    Lee managed this miraculous transformation in Singapore's economy while maintaining tight political control over the country; Singapore's government can best be described as a "soft" authoritarian regime, and at times it has not been so soft. He was prime minister of Singapore from its independence in 1959 (it became part of a federation with Malaysia in 1963 but was expelled in 1965) until 199o, when he allowed his deputy to succeed him. He is now "Senior Minister" and still commands enormous influence and power in the country. Since his retirement, Lee has embarked on another career of sorts as a world-class pundit, speaking his mind with impolitic frankness. And what is often on his mind is American-style democracy and its perils. He travels often to East Asian capitals from Beijing to Hanoi to Manila dispensing advice on how to achieve economic growth while retaining political stability and control. It is a formula that the governing elites of these countries are anxious to learn.

    The rulers of former British colonies have been spared the embarrassment of building grandiose monuments to house their offices; they simply occupy the ones that the British built. So it is with Singapore. The president, prime minister and senior minister work out of Istana (palace), the old colonial governor's house, a gleaming white bungalow surrounded by luxuriant lawns. The interior is modern light wood paneling and leather sofas. The atmosphere is hushed. I waited in a large anteroom for the "SM," which is how everybody refers to Lee. I did not wait long. The SM was standing in the middle of a large, sparsely furnished office. He is of medium build. His once-compact physique is now slightly shrunken. Still, he does not look 70.

    Lee Kuan Yew is unlike any politician I have met. There were no smiles, no jokes, no bonhomie. He looked straight at me he has an inexpressive face but an intense gaze -- shook hands and motioned toward one of the room's pale blue leather sofas (I had already been told by his press secretary on which one to sit). After 30 awkward seconds, I realized that there would be no small talk. I pressed the record button on my machine.

    FZ: With the end of the Cold War, many Americans were surprised to hear growing criticism of their political and economic and social system from elites in East Asia, who were considered staunchly pro-American. What, in your view, is wrong with the American system?

    LKY: It is not my business to tell people what's wrong with their system. It is my business to tell people not to foist their system indiscriminately on societies in which it will not work.

    FZ: But you do not view the United States as a model for other countries?

    LKY: As an East Asian looking at America, I find attractive and unattractive features. I like, for example, the free, easy and open relations between people regardless of social status, ethnicity or religion. And the things that I have always admired about America, as against the communist system, I still do: a certain openness in argument about what is good or bad for society; the accountability of public officials; none of the secrecy and terror that's part and parcel of communist government.

    But as a total system, I find parts of it totally unacceptable: guns, drugs, violent crime, vagrancy, unbecoming behavior in public -- in sum the breakdown of civil society. The expansion of the right of the individual to behave or misbehave as he pleases has come at the expense of orderly society. In the East the main object is to have a well-ordered society so that everybody can have maximum enjoyment of his freedoms. This freedom can only exist in an ordered state and not in a natural state of contention and anarchy.

    Let me give you an example that encapsulates the whole difference between America and Singapore. America has a vicious drug problem. How does it solve it? It goes around the world helping other antinarcotic agencies to try and stop the suppliers. It pays for helicopters, defoliating agents and so on. And when it is provoked, it captures the president of Panama and brings him to trial in Florida. Singapore does not have that option. We can't go to Burma and capture warlords there. What we can do is to pass a law which says that any customs officer or policeman who sees anybody in Singapore behaving suspiciously, leading him to suspect the person is under the influence of drugs, can require that man to have his urine tested. If the sample is found to contain drugs, the man immediately goes for treatment. In America if you did that it would be an invasion of the individual's rights and you would be sued.

    I was interested to read Colin Powell, when he was chairman of the Joint Chiefs of Staff, saying that the military followed our approach because when a recruit signs up he agrees that he can be tested. Now, I would have thought this kind of approach would be quite an effective way to deal with the terrible drug problem you have. But the idea of the inviolability of the individual has been turned into dogma. And yet nobody minds when the army goes and captures the president of another state and brings him to Florida and puts him in jail. I find that incomprehensible. And in any case this approach will not solve America's drug problem. Whereas Singapore's way, we may not solve it, but we will lessen it considerably, as we have done.

    FZ: Would it be fair to say that you admired America more 25 years ago? What, in your view, went wrong?

    LKY: Yes, things have changed. I would hazard a guess that it has a lot to do with the erosion of the moral underpinnings of a society and the diminution of personal responsibility. The liberal, intellectual tradition that developed after World War II claimed that human beings had arrived at this perfect state where everybody would be better off if they were allowed to do their own thing and flourish. It has not worked out, and I doubt if it will. Certain basics about human nature do not change. Man needs a certain moral sense of right and wrong. There is such a thing called evil, and it is not the result of being a victim of society. You are just an evil man, prone to do evil things, and you have to be stopped from doing them. Westerners have abandoned an ethical basis for society, believing that all problems are solvable by a good government, which we in the East never believed possible.

    FZ: Is such a fundamental shift in culture irreversible?

    LKY: No, it is a swing of the pendulum. I think it will swing back. I don't know how long it will take, but there's already a backlash in America against failed social policies that have resulted in people urinating in public, in aggressive begging in the streets, in social breakdown.


    FZ: You say that your real concern is that this system not be foisted on other societies because it will not work there. Is there another viable model for political and economic development? Is there an "Asian model"?

    LKY: I don't think there is an Asian model as such. But Asian societies are unlike Western ones. The fundamental difference between Western concepts of society and government and East Asian concepts -- when I say East Asians, I mean Korea, Japan, China, Vietnam, as distinct from Southeast Asia, which is a mix between the Sinic and the Indian, though Indian culture also emphasizes similar values -- is that Eastern societies believe that the individual exists in the context of his family. He is not pristine and separate. The family is part of the extended family, and then friends and the wider society. The ruler or the government does not try to provide for a person what the family best provides.

    In the West, especially after World War II, the government came to be seen as so successful that it could fulfill all the obligations that in less modern societies are fulfilled by the family. This approach encouraged alternative families, single mothers for instance, believing that government could provide the support to make up for the absent father. This is a bold, Huxleyan view of life, but one from which I as an East Asian shy away. I would be afraid to experiment with it. I'm not sure what the consequences are, and I don't like the consequences that I see in the West. You will find this view widely shared in East Asia. It's not that we don't have single mothers here. We are also caught in the same social problems of change when we educate our women and they become independent financially and no longer need to put up with unhappy marriages. But there is grave disquiet when we break away from tested norms, and the tested norm is the family unit. It is the building brick of society.

    There is a little Chinese aphorism which encapsulates this idea: Xiushen qijia zhiguo pingtianxia. Xiushen means look after yourself, cultivate yourself, do everything to make yourself useful; Qijia, look after the family; Zhiguo, look after your country; Pingtianxia, all is peaceful under heaven. We have a whole people immersed in these beliefs. My granddaughter has the name Xiu-qi. My son picked out the first two words, instructing his daughter to cultivate herself and look after her family. It is the basic concept of our civilization. Governments will come, governments will go, but this endures. We start with self-reliance. In the West today it is the opposite. The government says give me a popular mandate and I will solve all society's problems.

    FZ: What would you do instead to address America's problems?

    LKY: What would I do if I were an American? First, you must have order in society. Guns, drugs and violent crime all go together, threatening social order. Then the schools; when you have violence in schools, you are not going to have education, so you've got to put that right. Then you have to educate rigorously and train a whole generation of skilled, intelligent, knowledgeable people who can be productive. I would start off with basics, working on the individual, looking at him within the context of his family, his friends, his society. But the Westerner says I'll fix things at the top. One magic formula, one grand plan. I will wave a wand and everything will work out. It's an interesting theory but not a proven method.


    FZ: You are very skeptical of government's ability to solve deeper social issues. But you're more confident, certainly than many Americans are, in the government's ability to promote economic growth and technological advancement. Isn't this a contradiction?

    LKY: No. We have focused on basics in Singapore. We used the family to push economic growth, factoring the ambitions of a person and his family into our planning. We have tried, for example, to improve the lot of children through education. The government can create a setting in which people can live happily and succeed and express themselves, but finally it is what people do with their lives that determines economic success or failure. Again, we were fortunate we had this cultural backdrop, the belief in thrift, hard work, filial piety and loyalty in the extended family, and, most of all, the respect for scholarship and learning.

