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Singapore is known as a 'nanny state' — and its leader has no apologies

  • Prime Minister Lee Hsien Loong says it is right for Singaporeans to hold "very high expectations" of their government
  • In a CNBC interview covering a wide range of topics, Lee discussed jobs, the economic challenges facing the city-state, and leadership succession

Tiny Singapore's leap from developing world to advanced economy within a single generation depended on a strong government hand in external relations, economic policies, citizens' retirement savings and more — leading to a perception that the country is a "nanny state."

Even though Singapore is now a developed economy — the only country with that status in Southeast Asia — Singaporeans still hold high expectations of their government. And they're right to do so, Prime Minister Lee Hsien Loong told CNBC.

"Well if you asked a Singaporean, on the one hand they'll say, 'Let us do our own things.' On the other hand, when an issue comes out, they'll ask, 'What is the government doing about it?' And they have very high expectations of what the government should be doing, which is right because they've voted for the government and they expect the government to be able to perform. So we have to keep that balance," Lee said.

Singapore Prime Minister Lee Hsien Loong greets guests during an official visit to the White House on August 2, 2016.
Pete Marovich | Pool | Getty Images
Singapore Prime Minister Lee Hsien Loong greets guests during an official visit to the White House on August 2, 2016.

"No government prospers by saying, 'I don't need to do anything. Just by being there, we have made the country thrive.' You have to have an idea of what you need to do, what needs to be fixed, what can be improved, what we should now imagine together which we didn't previously imagine. And having thought of it, decide to go it. And that's the government's role," he said.

Jobs in a fast-changing world

Lee said a major challenge the government faces domestically, as in many developed countries, is making sure its workforce can adapt.

The government's strategy is three-fold: get the education system to produce people with the right skills, upgrade and refresh the expertise of those already in the workforce, and transform 23 industries with different plans for each.

Those strategies are laid out in a report by the Committee on the Future Economy, set up last year to address challenges arising from stagnating economic growth, an aging population and technological disruption.

"You have here to deal with a very tangible and concrete way with individual industries, individual firms and not just in a stratospheric, macro, philosophical approach," Lee said. "And you need to have a specific sense for each industry: what are the skills which are needed, which are the market areas that can be exploited, what are the changes that the companies need to make, how can we help the companies to achieve these changes, and if there has to be some rationalization, how can we help them to shake out and make it less painful."

Singapore's trade-reliant economy is expected to grow between 2 percent and 3 percent this year — a level Lee described as "very significant" by developed countries' standards.

The question of succession

Beyond economic longevity, there have also been questions about the country's leadership succession. Lee has been prime minister since 2004 and has said he intends to step down after the next general election, which must be held by January 2021.

Lee, the eldest son of Singapore's founding Prime Minister Lee Kuan Yew, has said publicly that it is up to his cabinet of young ministers to decide who should lead them going forward.

"They have to establish themselves among themselves, they have to work out their relationships and assess one another. Publicly, they have to gain the confidence of the public and show the public what they are able to do, and in time, they will have to come to a consensus as to who should be leading the team into the next stage, beyond me," said the 65-year-old leader.

"Who's to emerge? Well, time will tell. It cannot be a very long time, because the clock ticks and waits for no man."

Here's the full transcript of Prime Minister Lee Hsien Loong's interview with CNBC.