SINGAPORE - Founding Prime Minister Lee Kuan Yew's influence on Singapore runs deep, but he made sure he prepared the country to move on and not "be stuck in the Lee Kuan Yew mode" of governance, Prime Minister Lee Hsien Loong said.

There was a tremendous outpouring of grief when Mr Lee died in March this year, but confidence in Singapore was not shaken, he noted.

On the contrary, it was strengthened.

"The stock market didn't crash, investors didn't panic, confidence was maintained. In fact, at the end of that, I think confidence was strengthened. I think we're not in a bad spot," Mr Lee said in an interview with TIME magazine earlier this month.

A transcript of the interview was released to Singapore media on Thursday.

PM Lee was asked how much of his own thinking was influenced by his father, Mr Lee, whose death on March 23 at the age of 91 triggered an outpouring of grief nationwide.

PM Lee said his father had a great deal of influence on his own thinking on politics, culture, world affairs and life itself.

But the late Mr Lee - who stepped down as Prime Minister in 1990 and left the Cabinet in 2011 - was also very good at preparing Singapore to carry on beyond him, giving his successors "room to do things their way and pursue policies as they felt necessary", he said.

"Only very rarely did he assert a strong view and asked us to please rethink something... But otherwise, he allowed evolution to take place so that Singapore would carry on beyond him," PM Lee said.

In the interview, PM Lee noted that as Singapore celebrates its 50th year of independence this year, the country has kept its mission "substantially intact". "That is quite an achievement", he added.

Singapore, however, needs to get its economy to the next level as other countries in Asia snap at its heels.

"If we don't get to the next level, then we will have malaise and the angst, and even disillusionment, which you see in many developed countries."

As more people graduate from universities, Mr Lee said they expect to have jobs as PMETs - Professionals, Managers, Executives or Technicians.

In Singapore, 30 per cent of students go through public universities, and PM Lee said this proportion will go up to 40 per cent, not counting those who attend private or overseas universities.

"For us to have an economy which can generate that quality of jobs and uplift their living standards, and at the same time uplift those who didn't go to university where you don't have a wide gap between tertiary-educated and the rest... I think that is a big challenge."

And PM Lee said addressing this challege will require both growth and people as well as "qualitatively different jobs, qualitatively more efficient overall economy".

Freedom of expression was another talking point in the interview, and PM Lee was asked how he reconciled his awareness of youth's aspirations with the recent conviction of 16-year-old Amos Yee for a video containing offensive remarks and legal action taken against blogger Roy Ngerng for a defamatory blogpost.

PM Lee said there is "always a balance between freedom and the rule of law". "Freedom is never totally unlimited", he said, adding that it operates within certain constraints.

He stressed that giving offence to another religious or ethnic group or language is a serious matter in a multiracial and multi-religious society such as Singapore.

"Even in the recent couple of years, we have seen many cases where one Internet post injudiciously can overnight cause a humongous row."

PM Lee said it is easier to give, and take offence, with the Internet. And it is necessary to "learn where the limits are".

Referring to the defamation case against Mr Ngerng, PM Lee said: "You have freedom of speech, you can criticise the Government as much as you like on policy, on substance, on competence."

But it is a serious matter to make a defamatory allegation that the Prime Minister is guilty of criminal misappropriation of the pension funds of Singaporeans, he added.

"If it's true, the Prime Minister should be charged and jailed. If it's not true, the matter must be clarified and the best way to do that is by settling in Court."

PM Lee added: "There must be clarity. Somebody says very bad things about me, I don't clear my name, do I deserve to be here or not?"

"In an Asian society, particularly, if the leader can't maintain his standing, he doesn't deserve to be there. He will soon be gone."

PM Lee also said the Government welcomes criticisms, all the better if they are raised in Parliament.

But he observed that the problem is "criticism comes snidely and round the corner."

"When we face the critics across the aisle in (Parliament) with the television cameras on, their criticism withers. It's very sad."

He added: "The trouble is the critics know that they don't always have a good argument and prefer to do this by whispers and nudges, rather than by direct, open debate."

On a lighter note, Mr Lee was asked if he was ever a rebellious teenager.

His answer: "You don't always agree with your parents, but I never had long hair or wore bell-bottoms."

During the interview, Mr Lee also recapped views shared at a conference in Singapore earlier this month, when he was asked about the challenges facing Singapore going forward.

He said the challenges depended on the timeframe. In the next 10 years, it was growing the Singapore economy. Demography will be a big challenge 25 years down the road, and in 50 years, the challenge would be about having a sense of national identity.

Forging such a national identity is not a simple task, with various elements in the mix including race, religion, language and values, he noted.

PM Lee said religion is a stronger motivator than ever before. LGBT - lesbian, gay, bisexual and transgender - issues can become a divisive factor, as could ethnic and external relations.

He cited as an example the question of how China's rise to power could impact Singapore's Malays and Indians.

"How will they feel if the perspective shifts and you find yourself tilted towards China? Will that not cause tensions, at least, tidal stresses? Divisions, we hope not. But these are issues which we worry about for 50 years," he said.

"You cannot assume that people will automatically say 'I am a Singaporean', and there's no further sub-division or sub-classification which matters to him."