    There is, of course, another reason for our success. We have been able to create economic growth because we facilitated certain changes while we moved from an agricultural society to an industrial society. We had the advantage of knowing what the end result should be by looking at the West and later Japan. We knew where we were, and we knew where we had to go. We said to ourselves, "Let's hasten, let's see if we can get there faster." But soon we will face a different situation. In the near future, all of us will get to the stage of Japan. Where do we go next? How do we hasten getting there when we don't know where we're going? That will be a new situation.

    FZ: Some people say that the Asian model is too rigid to adapt well to change. The sociologist Mancur Olson argues that national decline is caused most fundamentally by sclerosis -- the rigidity of interest groups, firms, labor, capital and the state. An American-type system that is very flexible, laissez-faire and constantly adapting is better suited to the emerging era of rapid change than a government-directed economic policy and a Confucian value system.

    LKY: That is an optimistic and attractive philosophy of life, and I hope it will come true. But if you look at societies over the millennia you find certain basic patterns. American civilization from the Pilgrim fathers on is one of optimism and the growth of orderly government. History in China is of dynasties which have risen and fallen, of the waxing and waning of societies.

    And through all that turbulence, the family, the extended family, the clan, has provided a kind of survival raft for the individual. Civilizations have collapsed, dynasties have been swept away by conquering hordes, but this life raft enables the civilization to carry on and get to its next phase. Nobody here really believes that the government can provide in all circumstances. The government itself does not believe it. In the ultimate crisis, even in earthquakes and typhoons, it is your human relationships that will see you through. So the thesis you quote, that the government is always capable of reinventing itself in new shapes and forms, has not been proven in history. But the family and the way human relationships are structured, do increase the survival chances of its members. That has been tested over thousands of years in many different situations.


    FZ: A key ingredient of national economic success in the past has been a culture of innovation and experimentation. During their rise to great wealth and power the centers of growth -- Venice, Holland, Britain, the United States -- all had an atmosphere of intellectual freedom in which new ideas, technologies, methods and products could emerge. In East Asian countries, however, the government frowns upon an open and free wheeling intellectual climate. Leaving aside any kind of human rights questions this raises, does it create a productivity problem?

    LKY: Intellectually that sounds like a reasonable conclusion, but I'm not sure things will work out this way. The Japanese, for instance, have not been all that disadvantaged in creating new products. I think that if governments are aware of your thesis and of the need to test out new areas, to break out of existing formats, they can counter the trend. East Asians, who all share a tradition of strict discipline, respect for the teacher, no talking back to the teacher and rote learning, must make sure that there is this random intellectual search for new technologies and products. In any case, in a world where electronic communications are instantaneous, I do not see anyone lagging behind. Anything new that happens spreads quickly, whether it's superconductivity or some new life-style.

    FZ: Would you agree with the World Bank report on East Asian economic success, which I interpret to have concluded that all the governments that succeeded got fundamentals right -- encouraging savings and investment, keeping inflation low, providing high-quality education. The tinkering of industrial policies here and targeting sectors there was not as crucial an element in explaining these countries' extraordinary economic growth as were these basic factors.

    LKY: I think the World Bank had a very difficult job. It had to write up these very, very complex series of situations. But there are cultural factors which have been lightly touched over, which deserved more weightage. This would have made it a more complex study and of less universal application, but it would have been more accurate, explaining the differences, for example, between the Philippines and Taiwan.

    FZ: If culture is so important, then countries with very different cultures may not, in fact, succeed in the way that East Asia did by getting economic fundamentals right. Are you not hopeful for the countries around the world that are liberalizing their economies?

    LKY: Getting the fundamentals right would help, but these societies will not succeed in the same way as East Asia did because certain driving forces will be absent. If you have a culture that doesn't place much value in learning and scholarship and hard work and thrift and deferment of present enjoyment for future gain, the going will be much slower.

    But, you know, the World Bank report's conclusions are part of the culture of America and, by extension, of international institutions. It had to present its findings in a bland and universalizable way, which I find unsatisfying because it doesn't grapple with the real problems. It makes the hopeful assumption that all men are equal, that people all over the world are the same. They are not.

    Groups of people develop different characteristics when they have evolved for thousands of years separately. Genetics and history interact. The Native American Indian is genetically of the same stock as the Mongoloids of East Asia -- the Chinese, the Koreans and the Japanese. But one group got cut off after the Bering Straits melted away. Without that land bridge they were totally isolated in America for thousands of years. The other, in East Asia, met successive invading forces from Central Asia and interacted with waves of people moving back and forth. The two groups may share certain characteristics, for instance if you measure the shape of their skulls and so on, but if you start testing them you find that they are different, most particularly in their neurological development, and their cultural values.

    Now if you gloss over these kinds of issues because it is politically incorrect to study them, then you have laid a land mine for yourself. This is what leads to the disappointments with social policies, embarked upon in America with great enthusiasm and expectations, but which yield such meager results. There isn't a willingness to see things in their stark reality. But then I am not being politically correct.

    FZ: Culture may be important, but it does change. The Asian "model" may prove to be a transitional phenomenon. After all, Western countries also went through a period in the eighteenth and nineteenth centuries when they were capitalist and had limited participatory democracy. Elites then worried -- as you do today -- that "too much" democracy and "too many" individual rights would destabilize social order. But as these societies modernized and as economic growth spread to all sections of society, things changed. Isn't East Asia changing because of a growing middle class that demands a say in its own future?

    LKY: There is acute change in East Asia. We are agricultural societies that have industrialized within one or two generations. What happened in the West over 200 years or more is happening here in about 50 years or less. It is all crammed and crushed into a very tight time frame, so there are bound to be dislocations and malfunctions. If you look at the fast-growing countries -- Korea, Thailand, Hong Kong, and Singapore -- there's been one remarkable phenomenon: the rise of religion. Koreans have taken to Christianity in large numbers, I think some 25 percent. This is a country that was never colonized by a Christian nation. The old customs and religions -- ancestor worship, shamanism -- no longer completely satisfy. There is a quest for some higher explanations about man's purpose, about why we are here. This is associated with periods of great stress in society. You will find in Japan that every time it goes through a period of stress new sects crop up and new religions proliferate. In Taiwan -- and also in Hong Kong and Singapore -- you see a rise in the number of new temples; Confucianist temples, Taoist temples and many Christian sects.

    We are all in the midst of very rapid change and at the same time we are all groping towards a destination which we hope will be identifiable with our past. We have left the past behind and there is an underlying unease that there will be nothing left of us which is part of the old. The Japanese have solved this problem to some extent. Japan has become an industrial society, while remaining essentially Japanese in its human relations. They have industrialized and shed some of their feudal values. The Taiwanese and the Koreans are trying to do the same. But whether these societies can preserve their core values and make this transition is a problem which they alone can solve. It is not something Americans can solve' for them. Therefore, you will find people unreceptive to the idea that they be Westernized. Modernized, yes, in the sense that they have accepted the inevitability of science and technology and the change in the lifestyles they bring.

    FZ: But won't these economic and technological changes produce changes in the mind-sets of people?

    LKY: It is not just mind-sets that would have to change but value systems. Let me give anecdotal evidence of this. Many Chinese families in Malaysia migrated in periods of stress, when there were race riots in Malaysia in the 1960s, and they settled in Australia and Canada. They did this for the sake of their children so that they would get a better education in the English language because then Malaysia was switching to Malay as its primary language. The children grew up, reached their late teens and left home. And suddenly the parents discovered the emptiness of the whole exercise. They had given their children a modern education in the English language and in the process lost their children altogether. That was a very sobering experience. Something less dramatic is happening in Singapore now because we are not bringing up our children in the same circumstances in which we grew up.

    FZ: But these children are absorbing influences different from your generation. You say that knowledge, life-styles, culture all spread rapidly in this world. Will not the idea of democracy and individual rights also spread?

    LKY: Let's not get into a debate on semantics. The system of government in China will change. It will change in Korea, Taiwan, Vietnam. It is changing in Singapore. But it will not end up like the American or British or French or German systems. What are we all seeking? A form of government that will be comfortable, because it meets our needs, is not oppressive, and maximizes our opportunities. And whether you have one-man, one-vote or some-men, one vote or other men, two votes, those are forms which should be worked out. I'm not intellectually convinced that one-man, one-vote is the best. We practice it because that's what the British bequeathed us and we haven't really found a need to challenge that. But I'm convinced, personally, that we would have a better system if we gave every man over the age of 40 who has a family two votes because he's likely to be more careful, voting also for his children. He is more likely to vote in a serious way than a capricious young man under 30. But we haven't found it necessary yet. If it became necessary we should do it. At the same time, once a person gets beyond 65, then it is a problem. Between the ages of 40 and 60 is ideal, and at 60 they should go back to one vote, but that will be difficult to arrange.


