Lee Hsien Loong became prime minister in August 2004, and made his first official visit to the US in July 2005. At that time President Bush and Lee signed the “Strategic Framework Agreement” seeking closer cooperation between the two nations in defense and security matters. Lee visited the US again in May 2007. Our team interviewed Mr. Lee on international security matters, Singapore-US relations, and global warming. Excerpts from that interview:

Question: Ever since its founding more than 40 years ago, Singapore has been a steadfast ally of the United States. Do you see this traditional relationship becoming even closer in the years ahead, in light of the US’s ongoing battle against terrorism?

Prime Minister Lee: We have a very good relationship with America, multi-faceted, very deep and long. We’d like this to continue. We see it not just as a tactical convenience but as a fundamental confluence of interests. On anti-terrorism, obviously, because we are exposed and vulnerable, and it’s one of America’s high priorities. But also on other issues, for example from a strategic point of view, we see America having a very positive and unique role in the region, ever since the Second World War.

The landscape in Asia is changing, but America still plays a role which nobody else can play, holding the ring and fostering the stability of the region, enabling other countries to grow and prosper in a stable environment. So, that’s an important function. America’s relationship to China is crucial to the stability of the region. It’s important that that be a constructive relationship, and does not sour or go wrong.

Both governments want this relationship to move forward. President Bush is quite clear that this is one of his priorities and that he wants it to be constructive, rather than to be hostile. And the Chinese also don’t want to collide with America. They have everything to lose from a collision, because they will lose, and also their priority is growth. They can’t grow without being on good terms with their biggest market.

So that’s the positive part. The difficult part is political; the trade imbalance is a political hot potato. Not just trade, but disquiet over globalization in America and therefore, growing protectionist sentiments. That’s a reality which the Administration has to deal with.

Q: Singapore’s strategic position in the geographic heart of SE Asia gives the Lion City a unique political role to play in this part of the world. Ever since the end of the Vietnam War, this region has shown a steady and largely peaceful economic ascent. But now, with the rapid economic emergence of the two giants, China and India, how do you see Singapore’s role evolving? In the short term, and in the medium term?

Prime Minister Lee: We’d like to prosper with the region. It’s best if the region is doing well. If the region is troubled, it’s very hard to thrive just by ourselves. But at the same time we have to stay ahead of others. If we are left behind then we can become irrelevant, because we are 4.5 million people − but there are lots of cities with more than 4.5 million people in them, all over the region. We are linked up with the countries around us, our immediate neighbors in Southeast Asia and the ASEAN countries, and the larger countries in the region − China, India, Japan, Australia, New Zealand − and we need to grow with them.

Within Southeast Asia we need a firm basis for economic integration. Because if it’s just ten little economies nobody will pay attention to you. But if you are ten economies well integrated into one significant entity then you can be a partner with China, with India − you count for something! So, that’s our strategy. It means change, it means renewal within the economy. This will mean continual uncertainties for people who are planning careers, because you can’t count anymore on lifetime employment with one boss.

Q: In order to survive, Singapore has relentlessly worked to re-invent itself, moving ever upstream from an agricultural community to light industry, to banking and financial services and now to IT services. Do you see still more “reinventions” in the future?

Prime Minister Lee: It will continue in the future. Whether in manufacturing or IT, the churn is relentless: new industries come in, new technologies, and old firms either have to change or go out of business. Older workers also have to learn new skills and keep employed in new jobs. And I think that will happen. We’re bringing in new activities: there’s IT, pharmaceuticals, bio-medicals; in tourism we’re talking about integrated resorts. In financial services we have fund managers, we have investment houses, we have hedge funds; there are many players in the eco-system.

And I think that this has to be the case. There’s no static, fixed position. Because what we can do well today, other countries will be able to do tomorrow. And if we want to remain in the game then we have to keep on doing new things which others haven’t quite caught up to yet.

Our biggest trading partners include Malaysia and Indonesia, our nearest neighbors; we have a lot of investments in them, and we get a lot of tourists from them.

In terms of our strategic view, we all see the logic of banding together. That is why we work together in ASEAN, and also with other countries in the Asia/Pacific, whether in APEC, or in the UN, or in the World Trade Organization (WTO). It’s not without effort. America’s relations with Canada or Mexico are quite consuming, too!

Q: The topic of global warming is a contentious one. Some nations take this issue very seriously and have taken active steps to try to counter it. Other counties see the matter mainly as media hype. Still others are taking a “wait and see” stance. What is Singapore’s official stance? And, if you believe global warming is a reality, does the Government have plans to prepare for various future scenarios?

Prime Minister Lee: I believe that it is real, it is manmade, and it is getting more serious. That is the weight of scientific opinion. There are still a few doubters and skeptics, but the mainstream consensus is that the signal is unambiguous. This is something that is happening. It is speeding up. It would be safer if we could slow it down, although we are not going to be able to reverse this. Even slowing it down is going to be very difficult, and we have to work together. No country can tackle this alone. The big countries and the big polluters have to take the lead. America has to be part of this, as do China and India. And we in Singapore, which will be affected by climate change, especially by rising sea levels. And who knows what other implications there will be for the region? We will work with the international community towards a good agreement to succeed Kyoto because Kyoto itself is not getting anywhere. So we need a new deal. It will be very difficult to work this out because there will be many participants, too, and this is going to be very contentious. The question is: who is going to cut the emissions, and who is going to pay the bill? That will have to be negotiated.

We have a problem. Within Singapore, we make sure that we keep our environment pristine. 4.5 million people in a little island. If we mess it up, that’s all we have. There’s no place we can run away to! But in terms of greenhouse gas emissions, because we don’t have hydropower, we can’t have a nuclear power station, therefore everything we get is from fossil fuels, imported. We have no choice. So whatever the agreement is which follows Kyoto has to be fair to countries in situations like ours. We described ourselves as geographically disadvantaged, when talking about the Law of the Sea, and now energy-wise and with greenhouse gases too we are at a disadvantage.

But human beings are resilient, and adaptable, and so I’m sure that societies will adapt; it’s only a question of how great the disruption will be, and what will be the cost. Singa¬pore has to keep being somewhat special, in terms of our own environment. But at the same time we recognize that other cities (in the region) are picking up ideas from us. Many Chinese cities are watching us, closely, and they’ve made great strides. Environmentally, that’s good, but economically, it means more competition. So we have to work harder to stay ahead.

Q: Singapore has recently signed free trade agreements with its key trading partners, including the US, Japan, Australia. What are the key benefits to Singapore from these agreements?

Prime Minister Lee: These agreements link us to our key trading partners in a strategic way. Our preference is to have a multi-lateral agreement under the WTO, and have a Doha round settlement. When you’re down to the last mile, you’ve got to seal the deal. And encourage all the players, including America and Europe, and also the developing countries, to make that extra effort and seal the deal. Because if you don’t close it now, and you put it aside, the world moves on, and in three or maybe five years time, the world will have changed and we’ll have to come back and do it all over again. It may then take us another ten years. During which time you’ll have protectionist pressures and many set-backs.

So that’s our first preference. It may still happen, but it looks increasingly unlikely. So complementing that, we believe that it’s important to have free trade agreements with our key trading partners which buttress our position, and give us something extra over and above what you can negotiate with 190 countries in the WTO. In case things go wrong, we have this safety raft and some protection against arbitrary behavior by our trading partners. So we have America, we’ve got Japan, Australia, New Zealand, India. We’re now negotiating with China. And within ASEAN, we have our own free trade agreement too.