Singapore Government Press Release

Media Division, Ministry of Information and The Arts,

36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963.

Tel: 3757794/5







Q: "That report from Tim Lister. And joining me now from Singapore is Lee Kuan Yew. Senior Minister, welcome to the programme."


Mr Lee: "Thank you. Happy to be interviewed."


Q: "I�d like to begin, first, by asking you for your reaction to the trial and the imprisonment of Anwar Ibrahim?"


Mr Lee: "I thought you�re going to ask me my reaction to what I�ve just seen on your television screen. It made me laugh. It�s the typical Western caricature. If we were in such a parlous state, if we were so oppressive and authoritarian, would I waste my time being interviewed by late night for an Australian audience and to give publicity to my crazy opposition? But this is part of the Western media, so, we play the game. You�re asking me?"


Q: "Well, I�m glad you�re enjoying it, anyway. We�ll come to that in a little while, but first, if we can, on a much more serious matter, I�d like to ask for your reaction to the trail and imprisonment of Anwar Ibrahim in Malaysia?"


Mr Lee: "Well, that�s not a laughing matter. It�s been a sad saga for over six months. It�s done some damage to, I think, the people of Malaysia, most of all, who have seen their political landscape somewhat battered as a result of these happenings and very saddening for Malaysia�s neighbours. Malaysia was a successful political system that had passed power from one Prime Minister to another four times and Dr Mahathir has spent 16 years grooming Anwar Ibrahim and to have this happen was quite a shock. But it�s happened and I think..."


Q: "So, what message, what message... I�m sorry, what message do you think this sends to the world now about what type of government is in Malaysia at the present time?"


Mr Lee: "Well, I don�t subscribe to the view that it�s all black and white. I don�t think it�s that simple. Perhaps in my next book, I�ll be able to write, in retrospect, more freely about it. But at the moment, it�s a very difficult period and I wish the country well because we are their neighbours and we want to see them prosper. And, first, they�ve got to get back on track and I hope this saga would come to an end in such a way that Malaysia will get back on track. The economy is not doing badly, but it�s the political mood that�s not quite right."


Q: "I wonder, do you think your old sparring partner, Dr Mahathir, has gone too far this time?"


Mr Lee: "Well, I wouldn�t call him my "old sparring partner". We were adversaries when I was in Malaysia as an MP from 1963 to 1965. Then, long before he became Prime Minister, whilst he was still an ordinary minister, we came to an understanding that whatever our differences were on basic political issues as to how Singapore should be run or how Malaysia should be run that we would get a working relationship going and for the, I think, nine years that I was Prime Minister when he was Prime Minister, from 1981 to 1990, we had a good working relationship. But I wouldn�t like to call him my "sparring partner". You don�t spar with Dr Mahathir. He�s a very serious-minded man who takes a very dim view of people who take liberties with him. So, I do not take liberties with him. When I make a move, it�s a very considered one and put in the best possible light so as not to be offensive. And that goes for my answers to you."


Q: "While we�re taking about Malaysia, though, were you surprised by the intensity of the reaction to your memoirs, the reaction that was provoked there in Malaysia?"


Mr Lee: "Not really, I knew that they would go into war dances. You must remember that I�ve been through all this many, many times over the years. So, I know the rituals and they had to go through this war dance because the facts must offend those who would rather not have the facts taken out. But everything that I, anything that I put into that book, I examined and re-examined several times and had it looked at by several of my colleagues and then by independent observers, or historians, really, students, people who have done history, and checked the records, both in London, in Canberra, in Wellington and in Washington to make quite sure that what I�ve said accords with what other people at the same time observed. So, but, you know..."


Q: "Among those facts?"


Mr Lee: "Among those facts are some very unpleasant..."


Q: "Among..."


Mr Lee: "Sorry? Well, there was some..."


Q: "Well, I was going to say that among those facts, you blamed Malaysian politicians for inciting race riots in Singapore in 1964?"


Mr Lee: "I�m not blaming them. I�m just saying that that was what happened and that�s corroborated by what diplomats and service chiefs, British service chiefs, reported to their bosses in London. Now, they were at that time facing confrontation from Indonesia and they were having problems within Malaysia. And that was also what Australian diplomats in Kuala Lumpur and Singapore reported to Canberra. So, it wasn�t a wild statement by me. It was a fact."


Q: "The Chinese have all too often been made scapegoats in Southeast Asia, as I�m sure you know, and it must have been especially frustrating for you to watch the resurgence of violent anti-Chines riots in Indonesia quite recently?"


Mr Lee: "There again, I am conscribed by the necessities of international relations from speaking my mind. I mean, I�m not a commentator. I am part of the Government of Singapore. I may no longer be the Prime Minister, but my words cannot be dissociated from that of the Government and, therefore, I have to mind my Ps and my Qs. I have to do that. It�s necessary."


Q: "The fear is, of course, though, that this violence could at some point get even worse and here, right at the moment, we have the example of Kosovo to remind us just how destabilising ethnic hatred can be?"