    FZ: Change is often most threatening when it occurs in multiethnic societies. You have been part of both a multiethnic state that failed and one that has succeeded. Malaysia was unwilling to allow what it saw as a Chinese city-state to be part of it and expelled Singapore from its federation in 1965. Singapore itself, however, exists peacefully as a multiethnic state. Is there a solution for those states that have ethnic and religious groups mixed within them?

    LKY: Each state faces a different set of problems and I would be most reluctant to dish out general solutions. From my own experience, I would say, make haste slowly. Nobody likes to lose his ethnic, cultural, religious, even linguistic identity. To exist as one state you need to share certain attributes, have things in common. If you pressure-cook you are in for problems. If you go gently, but steadily, the logic of events will bring about not assimilation, but integration. If I had tried to foist the English language on the people of Singapore I would have faced rebellion all around. If I had tried to foist the Chinese language, I'd have had immediate revolt and disaster.

    But I offered every parent a choice of English and their mother tongue, in whatever order they chose. By their free choice, plus the rewards of the marketplace over a period of 30 years, we have ended up with English first and the mother tongue second. We have switched one university already established in the Chinese language from Chinese into English. Had this change been forced in five or ten years instead of being done over 30 years -- and by free choice-- it would have been a disaster.

    FZ: This sounds like a live-and-let-live kind of approach. Many Western countries, particularly the United States and France, respectively, have traditionally attempted to assimilate people toward a national mainstream -- with English and French as the national language, respectively. Today this approach is being questioned, as you know, with some minority groups in the United States and France arguing for "multiculturalism," which would allow distinct and unassimilated minority groups to coexist within the nation. How does this debate strike you as you read about it in Singapore?

    LKY: You cannot have too many distinct components and be one nation. It makes interchangeability difficult. If you want complete separateness then you should not come to live in the host country. But there are circumstances where it is wise to leave things be. For instance, all races in Singapore are eligible for jobs and for many other things. But we put the Muslims in a slightly different category because they are extremely sensitive about their customs, especially diet. In such matters one has to find a middle path between uniformity and a certain freedom to be somewhat different. I think it is wise to leave alone questions of fundamental beliefs and give time to sort matters out.

    FZ: So you would look at the French handling of their Muslim minorities and say "Go slow, don't push these people so hard."

    LKY: I would not want to say that because the French having ruled Algeria for many years know the kind of problems that they are faced with. My approach would be, if some Muslim girl insists on coming to school with her headdress on and is prepared to put up with that discomfort, we should be prepared to put up with the strangeness. But if she joined the customs or immigration department where it would be confusing to the millions of people who stream through to have some customs officer looking different, she must wear the uniform. That approach has worked in Singapore so far.


    FZ: Let me shift gears somewhat and ask you some questions about the international climate in East Asia. The part of the world you live in is experiencing the kind of growth that the West has experienced for the last 400 years. The West has not only been the world's great producer of wealth for four centuries, it has also been the world's great producer of war. Today East Asia is the locus of great and unsettling growth, with several newly rising powers close to each other, many with different political systems, historical animosities, border disputes, and all with ever-increasing quantities of arms. Should one look at this and ask whether Europe's past will be East Asia's future?

    LKY: No, it's too simplistic. One reason why growth is likely to last for many years in East Asia -- and this is just a guess -- is that the peoples and the governments of East Asia have learned some powerful lessons about the viciousness and destructiveness of wars. Not only full-scale wars like in Korea, but guerrilla wars as in Vietnam, in Cambodia and in the jungles of Malaysia, Thailand, Indonesia and the Philippines. We all know that the more you engage in conflict, the poorer and the more desperate you become. Visit Cambodia and Vietnam; the world just passed them by. That lesson will live for a very long time, at least as long as this generation is alive.

    FZ: The most unsettling change in an international system is the rise of a new great power. Can the rise of China be accommodated into the East Asian order? Isn't that kind of growth inevitably destabilizing?

    LKY: I don't think we can speak in terms of just the East Asian order. The question is: Can the world develop a system in which a country the size of China becomes part of the management of international peace and stability? Sometime in the next 20 or 30 years the world, by which I mean the major powers, will have to agree among themselves how to manage peace and stability, how to create a system that is both viable and fair. Wars between small countries won't destroy the whole world, but will only destroy themselves. But big conflicts between big powers will destroy the world many times over. That's just too disastrous to contemplate.

    At the end of the last war what they could foresee was the United Nations. The hope was that the permanent five would maintain the rule of law or gradually spread the rule of law in international relations. It did not come off because of Stalin and the Cold War. This is now a new phase. The great powers -- by which I mean America, Western Europe as a group if they become a union, Japan, China and, in 20 to 30 years time, the Russian republic -- have got to find a balance between themselves. I think the best way forward is through the United Nations. It already has 48 years of experience. It is imperfect, but what is the alternative? You can not have a consortium of five big powers lording it over the rest of mankind. They will not have the moral authority or legitimacy to do it. Are they going to divide the world into five spheres of influence?

    So they have to fall back on some multilateral framework and work out a set of rules that makes it viable. There may be conflicts of a minor nature, for instance between two Latin American countries or two small Southeast Asian countries; that doesn't really matter. Now if you have two big countries in South Asia like India and Pakistan and both with nuclear capabilities, then something has to be done. It is in that context that we have to find a place for China when it becomes a major economic and military power.

    FZ: Is the Chinese regime stable? Is the growth that's going on there sustainable? Is the balancing act between economic reform and political control that Deng Xiaoping is trying to keep going sustainable after his death?

    LKY: The regime in Beijing is more stable than any alternative government that can be formed in China. Let us assume that the students had carried the day at Tiananmen and they had formed a government. The same students who were at Tiananmen went to France and America. They've been quarreling with each other ever since. What kind of China would they have today? Something worse than the Soviet Union. China is a vast, disparate country; there is no alternative to strong central power.

    FZ: Do you worry that the kind of rapid and unequal growth taking place in China might cause the country to break up?

    LKY: First, the economy is growing everywhere, even in Sichuan, in the heart of the interior. Disparate growth rates are inevitable. It is the difference between, say, California before the recession and the Rust Belt. There will be enormous stresses because of the size of the country and the intractable nature of the problems -- the poor infrastructure, the weak institutions, the wrong systems that they have installed, modeling themselves upon the Soviet system in Stalin's time. Given all those handicaps, I am amazed that they have got so far.

    FZ: What about the other great East Asian power? If Japan continues on the current trajectory, should the world encourage the expansion of its political and military responsibilities and power?

    LKY: No. I know that the present generation of Japanese leaders do not want to project power. I'm not sure what follows when leaders born after the war take charge. I doubt if there will be a sudden change. If Japan can carry on with its current policy, leaving security to the Americans and concentrating on the economic and the political, the world will be better off. And the Japanese are quite happy to do this. It is when America feels that it's too burdensome and not worth the candle to be present in East Asia to protect Japan that it will have to look after its own security. When Japan becomes a separate player, it is an extra joker in the pack of cards.

    FZ: You've said recently that allowing Japan to send its forces abroad is like giving liquor to an alcoholic.

    LKY: The Japanese have always had this cultural trait, that whatever they do they carry it to the nth degree. I think they know this. I have Japanese friends who have told me this. They admit that this is a problem with them.

    FZ: What if Japan did follow the trajectory that most great powers have; that it was not content simply to be an economic superpower, "a bank with a flag" in a writer's phrase? What if they decided they wanted to have the ultimate mark of a great power -- nuclear weapons? What should the world do?

    LKY: If they decided on that the world will not be able to stop them. You are unable to stop North Korea. Nobody believes that an American government that could not sustain its mission in Somalia because of an ambush and one television snippet of a dead American pulled through the streets in Mogadishu could contemplate a strike on North Korean nuclear facilities like the Israeli strike on Iraq. Therefore it can only be sanctions in the U.N. Security Council. That requires that there be no vetoes. Similarly, if the Japanese decide to go nuclear, I don't believe you will be able to stop them. But they know that they face a nuclear power in China and in Russia, and so they would have to posture themselves in such a way as not to invite a preemptive strike. If they can avoid a preemptive strike then a balance will be established. Each will deter the others.

    FZ: So it's the transition period that you are worried about.

    LKY: I would prefer that the matter never arises and I believe so does the world. Whether the Japanese go down the military path will depend largely on America's strength and its willingness to be engaged.


