THE United States can no longer be the world's customer, said Prime Minister Lee Hsien Loong as he pointed to the need for a rebalancing of how the global economy and countries operated.

In an interview with the CNBC channel aired last night, he acknowledged that this could mean a shift away from Asia's current export-driven model.

PUSHING AHEAD WITH COOPERATION 'Several of the countries are pre-occupied also with political issues, consuming domestic political issues, political succession in some cases. And then against this background, to pay attention to Asean cooperation and to push it forward - that's tough. ... more

As consumption in the US comes down, Asia will have to take up the slack.

'There will have to be a global rebalancing because we cannot expect the Americans to be consumers of things made all over the world. And the rest of the world as savers, lending money to the US to buy things from you,' he said.

But he said that this shift would be difficult given the large, structural changes that have to be made. 'I mean we can't just tell households: 'Go and spend more money', because they have their needs now, their needs in the future,' he said on the programme, CNBC Conversations.

'When they grow old they need to save. They need to save for their retirement, what to save it in. And these are structural and life-cycle matters which have to be taken into account.'

On top of that, some small countries like Singapore simply had no way of moving away from an export-driven model.

Domestic consumption here, said PM Lee, was too small to take in everything that was produced locally.

'We are part of the world economy. We make chips, we make pharmaceuticals, we make petrochemicals. We consume maybe 1 per cent of what we make in these things. Probably less,' he said.

'We are making for the world. We buy from the world, we make from the world, for the world...That's how we prosper. That's how the global economy prospers.'

Read the full story in today's edition of The Straits Times.