Mr Lee: "Well, I think it�s gone beyond just the Chinese ethnic minority in Indonesia. My worry now is not for the Chinese ethnic minority because they�ve already been so battered. There are very few shops left standing to burn and I think those that are, have owners who are resigned to another round if it has to be. I think the concern now, and one which Australians must share with us, is that something much more fundamental may be happening. You have Christians versus Muslims, which I think is a very dangerous turn of events. Then you have Malays and Dayaks against Madurese and you�ve got in East Timor the beginnings of a real big problem because you�ve got irregulars being armed, pro- or anti-independence forces, and it can only lead to more bloodshed, disorder and eventually, chaos. So, it must be... I think the worries have gone beyond the worries of last year. I mean, Indonesia needs a strong, stable government that has the support of the people and only such a government will be able to tell its Armed Forces what is necessary to be done to maintain law and order. That�s something which we must all hope for."


Q: "What should the Indonesian Government be doing now?"


Mr Lee: "You are asking me to make a comment on what you would like to say, or you would think you could find me, get me to put in words? No, I cannot. I have many thoughts. None of them..."


Q: "I suppose, after all your years, yes...?"


Mr Lee: "None of my thoughts can be put into words, not on this programme."


Q: "To go back to the economic crisis that began all of this, you�ve said that the IMF made serious mistakes in Indonesia and that if they�d done more to back President Suharto, then he�d have seen it through, that he was good at crisis management?"


Mr Lee: "I didn�t put it so simply. That�s too simplistic an exposition. I did not think that and I did not say that. I thought the IMF did the best they could with the knowledge they had. That knowledge turned out to be incomplete and some of the measures they recommended were subsequently faulted by other economists, including those in the World Bank. But where I believe the IMF brought things to a head with Suharto was trying to reform him at the same time as putting the economy right. Here was a 75, 76-year-old man who�s been in office for 32 years and they wanted to change his form of government, his style of government, which included favours to his friends and members of his family, and that brought a head-on collision with the President, with the then-President, who was not going to stand for it, and that really brought about Indonesia�s collapse. I mean, had they just..."


Q: "There is a view in fact that... Go ahead."


Mr Lee: "Had they just concentrated on getting the economy right without changing his style of government, he would have gone along with it and the economy would not have been so badly damaged. The rupiah would never have gone down to 17,000, 18,000 to one dollar. I mean, from 2,500 to 17,500 within a period of less than eight months. It�s just impossible and the economy had to collapse once you rubbished a currency so thoroughly."


Q: "There is a view, though, that much of the reason for the Asian collapse goes back to precisely what you were talking about, corruption and nepotism, and I know that in the past, you have talked about this being a debasement of Confucian values?"


Mr Lee: "Now, there�s no doubt that the problems were aggravated by corruption, collusion, nepotism, unwise borrowings and more unwise investments in superfluous real estate and industrial plants. But the basic problem why it happened... I mean, this is now nearly two years since the event and everybody has had time to study the reasons for it. And to me, the basic reason -- and it�s not just my belief; it�s one which World Bank Chief Economist Joseph Stiglitz also believes in -- was the opening up of the capital markets. Once you allowed free capital flows, and they were encouraged to open up their markets by the US Treasury, by the IMF, by the European finance ministers who wanted their banks to do business in this booming East Asia and they were told that if they open up, have free capital movements in and out, they�ll get capital, they�ll boom. They listened, they lifted their foreign exchange controls. In Thailand, in as late as 1992, they had foreign exchange controls. Indonesia did not completely open up until the 1990s. The banks came in, lent freely. Who wouldn�t take money that was on offer at such low rates? Unwisely, we lent to their private sector and, more unwisely, invested in resort hotels, in office blocks, in superfluous excess-capacity plants. And when the slightest hint of trouble was smelt, everybody rushed for the door and brought the house down."


Q: "So, do you take a similar view, then, to Dr Mahathir that the economic crisis, in a way, was manufactured by out-of-control currency speculators in giant hedge funds?"


Mr Lee: "No, no, no, that�s a subsequent incident following the opening up of the currency markets, of the capital markets. Had they never opened up their capital markets, these huge borrowings wouldn�t have taken place, they would have continued to make growth until they hit a wall. Because of their own shortcomings, the walls would have been lack of qualified manpower, engineers, accountants to man their factories. But they could have made another, for another ten, 15 years, six, seven, eight, nine per cent growth on their own without foreign borrowings. But the foreign borrowings destroyed them. Because once they were in debt,..."


Q: "Can I ask you...?"


Mr Lee: "No, once they were in debt, in the case of Indonesia, to the tune of $84 billion, which they didn�t know their private sector had borrowed, and when the lenders pulled out, the private sector rushed into the market to buy dollars before it got more dear to pay. That collapsed the economy. That�s really what happened."