    FZ: Is there some contradiction here between your role as a politician and your new role as an intellectual, speaking out on all matters? As a politician you want America as a strong balancer in the region, a country that is feared and respected all over the world. As an intellectual, however, you choose to speak out forcefully against the American model in a way that has to undermine America's credibility abroad.

    LKY: That's preposterous. The last thing I would want to do is to undermine her credibility. America has been unusual in the history of the world, being the sole possessor of power -- the nuclear weapon -- and the one and only government in the world unaffected by war damage whilst the others were in ruins. Any old and established nation would have ensured its supremacy for as long as it could. But America set out to put her defeated enemies on their feet, to ward off an evil force, the Soviet Union, brought about technological change by transferring technology generously and freely to Europeans and to Japanese, and enabled them to become her challengers within 30 years. By 1975 they were at her heels. That's unprecedented in history. There was a certain greatness of spirit born out of the fear of communism plus American idealism that brought that about. But that does not mean that we all admire everything about America.

    Let me be frank; if we did not have the good points of the West to guide us, we wouldn't have got out of our backwardness. We would have been a backward economy with a backward society. But we do not want all of the West.


    THE DOMINANT THEME throughout our conversation was culture. Lee returned again and again to his views on the importance of culture and the differences between Confucianism and Western values. In this respect, Lee is very much part of a trend. Culture is in. From business consultants to military strategists, people talk about culture as the deepest and most determinative aspect of human life.

    I remain skeptical. If culture is destiny, what explains a culture's failure in one era and success in another? If Confucianism explains the economic boom in East Asia today, does it not also explain that region's stagnation for four centuries? In fact, when East Asia seemed immutably poor, many scholars -- most famously Max Weber -- made precisely that case, arguing that Confucian-based cultures discouraged all the attributes necessary for success in capitalism.

    Today scholars explain how Confucianism emphasizes the essential traits for economic dynamism. Were Latin American countries to succeed in the next few decades, we shah surely read encomiums to Latin culture. I suspect that since we cannot find one simple answer to why certain societies succeed at certain times, we examine successful societies and search within their cultures for the seeds of success. Cultures being complex, one finds in them what one wants.

    What explains Lee Kuan Yew's fascination with culture? It is not something he was born with. Until his thirties he was called "Harry" Lee (and still is by family and friends). In the 1960s the British foreign secretary could say to him, "Harry, you're the best bloody Englishman east of the Suez." This is not a man untouched by the West. Part of his interest in cultural differences is surely that they provide a coherent defense against what he sees as Western democratic imperialism. But a deeper reason is revealed in something he said in our conversation: "We have left the past behind, and there is an underlying unease that there will be nothing left of us which is part of the old."

    Cultures change. Under the impact of economic growth, technological change and social transformation, no culture has remained the same. Most of the attributes that Lee sees in Eastern cultures were once part of the West. Four hundred years of economic growth changed things. From the very beginning of England's economic boom, many Englishmen worried that as their country became rich it was losing its moral and ethical base. "Wealth accumulates and men decay," wrote Oliver Goldsmith in 1770. It is this "decay" that Lee is trying to stave off. He speaks of the anxious search for religion in East Asia today, and while he never says this, his own quest for a Confucian alternative to the West is part of this search.

    But to be modern without becoming more Western is difficult; the two are not wholly separable. The West has left a mark on "the rest," and it is not simply a legacy of technology and material products. It is, perhaps most profoundly, in the realm of ideas. At the close of the interview Lee handed me three pages. This was, he explained, to emphasize how alien Confucian culture is to the West. The pages were from the book East Asia: Tradition and Transformation, by John Fairbank, an American scholar.
    Culture Is Destiny: A Conversation with Lee Kuan Yew
    Since many American's wonder why 'others' are so hostile.

    Here is a view of one of the pro US politicians, who has transformed a poverty stricken island into a economic powerhouse.

    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.


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    20 Aug 03

    Financial Markets Meltdown; Interview With Lee Kuan Yew

    Aired September 21, 2008 - 13:00 ET


    FAREED ZAKARIA, HOST, GLOBAL PUBLIC SQUARE: Welcome to the GLOBAL PUBLIC SQUARE, to our viewers in the United States and around the world. I'm Fareed Zakaria.
    Well, will historians look back and say this was the week that the American model of capitalism died? For two decades, American finance has been a global juggernaut, coursing through the world and telling the rest to follow its lead.

    But the whole thing seems to have rested on a massive amount of risk, with most investment banks leveraged at 30-to-one, and most financial institutions mimicking these banks.

    All of that meant keeping the world's confidence was key. But has that confidence run out?

    When I was thinking about this, I remembered something Tom Friedman, the "New York Times" columnist, said last week on this show about the United States.


    TOM FRIEDMAN, COLUMNIST, "NEW YORK TIMES": If you jump out of an 80-story building from the 80th floor, for 79 stories you can think you're flying. It's just the sudden stop at the end that gets you.

    And that's what I'm worried about, that we're going to have a sudden stop at the end.


    ZAKARIA: Well, is this the sudden stop? We'll find out.

    Joining me now to talk about this global financial crisis is, from Oslo, Norway, Martin Wolf, columnist for the "Financial Times." From Washington, Congressman Barney Frank, chairman of the House Financial Services Committee.

    Here with me in New York, Zachary Karabell, president of RiverTwice Research, where he analyzes economic and political trends. And Niall Ferguson, the professor of economic history at Harvard University.

    Niall Ferguson, what is this going to look like in history? Is this the big one? NIALL FERGUSON, AUTHOR AND PROFESSOR OF ECONOMIC HISTORY, HARVARD UNIVERSITY: Well, it's not the Great Depression. It's more like the great repression.

    All the factors are in place for a repeat of '29 to '32, except that the monetary authorities and the fiscal authorities are doing the right things, whereas they did the wrong things back in the early 1930s. So, I'm thinking of it as a great repression.

    It could be the next big one, that one-in-a-century type event that Alan Greenspan was talking about the other day. And unfortunately, it's not clear yet whether it's enough for us simply to nationalize bad companies and let a few other bad companies go down. It's not clear yet whether a generous monetary policy can suffice to stop this downward spiral in valuations.

    And my sense is that this is almost the endgame for a certain way of thinking about financial markets. We'd sort of assumed that the lesson of the Great Depression was that the Fed, if it did the right thing, could prevent this kind of deflation of assets from spiraling out of control, and that if all else failed, the Treasury could step in.

    And I'm not sure that that's going to turn out to be true. So, this may end up invalidating a lot of what we thought we knew about the last big one.

    ZAKARIA: Martin Wolf, what about that point, that this seems to suggest that the entire, at least American model of investment banking is somewhat suspect, that, you know the whole -- the fundamental model is that these investment banks take 30-to-one leverage and basically turn the bank into a kind of casino in which they're betting large amounts of money?

    And if that, you know, if that's the game and your stock price starts going down, all of a sudden you can't play the game anymore, because you're using your stock prices as part of your table stakes in the poker game.

    MARTIN WOLF, COLUMNIST, "FINANCIAL TIMES": Given this mess -- and it is, obviously, a very fundamental mess and a profound challenge for that system, which I think is pretty well dead -- can we rescue it through standard fiscal and monetary interventions?

    And here I really don't agree with Niall. My estimates of the likely losses on the worst possible assumptions indicate to me that the U.S. Treasury can certainly manage these losses. They're much smaller than other very big collapses that have occurred in other countries in the recent -- in the quite recent past. And I believe the monetary authorities will be able to get us through it.

    But the model is broken.

    ZAKARIA: Congressman Frank, is the model broken? Are these investment banks going to have to be regulated substantially?


    I think one of the striking things about this -- and again, I -- accounting may be a factor. But there were some really bad mistakes made here of two kinds.

    First, it began with subprime. And if you look at the issue, the regulated entities that originate mortgages -- the banks, the credit unions -- they did not make this problem. This problem came from loans that were originated by the unregulated sectors.

    And then, the kind of things Martin Wolf is obviously referring to, they then took these initial bad decisions and multiplied them, and spread them and leveraged them, so that you got -- there are very real problems here.

    It's striking that, in the current situation, we are going to the more regulated institutions, the banks -- the Bank of America, Barclays, JPMorgan Chase -- to help out the unregulated institutions. The more regulated the institution, the less likely there was to be a problem.

    With AIG, what they're doing is taking the most regulated entities there, the insurance companies, and having them provide the revenues to meet the debts incurred by the unregulated.

    So, clearly, there needs to be regulation going forward, thoughtfully done, that constrains risks and leverage that the system doesn't do by itself right now.

    ZAKARIA: Niall Ferguson?

    FERGUSON: I think what Lehman Brothers has in common with all the other failures, including AIG, was that this was a case of institutions, whether they were called banks or insurance companies, trying to behave like hedge funds in order to maximize their returns. And it turns out that this doesn't work too well.

    I think we're going to see the disappearance of that thing we got used to calling the investment bank, which didn't actually collect deposits on its balance sheet. These things are going to be absorbed by banks that rely on the collection of deposits as one of their core competencies. Whereas, out of the chaos may emerge a new breed of big, strong hedge funds that are good at being hedge funds.

    This is an evolutionary process. Think of it as being Darwinian. And this is one of these great dyings, when certain species actually are obliterated by a radical change in the economic climate.

    It doesn't kill everybody, though. The mammals that I see emerging, so to speak, as the dinosaurs die off, are going to be the hedge funds that knew best how to handle these sorts of risks.

    ZAKARIA: And in fact, the hedge funds have handled this risk must better, have they not.

    ZACHARY KARABELL, PRESIDENT, RIVERTWICE RESEARCH: Yes, and they -- we don't see any huge implosions. The hedge funds aren't closing. They did a lot worse with commodity prices than they're doing with this particular crisis.

    I think it's important to separate the housing issue from the current Wall Street crisis. And Congressman Frank, the housing issue certainly would have had huge ramifications politically, but it would not have -- or should not have -- absent this financial leverage, brought down the financial system or been the kind of economic issue that we're now talking about.

    What you need to do is -- and all these earlier crises, and Niall could speak to this much better, I'm sure -- is prevent these moments of panic turning into runs on the bank.

    And what we're seeing right now is a virtual run on the bank. It's not a run for assets and money involved. It's a run for sort of derivative or applied value.

    FRANK: All right, but I have to respond on the...

    ZAKARIA: Yes, yes, yes.

    FRANK: ... subprime situation.

    I just disagree that it was only a housing thing. Look, the problem was that they made these bad loans in the very large amounts, and they bought them and sold them.

    It was -- it is not the case that it's housing as opposed to the financial situation. It was these very institutions that got themselves in trouble by basing these decisions and leveraging with the bad loans.

    If there were no bad loans made initially, if there were no bad decisions made to feed into the system, then you don't have the problem. Accounting doesn't cause the problem when there's no reality.

    ZAKARIA: All right. Let me ask another question, which is: Are we now agreed that we are in for a phase of regulation, that the era of Thatcherism and Reaganism has kind of run its course?

    Martin Wolf, are we going to be in for a new age of some kind of more regulated capitalism?

    WOLF: Well, there's a very big question, which is: Will this call into question the whole movement to somewhat freer markets to liberalization across everything -- trade, movement of people, movement of capital? That's a very big sort of question about the whole zeitgeist, the time we live in.

    And I think it is possible, but not logical -- it is possible but not logical that people will look at this and say, "Well, this free market stuff is complete junk. It's obviously not what we should believe in. We should go to a more regulated existence -- more controlled, more nationally oriented across the board." I think that would be a tragedy, but I think it would be possible.

    The more specific question, though, is about the financial system. We have operated in a financial system -- and I've always been aware of this -- in which there are huge implicit guarantees and many explicit guarantees from the state to the financial system as a whole. Because as we've seen yet again in this case, even a Republican administration can't let major financial institutions just disappear.

    Now, if you provide those sorts of guarantees, and at the same time allow the financial system to operate like a gigantic and uncontrollable casino, you're asking for catastrophe.

    So, it seems to me perfectly obvious that the real lesson of this is that the financial sector will have to be regulated in different ways. I think it's about -- and what Congressman Frank said is absolutely right -- intelligent regulation, which fundamentally changes the incentives these people face.

    But there isn't any doubt we can't allow the system to operate in the way this one does, which is essentially at the taxpayers' expense.

    FRANK: Can I say...

    ZAKARIA: Yes, please.

    FRANK: Let me respond on the regulation issue.

    Look, we've evolved on the conservative side. The conservative icon, Ronald Reagan, in his first inaugural says, "government is not the answer to the problem; government is the problem."

    We now have Secretary Paulson and Chairman Bernanke appearing on Wall Street, and their announcement is "We're from the government. We're here to help you."

    Clearly, there has got to be a constraint on risk-taking and the highly leveraged risk-taking that the system doesn't provide itself.

    And I would say that becomes pro-market, because as we now see, we have investors that are not buying what they should buy. We've got an investors strike. And until and unless there is some assurance to those investors, that has to come in part from sensible regulation, they don't go back in.

    ZAKARIA: Niall Ferguson?

    FERGUSON: One of the big dangers is that, in the wake of every financial crisis there has been in the last 200 or 300 years, there's been a rush to change the regulations in the belief that the regulations must have been the problem.

    I think we have to realize two things. One, financial crises are inevitable in any kind of market economy, because of the nature of human psychology. I mean, we are prone to euphoria, and we are prone to depression, to mood swings. And the financial markets reflect that.

    And no...

    FRANK: But professor, what I'm saying...

    FERGUSON: Can I just finish, congressman.

    And no amount of regulation can stop that happening.

    The 1970s were a time of very large-scale government regulation. Were there financial crises in the 1970s? You bet there were. The secondary banking crisis in the early 1970s wiped out a whole bunch of institutions in London.

    There's never been a time when regulation has magically abolished financial crises. They always happen.

    And finally...

    FRANK: We're not trying to...

    FERGUSON: ... let's remember, congressman, let's remember that part of this problem has been a result of Congress' action. It was Congress that turned a blind eye to Fannie Mae's extraordinarily highly leveraged antics.

    It's not as if Congress has not been implicated in much that's gone into this crisis.

    FRANK: Well, you're -- A, you're tilting at a straw man. The notion that regulation will abolish crises -- no one thinks that. But you do respond.

    When you say that these regulations are always wrong, I don't think the establishment of the Securities and Exchange Commission or deposit insurance, which came out of the New Deal in response to a crisis, were bad things.

    As far as Congress is concerned, in 1994, the Congress did tell the Federal Reserve to regulate mortgages issued by non-regulated entities.

    Alan Greenspan said, "No, I don't know more than the market. I won't do it."

    Ben Bernanke, to his credit, has now used that authority.

    If Greenspan had done with regard to subprime mortgages in 2002 what Ben Bernanke just did this past summer, we would have had a much smaller crisis.


    KARABELL: But you still would have had the issue of Wall Street financial wizardry is going to find things to create leverage on. And if it hadn't been homes, it'll be something else.

    So, if you only attack the home issue...

    FRANK: Oh, I think that's mindless.

    KARABELL: ... you're not going to change the fact -- you know.

    ZAKARIA: All right. Let me...

    FRANK: If you had not had millions of bad loans made...

    KARABELL: Yes, that is...

    FRANK: ... you would not have had as big a problem.

    KARABELL: And the current crisis is a result of that. But Wall Street will, in fact, find other things to apply leverage...

    ZAKARIA: All right. Hold it right there. We're going to take a break, and we will be right back.


    ZAKARIA: And we're back with our panel.

    It strikes me, Martin, that this helps the left, that in the American presidential context, it helps Obama, that in general terms, if you believe that we're in -- you know, we need to regulate markets, people are going to say, you know, Democrats will be more willing to do this than Republicans.

    Is that fair?

    WOLF: Well, you're asking me, which quite improperly, to make a judgment on the politics of another country. It would seem to me, at least...

    ZAKARIA: Remind me you're not the foreign secretary, Martin.

    WOLF: ... this is true, that in -- that at least this is true, that in the last several years, I agree with the congressman that the underlying losses in the lending for housing is a crucial trigger, whatever else happened.

    And that was the product of a philosophy, which was applied to particularly the housing bubble, which has been far away the most destructive of these various bubbles in the developed world. And that philosophy was carried out under a particular administration, until very recently a particular Congress.

    It would seem to me to have political implications, which are fairly obvious, but that politics isn't rational.

    But however, I should stress that in my own country, which also has a big housing bubble and a pretty large number of problems, this has actually happened under a left-of-center government. So it's not completely obvious how the politics will go.

    But the incumbents, the people who were there when this happened, surely will have to take the blame.

    ZAKARIA: Niall, is this...

    FRANK: Can I just say...

    ZAKARIA: Yes.

    FRANK: I have to say...

    ZAKARIA: Is this a left-right issue?

    FRANK: I have to go vote, speaking of politics. I'm here in the Capitol. We're taping this. And there is a roll call in progress, so I apologize. I have to go tend to more parochial politics.