Q: "Can I ask you what you think is the outlook for the region this coming year? I mean, can you see an end to this crisis?"


Mr Lee: "Well, prices have hit rock bottom, the stock markets recovered, currency values have stabilised, interest rates have gone down. I notice Stanley Fischer, Number Two in the IMF, sounded upbeat in yesterday�s report, market report. He thought that short of a downturn in the international situation, these countries were out of their gravest problems, out of their gravest difficulties. He�s not saying they�re out of the woods yet because there�s a lot of restructuring of banks, of companies to be done and getting their financial systems right and that�s going to take several years. But I think the worst is over. I�m not sure..."


Q: "You know that our Prime Minister, John Howard, has declared Australia "the economic strongman of Asia". Now, how do you think Australia is placed at the present moment among Asian nations?"


Mr Lee: "If you go by growth rates, I think Australia is still behind the People�s Republic of China and Taiwan. So, I would say it�s one of the strongmen in Asia, but it�s more than Southeast Asia..."


Q: "Let�s say Southeast Asia?"


Mr Lee: "Sorry?"


Q: "Let�s say Southeast Asia?"


Mr Lee: "Well, yes, the strongman of Southeast Asia. That�s not difficult."


Q: "You�ve been quite critical of Australia, haven�t you, in the past? I mean, as late 1994, you said they�re not motivated, they don�t have intensity of purpose, and you once said we were in danger, the Australians, that is, of becoming "the poor White thrash of Asia"?"


Mr Lee: "That�s another of those mythical things which have been attributed to me. But I did say, but I did say..."


Q: "You never said that?"


Mr Lee: "No, it�s been attributed to me. I don�t use such language. I picked up a quote from somewhere, but I did say that Australians would do much better if their workers were better motivated and I think it is the product of being a lucky country with a wealth of natural resources and the way in which Australia had suddenly boomed in the 1970s, 1960s and 1970s, and everybody thinks they have, they ought to have two cars in the porch and a boat on a trailer and a four-day week or four-and-a-half. But the world�s been a little tougher on the commodity producers, which is still a large part of your economy, and it�s taken you several years to switch away into value-added activities rather than just extraction and sales of raw materials."


Q: "Tell me, do you suppose that Australia will always be viewed as an outsider in Southeast Asia, a nation, if you like, of transplanted Europeans?"


Mr Lee: "That�s difficult to be dogmatic about. You will always be different from the rest of Asia because you�re not Asians. Yours is a European civilisation or a British civilisation with, now, overtones of the Americans and increasingly, over the years, with some sprinkling of Asians. But whether or not you�re a part of Asia depends upon on how your economy develops. Now, if your economy is geared into Asia and you rise with Asia�s growth -- and I think Asia will grow and will need your raw materials and will need your wide open spaces for its tourists -- then I think you will become a part of Asia because there�ll be too much toing and froing to pretend that you are not a part of Asia. Geography cannot be changed and because of your proximity to the rest of Asia, unless you want to divorce yourself psychologically from Asia, I think you will become a part of it."


Q: "Finally, sir, with globalisation and the pressures for conformity with American and European ideas on democracy, do you suppose the unique Asian way that you�ve championed will effectively become a thing of the past?"


Mr Lee: "That is another myth, that I have championed the Asian way. All I have done is to point out that we have certain historical traditions and habits and values. Therefore, it�s not easy just to become like the Americans. Wherever possible, if it�s going to help us to improve our wealth, our well-being, we will incorporate whatever the Americans or anybody else offers us. But to throw away ourselves and become somebody else, that�s not possible. Asians... Well, I better not speak about all Asians; there�s a lot of other people in Asia who might think differently. But I do know from my experience meeting Chinese, Japanese, Koreans, Vietnamese, that East Asians have a deep and abiding faith in their own cultural values and traditions because these values and traditions have seen their societies through ups and downs, floods, famine, pestilence, drought and the family and the extended family and their obligations to each other have been able to help them survive these crises without strong central government. They are not going to abandon all those values in a hurry.


"The West believes that with strong government, which will last forever, you can look after single mothers and they can have as many children as they like and the State will provide, I don�t believe that. I think the West can afford it, we can�t, and I don�t mean financially. I think we can�t, as a society, because we�ll run into deep trouble once we don�t have the family unit to rear the next generation.


"Now, you ask me whether we want to change that? Absolutely not. Do I want single families? No. Do I want the troubles that may come with children of single families? I say, no. Do I want to pay for such families to be brought into the world? You put that to a referendum in Singapore, they�d say, absolutely no. So, we are going to be different. But when it comes to a competitive economy, an information-age society in which you have to compete with the whole world, now, that�s different. Where our old habits are a hindrance in running that race, we�ve got to change those habits. But we cannot re-invent ourselves."


Q: "Thank you very much, sir. That�s all we�ve got time for. I hope at least we�ve been able to shed some light on those "myths" about Lee Kuan Yew. Thank you for joining us."


Mr Lee: "Thank you."