    ZAKARIA: All right. Congressman Frank, thank you very much for joining us.

    Niall, is this a left-right issue?

    FERGUSON: I wish I knew what he was voting on.

    I think it could be. It's not quite clear that that's how the candidates are going to play it yet. They're both, it seems to me, rather struggling to find the right note to hit on this crisis.

    It ought to be, as you say, Fareed, a slam dunk for the Democrats. And it ought to be, really, Obama's opportunity to be the Franklin Roosevelt of his generation. But somehow, this doesn't come naturally to him. It doesn't really seem to me to be his strong suit.

    And what I think we may end up with is a slightly sort of soft, soft version of the New Deal being offered by Obama, and John McCain having to counter with another kind of Rooseveltian economics -- Teddy Rooseveltian economics -- saying, you know, this isn't going to be solved by increasing the power of the federal bureaucracy. This is about bashing bad guys on Wall Street, and bashing corrupt congressmen.

    I think there's two different kinds of populism that can be rolled out at this point, one of which increases the federal government's power, and one of which doesn't necessarily. And I'm not sure it's clear which one American voters will go for yet.

    ZAKARIA: Zachary?

    KARABELL: I do think there is a strong populist advantage here for Obama, I mean, largely because it plays into that part of the Democratic base.

    And so, there's this American Dream of everyone owning their home. So you already have the advantage of saying, well, you've gotten hoodwinked into not being able to own your home. Now you've lost the value of your retirement assets in the form of your 401K's with declining stock market values. And on top of that all, there's no protection. Nobody's minding the store.

    And there's a certain amount of (inaudible), in that there are a lot of people who can take a certain delight in the fall of Wall Street right now. But even that plays, I think, into the Democratic base, because there's a sense of, well, perhaps justice will be done in the end, and that the people who took advantage of this system are now paying the price of that.

    FERGUSON: The irony is that, actually, Wall Street seemed to be backing Obama rather more strongly than McCain prior to this crisis. Far more hedge funds and Goldman Sachs contributions to the Obama campaign than to the McCain campaign.

    ZAKARIA: Let me ask about another kind of politics, finally.

    Martin, it does seem to me that this also has another effect, which is the final or further de-legitimization of American power.

    If the Iraq war sort of tarnished the credibility of American political power, this has tarnished the credibility of American economic power and the American economic model.

    It is very unlikely that people will look at American finance capitalism, at these great American investment banks, with the kind of envy and awe that has happened for the last two decades.

    WOLF: People thought the U.S. is the world's most successful, most dynamic economy. It's the model we all follow. It has been the one that has been pushing liberalization of economies, of financial markets around the world. And it has been touting its model. It's the one that rescued Asia back -- you remember the "Committee to Save the World" 10 years ago?

    And now this, the very core of American credibility and power, is revealed as complete shambles, of total collapse of one great household name after another, the secretary of the Treasury and the Fed chairman rushing afterwards, desperately putting fingers in dikes.

    There's no question at all, if you talk to Chinese officials, people from India, they look at this and they think, well, is this a model we want to follow? Is this actually the example that we all ought to believe in?

    So, I think in this sense, it's unquestionably a very profound turning point.

    ZAKARIA: Zachary Karabell, you're a little more optimistic.

    KARABELL: You know, I don't think the model at all is in question, Martin. I think everybody has essentially embraced the model. And Niall has certainly written about this as well.

    But people will look back at this time -- and I could say, "mark my words," but no one will -- people will look back at this time and say, this was the period of time when the global capital base literally went outside the United States, much the way the manufacturing base of the world left the United States...

    ZAKARIA: Meaning what?

    KARABELL: ... in the 1970s.

    ZAKARIA: Meaning what?

    KARABELL: Meaning we are no longer -- the United States is no longer the source of global liquidity, global capital, global investment money.

    ZAKARIA: The de-Americanization of global finance, Niall?

    FERGUSON: I'm not sure it's time to anticipate that yet.

    You know, the American financial history is a series of crises, and often household names would evaporate. Who remembers now the Knickerbocker Trust?

    Let's not forget that this is part of the American package, that banks fail. It's called "creative destruction." That was a great phrase used by Joseph Schumpeter.

    When you look at the other models that are on offer here -- let's say, state monopoly capitalism of the sort they have in Moscow, or some kind of quasi-liberal planned economy of the sort they have in Beijing -- are those faring any better at the moment? Actually, no.

    I know which stock market is down most in the world, and it sure isn't the U.S. stock market. Actually, it's the Russian stock market right now.

    ZAKARIA: But so is the model...

    FERGUSON: Let's not assume there's an alternative model that everybody can embrace, that somehow could proof against crisis.

    ZAKARIA: But could the model be more European banks, which are much less leveraged, which have been -- which have not reaped the rewards of the last two decades quite as much, but are not imploding before our eyes?

    FERGUSON: The last time I looked at the numbers, they had lost just as much money in the subprime crisis as their American counterparts. And it's only really a somewhat different set of arrangements between governments and finance that are preventing banks in Switzerland and in Britain from going bust.

    KARABELL: But the issue, Niall, is not that this represents the failure of the United States long term. The globalization of capital can be immensely beneficial to any of the players within it.

    And the manufacturing example is quite germane in that, yes, it's true that a lot of people lost their jobs in the 1970s. Pittsburgh was a disaster zone for 15 or 20 years. But Pittsburgh today is, you know, a high-tech service capital. And you have this transition in that creative destruction way.

    It doesn't mean that the United States becomes a substantially poorer or less affluent society. It just means that the base becomes much more disperse. And I think that's what we're beginning to see, not the erosion of the model.

    ZAKARIA: Martin Wolf, you get the last word from Oslo.

    WOLF: I think your distinguished contributors are dreaming.


    What's happened -- of course, they are quite right. Of course there's globalization of capital...

    FERGUSON: So what is this all (inaudible), Martin, if it's working so well?

    WOLF: ... and all the rest of it. All this is true.

    The fundamental point -- the fundamental point is that the rest of the world, whether they're right or wrong -- they may well be wrong. Maybe the U.S. is the ideal model.

    They are not going to allow the sort of deregulated, market-based as opposed to financial institution-based financial system develop and operate that the U.S. has had and has touted as a model. And I think that seems to me quite clear.

    So we can have multiple models, somewhat different. And those multiple models will survive, and we won't have economical model. And that's what's changed.

    ZAKARIA: All right. On that note, Niall Ferguson, Martin Wolf, Zach Karabell, thank you very much.


    ZAKARIA: When I first met Lee Kuan Yew in 1994, I was absolutely struck by him. Richard Nixon once compared him to legendary statesmen like Disraeli, Bismarck and Churchill. But, Nixon said, he occupies a small stage. That stage doesn't look so small anymore.

    Lee Kuan Yew took a small spit of land in Southeast Asia, which became independent in 1965 after great struggle and anguish, with no resources and a polyglot population of Chinese, Malaysian and Indian workers, and turned it into one of the economic centers of the world.

    To do this, Lee had to have smart economic policies, but also a shrewd foreign policy that, allied with America, kept China happy, kept Russia and Japan at bay.

    This week I sat down with Lee Kuan Yew in Singapore. His son now serves as prime minister, but Lee Kuan Yew is called "minister mentor." And he is still indisputably the father of Singapore.

    I was struck by the depth of his understanding of the world -- China, Russia and the United States -- all at age 85.

    Listen to this.


    ZAKARIA: You have achieved remarkable success for Singapore in your lifetime. You've seen it go from a tiny, poor, backward, Third World country to one of the richest countries in the world.

    But lots of people feel that you have been -- you have exercised too tight a control, that you should have opened things up more, that it has been too domineering and coercive a state.

    What do you say to that?

    LEE KUAN YEW, FORMER PRIME MINISTER OF SINGAPORE: I say, ask my people. They are given the vote. It's secret.

    Nobody has ever alleged any chicanery -- no bribery, no coercion, no nothing. We have never won less than 60, two-thirds of the vote.

    ZAKARIA: But it's difficult for opposition parties to form and...

    LEE: It is not the business of the government to enable the opposition party to overturn us. Right?

    Do you expect the Republicans to help the Democrats to overturn them?

    ZAKARIA: No, but leave aside even just the issue of political competition. I just mean you have laws, for example, that allow random testing of people for drugs. You have, you know, the famous ban against chewing gum, which exercised people's imagination.

    Do you feel that you should have let up a little bit?

    LEE: No, not at all. Because of that, we are now a safe, secure, fun city. The night scene has been transformed in the last 10, 15 years -- any number of nightclubs, the night life, al fresco dining by the riverside.

    ZAKARIA: And people can even chew gum now.

    LEE: You need to have a medical certificate to buy gum for those who want to give up smoking and have got to chew some nicotine.

    What is it I am trying to do? I am trying to create, in a Third World situation, a First World oasis.

    I am not following any prescription given me by any theoretician on democracy, or whatever. I work from first principles, what will get me there -- social peace and stability within the country, no fight between the races, between religions, whatever, fair shares for all, everybody is a homeowner.

    I want investments. I've got nothing expect skilled manpower, infrastructure. I build up the infrastructure. I educate the people.

    We have the best educated work force anywhere in Asia, and I would say, within another 10 years, anywhere in the world. They're all educated in English, which is our working language, and they keep their mother tongue, whether it's Chinese, Malay or Tamil, Urdu, or whatever.

    Must I follow your prescription to succeed? Do I want to be like America? Yes, in its inventiveness and its creativeness.

    But do I want to be with America, like America, with its inability to control the drug problem? No. Or the gun problem? No.

    These are my choices. I go by what is good governance. What are the things I aim to do? A healthy society that gives everybody a chance to achieve his maximum.

    ZAKARIA: What do you think of the American campaign, watching it from Singapore?

    LEE: What can I say? It's fascinating.

    Suddenly, Senator McCain produces this governor from Alaska, Palin, and is leading in the polls, and she's a hit. The first flush, she was a disaster.

    ZAKARIA: What do you want from the next president?

    LEE: Engagement with the world. Keep trade going. Don't backtrack, or you'll put yourself at a disadvantage and put the world at a disadvantage, and you make conflicts more likely.

    Try and maintain a balance, so that peace and stability is assured without more conflicts.

    ZAKARIA: One thing you've been critical of the United States of in the past has been its efforts to spread democracy around the world. You were critical of it when it was Bill Clinton's America, leave alone the freedom agenda of George Bush.

    What do you object to in that push?

    LEE: No, I don't -- I don't think it's doable. I'm a social Darwinist.

    ZAKARIA: Survival of the fittest.

    LEE: No. The survival requires you to change. If you don't change, then you are marginalized and you will become extinct.

    ZAKARIA: But do you look at the way in which the United States has been trying to push democracy around the world...

    LEE: Yes.

    ZAKARIA: ... and you say...

    LEE: Where have you succeeded? You went to Haiti in nation- building. And I was just listening to a BBC on Haiti recently. I mean, it's just undoable.

    ZAKARIA: And we will be back.


    ZAKARIA: What about Iraq? What do you think?

    LEE: I was in favor of getting rid of Saddam Hussein. I did not believe it was possible to reconstitute Iraq as a democracy. I still do not believe that is possible.

    ZAKARIA: So, what do you think will happen?

    LEE: I think some compromise must be reached between the Shias and Sunnis and the Kurds to share the oil wealth and to share the country. And that is possible.

    But whether it is democracy, or whether it's a bargain between tribal chieftains, that's a different matter.

    You're going to bring democracy to Afghanistan? They have been warring with each other for hundreds of years. They enjoy warring with each other. Thirty-plus years ago they killed a king who was nominally holding the country together, and it's been shattered ever since.

    How do you restore the writ of Kabul? By some 30,000 NATO troops, ISAF, and a few more brigades of Marines or special forces?

    The Russians had 140,000 boots on the ground with tanks, helicopters and the lot. And they left.

    I think nation-building is not doable. I mean, are you going to do nation-building in Pakistan? If you can't get Pakistan right, you will never get Afghanistan right.

    That Durand Line was arbitrarily drawn by the British between the Northwest Frontier Provinces and Afghanistan. They are the same tribes, brothers, cousins -- porous borders. They're in and out.

    Now you've not only got Talibans, you've got Pakistanis joining the Talibans -- or that's the latest intelligence that I've been reading.

    It can go on for decades. Do we want to be in Afghanistan for decades?

    ZAKARIA: A lot of people look at the Russian attack on Georgia and say this is the return of a kind of dark era of geopolitics.

    How do you view it?

    LEE: The country is booming, has got enormous oil wealth. But the underlying problems are enormous. The system is no longer the Soviet system, where you press a button and things move across the country.

    The corruption will take quite some time to put right -- maybe a very long time. I don't know.

    The population is not on the increase, in spite of all kinds of incentives. And the incentives will only work in the cities.

    So, if you look at the long-term trends, it's 140 million Russians, who will go down to 120, 110 in 2050. How do you become a threat with just nuclear weapons?

    ZAKARIA: Has America handled this crisis well?

    LEE: It shouldn't have led to this crisis.

    You are dealing with a very adventurous leader in Georgia, and he acted in a very unwise fashion. It was just too silly for words.

    What was the point? What was he trying to score?

    And bad intelligence, because good intelligence -- what I read of the intelligence reports -- the Russian troops were there, ready. And if good intelligence, they would know what the reaction would be, and they would have blocked the tunnel, blown up the tunnel, and prevented the tanks from coming in.

    This is just bungling. And...

    ZAKARIA: By Washington also, because we should have managed this better?

    LEE: I do not want to guess why the Americans were so keen to bring Georgia into NATO. But at Bucharest, when the NATO meeting was held, Americans should have known that it wasn't warmly received by the people who would be on the front line, if ever there's a conflict. And the Russians know that.

    ZAKARIA: And we will be back.


    ZAKARIA: When the world saw the Beijing Olympics, and they saw the opening ceremonies, they saw a kind of birth of a new great power. How should we think about it? Should we be apprehensive?

    LEE: What we saw -- and I was there with a lot of other of the VIPs -- was a reflection of their capabilities, their potential. It's not what they have achieved industrially or technologically. This was a show that they had seven years to prepare for. And they were carefully thoughtful about what they wanted to present to the world. They wanted to remind the world that they are an old civilization, 5,000 years. They discovered gun powder, paper, movable type, printing. They built the Great Wall.

    That's the kind of capabilities for disciplined effort that built the Great Wall, the Grand Canal, and eventually will build them a technological society.

    ZAKARIA: So you don't worry about them.

    LEE: What do they want? Every year they know they are closing the gap. That gap is a huge one.

    ZAKARIA: Technologically between them and the West.

    LEE: Technologically and industrially.

    I mean, what you see along the coastal provinces is just about 20, 30 percent of the population, the advantaged part of China. If you go to the inland parts, you will see a very different China.

    So they know that to catch up is 30, 40, 50 years. So, let's not quarrel with anybody. That would abort the whole process.

    Every year they grow stronger economically, industrially, catching up technologically. Any external problems will diminish their growth.

    What do they have to worry about? Internal problems, social unrest, disparity in development, wages, farmers against the city dwellers, and so on.

    The danger comes when you have, say, in 20 years a new generation that didn't go through the Cultural Revolution, never went to the Long March, and who believe that China has arrived. So, this is a new phase they are moving into.

    And worldwide problems -- the biggest problem of all is climate change, energy.

    ZAKARIA: Do you think the Chinese will be willing to reduce their own CO2 emissions, which would involve in some way placing limits on their growth? It doesn't seem that they are willing to do it.

    LEE: For the time being, I think they are hoping it's not so bad. Per capita, their consumption is so low compared to the Americans.

    But when the glaciers in the Tibetan Plateau, in the Himalayas melt away, and they are doing it at about four meters per year, and the big rivers that feed off these glaciers become seasonal only with rain, and that affects their crops and their farmers along the river basin, I think they'll have to sit back and ask themselves, do you want this huge upset in your demography? Do you want Shanghai and their coastal cities to be inundated? So, I hope the message -- the penny will drop within five to 10 years.

    You look at the way the Chinese are spread across the world -- not just in Asia, you know, all over, Arabia -- all Chinese workers construct. What is it you want? New palace? New conference hall? New airport?

    They've got 1,300 million people. You've only got 300 million. So, they've got four times your number. So, and they are using those numbers.

    Every mission they have in Southeast Asia, their diplomats speak the language of the country. And in the Gulf, when I went there, I found that every mission, the Chinese mission speaks perfect Arabic. And I'm sure they do the same in Latin America and in Africa.

    ZAKARIA: This is sounding like a power to be feared.

    LEE: No, no. This is an ancient power that kept its language skills. This is not a new power. This is an old power revived. That was the lesson I took from the opening of the Olympics.

    ZAKARIA: You turn 85 tomorrow. Is there a lesson? What are the secrets to longevity and success?

    LEE: Your life span depends on what you've inherited from the two helixes you got from your mother and father. My father lived to 94. My mother died at 74 with some heart problems. I had my first heart problem when I was 74 in 1996.

    Fortunately, unlike her time, they could do an angioplasty and a stent. So that solved it.

    The day before yesterday I had atrial flutter, so I don't think I'll reach my father's 94.

    ZAKARIA: But you're going strong. I mean, you could...

    LEE: But day after tomorrow, something could go wrong with the ticker, and then, that's that.

    ZAKARIA: Do you have any regrets?

    LEE: No. I've discharged what I had to do. As long as -- every day is a bonus.

    I take every day as it comes. I see the sun rise, I see the sun set. I eat less than I want to. I swim and I cycle. I sleep well of nights, and I enjoy my work.

    But 70 to 80 percent is what I inherited from my parents.

    ZAKARIA: Lee Kuan Yew, a great pleasure to see you.

    LEE: Thank you. (COMMERCIAL BREAK)

    ZAKARIA: Thirty-three years ago this week, a young woman with a thin resume was elected leader of Britain's Conservative Party. Thus began the remarkable career of Margaret Thatcher, who both spurred and symbolized one of the most dramatic eras of change in modern history -- the rise of free markets, free trade, privatization and deregulation.

    Addressing herself to the core problems of the 1970s -- inflation, stagnation, over-regulation, slow growth -- Thatcher, and with her, Ronald Reagan, enacted their economic agenda. Initially highly controversial, as Britain and America prospered and the Soviet Union collapsed, Thatcherite ideas became main stream, accepted by the likes of Bill Clinton and Tony Blair.

    But the problems of today do not seem as easily solved by Thatcherism -- tax cuts, deregulation, privatization. People are worried about widening inequalities of wealth, soaring health care costs, the competition from emerging market countries.

    The next governing ideology is likely to be something that, while still friendly to markets and trade, finds a way to address itself to these problems and anxieties. Whoever captures this new ground will dominate the next era, as Thatcher did hers.

    That's it for GPS this week.

    But I wanted to talk to you about our question. Last week I asked: Do you think Israel will attack Iran before the next American president takes office?

    I got many responses, all well considered, but opinion was divided right down the middle. One e-mailer cautioned me, be careful what you ask. Whether your answer was yes or no, many of you were frightened at the possibility.

    For this week I want to know, who on the campaign trail do you think benefits most from the current economic situation, the Democrats or Republicans?

    As always, thank you for all your e-mails. I can't answer all of them individually, but I read them, so please keep them coming.

    You can e-mail me at You can also visit our Web site,, for highlights from this program. And you can always find our weekly podcast on the Web site and iTunes.

    That's it. Thank you. I'll see you next week. - Transcripts
    Lee's latest view.

    Hope it allows Americans a better understanding of 'others'.

    We like the US, but we cannot be blind.

    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.


  3. #3
    Officer of Engineers

    Not everyone agrees with LKY. Even Deng Xia Peng was known to tell him to take a hike with his advice.

  4. #4
    Military Professional Ray's Avatar
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    20 Aug 03
    Quote Originally Posted by Officer of Engineers View Post

    Not everyone agrees with LKY. Even Deng Xia Peng was known to tell him to take a hike with his advice.

    I have been to Singapore.

    It practices a benign Legalism.

    I am yet to find any non Chinese, be they Eurasian (White Chinese mix), Indian Singaporean or Moslems complaining!

    Deng should learn from him!

    But lets come to the issue - is his views incorrect? Let us address his views!

    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.


  5. #5
    Military Professional 667medic's Avatar
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    22 Jul 05
    Quote Originally Posted by Ray View Post

    I have been to Singapore.

    It practices a benign Legalism.

    I am yet to find any non Chinese, be they Eurasian (White Chinese mix), Indian Singaporean or Moslems complaining!

    Deng should learn from him!

    But lets come to the issue - is his views incorrect? Let us address his views!
    Sir, I beg to differ. There is a lot of anger in Singapore. People are sick of hearing the meritocracy crap. All this has done is generate an elitist minority with a population that is totally discontent with the situation. Considering how rich Singapore is, the people lead a chicken coop existence. The rat race and work stress has led to a steep fall in the population growth. The government then "imported" citizens from abroad. The situation is so pathetic that the people can't even follow the age old way of "votes" to kick out the government because most of the candidates except the ruling party can't satisfy the strict criteria...............

    People do respect LKY but he is seriously wrong when he says that Singapore is developed only due to his effort....
    Seek Save Serve Medic

  6. #6
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    27 Jan 06
    DPRK, Demokratik People's Republik of Kalifornia
    Quote Originally Posted by Ray View Post

    I have been to Singapore.

    It practices a benign Legalism.

    I am yet to find any non Chinese, be they Eurasian (White Chinese mix), Indian Singaporean or Moslems complaining!

    Deng should learn from him!

    But lets come to the issue - is his views incorrect? Let us address his views!
    Sir, are the average Singaporeans allowed to disagree with his views? Are they allowed to publicly criticize his views? Without consequences?
    "Only Nixon can go to China." -- Old Vulcan proverb.

  7. #7
    Join Date
    11 Sep 08
    Quote Originally Posted by gunnut View Post
    Sir, are the average Singaporeans allowed to disagree with his views? Are they allowed to publicly criticize his views? Without consequences?
    You failed to understand what he means by "benign Legalism", which doesn't include what you refer to. And the question is comparing apple and orange.

    If people explain everything in western democracy term, then no need to ask the question.

  8. #8
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    27 Jan 06
    DPRK, Demokratik People's Republik of Kalifornia
    Quote Originally Posted by longbow View Post
    You failed to understand what he means by "benign Legalism", which doesn't include what you refer to. And the question is comparing apple and orange.

    If people explain everything in western democracy term, then no need to ask the question.
    In that case, please explain "benign legalism" to me.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  9. #9
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    31 Jan 07
    Quote Originally Posted by gunnut View Post
    Sir, are the average Singaporeans allowed to disagree with his views? Are they allowed to publicly criticize his views? Without consequences?

    It has taken western nations a few centuries to achieve current levels of maturity and enlightenment in their societies. Even Hong Kong has taken over a century to evolve into its current form. Singapore has made remarkable progress both economically and technologically in a short span of time.

    Social systems take time in evolving and maturing.

  10. #10
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    11 Sep 08
    Quote Originally Posted by gunnut View Post
    In that case, please explain "benign legalism" to me.
    Read through Lee's interview please.

    In his grand theory, people are NOT created equally. They have different weight regarding to their right or opinion, so they shouldn't have equal freedom of expression as well we can safely say.

    The very fundation of western democracy is challenged here, so you can't accuse Singapore of lacking western democratic value - their country is not built on that on purpose.

  11. #11
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    27 Jan 06
    DPRK, Demokratik People's Republik of Kalifornia
    Quote Originally Posted by saambaarblast View Post

    It has taken western nations a few centuries to achieve current levels of maturity and enlightenment in their societies. Even Hong Kong has taken over a century to evolve into its current form. Singapore has made remarkable progress both economically and technologically in a short span of time.

    Social systems take time in evolving and maturing.
    I thought Hong Kong's prosperity came about over 4 decades or so. Definitely not a century.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  12. #12
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    27 Jan 06
    DPRK, Demokratik People's Republik of Kalifornia
    Quote Originally Posted by longbow View Post
    Read through Lee's interview please.

    In his grand theory, people are NOT created equally. They have different weight regarding to their right or opinion, so they shouldn't have equal freedom of expression as well we can safely say.

    The very fundation of western democracy is challenged here, so you can't accuse Singapore of lacking western democratic value - their country is not built on that on purpose.
    OK, then my next question is who determines who has "more weight" and who has "less weight" in the society.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  13. #13
    Join Date
    11 Sep 08
    The interview said Lee and his ruling elite inherited their power from the British.

    So, your next question should be for British then.

  14. #14
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    31 Jan 07
    Quote Originally Posted by gunnut View Post
    I thought Hong Kong's prosperity came about over 4 decades or so. Definitely not a century.

    Yes, but Hong Kong was/is a freer society than Singapore is. British institutions built and evolved over a time (along with their "benign neglect" )helped Hong Kong become an economic powerhouse.

    Chinese black money from aound the world poured into this city state.

  15. #15
    Join Date
    03 Jun 08
    in china,a lot of people believe china's system will become Singaporelike in stead of western style system.we can see a lot of Confucianism in this country's management,people in china and in singapore follow similiar mindset.

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