Singapore has to keep reinventing itself as global environment changes: SM Lee

ASTANA – Singapore has had to reinvent itself from time to time when circumstances changed, and must continue to adapt as it navigates an increasingly uncertain global environment, Senior Minister Lee Hsien Loong said on Aug 27.

The Republic’s progress has not been a straight line, and policies have sometimes had to be adjusted when they did not work as intended, he said in a lecture at Nazarbayev University in Kazakhstan’s capital, where he was conferred an Honorary Professorship.

“We have repeatedly had to reinvent ourselves, in order to overcome setbacks and changed circumstances, and resume our journey forward,” SM Lee said.

“In the current uncertain and troubled world, we have to respond with equal resourcefulness and resolve.”

SM Lee noted that Singapore and Kazakhstan faced different circumstances and might make different policy choices, but said the broader lesson was the need to build systems capable of “continuously adapting and readapting”.

These have to rest on strong fundamentals such as state capacity, market discipline and inclusive policies, allowing for adjustments when circumstances change, or policies fail to work as intended.

“That is what Singapore has had to do, again and again,” he said.

SM Lee said Singapore was now at “another turning point”, after benefiting – for much of the six decades since independence – from a rules-based global trading system and a broad push towards economic integration and mutual prosperity.

In the Asia-Pacific, the United States provided the security that allowed countries to grow in peace, while China re-entered the world economy in the 1980s and grew rapidly within the same framework, creating what SM Lee called “the best of both worlds” for Asian countries.

But the strategic environment has changed significantly, he said. Major power rivalry is now intense, with the US reassessing its approach to the world, national security and resilience taking precedence over economic well-being, and trade dependencies being weaponised.

“Multilateralism is breaking down,” SM Lee said. “This is a much less conducive environment for countries to grow and develop.”

It was against this changed backdrop that Singapore embarked on an Economic Strategies Review to rethink its position and chart the way forward, SM Lee said.

Launched in August 2025, the review brought together government, business and union representatives to chart Singapore’s longer-term economic strategy.

Its final recommendations, released in May, focused on keeping Singapore competitive and adaptable, while building greater resilience against global shocks

As it had done at previous major turning points, Singapore formed a tripartite committee bringing together government ministers, business leaders and union representatives for the review.

“They are invaluable not just for generating new ideas, but also to build consensus and commitment amongst businesses, unions and the population on the way forward,” he said.

Staying open, remaking the economy

SM Lee laid out five areas Singapore must focus on as it adapts to the new environment.

First, remain open and outward-looking. While bigger countries might be able to promote self-sufficiency by erecting trade barriers, this was not an option for Singapore.

“Closing ourselves off and turning inwards is simply impossible,” he said. “We will always have to do business with the world, even as we diversify and secure our own supply chains.”

This was why Singapore was growing ties with non-traditional partners such as Kazakhstan and other Central Asian economies.

Second, continue supporting multilateralism.

Where consensus among all World Trade Organization members is not possible, SM Lee said “coalitions of the willing” could pursue shared interests while remaining within the framework.

Third, maintain the approach of combining market discipline with an activist state.

This means the Government creating the conditions for enterprise to thrive, actively investing in infrastructure and skills, developing capabilities and opening new markets.

Fourth, Singapore must remake its economy “again and again”.

This includes encouraging firms to embrace artificial intelligence and preparing workers for ensuing changes and disruptions.

It must also continue to invest in areas where Singapore is strong, such as its air hub, container port and financial sector.

Finally, and “most critically”, Singaporeans have to remain united.

SM Lee said society had to guard against racial and religious divisions, frictions between old and new citizens, and divides between rich and poor.

“For us to stay united, growth has to be inclusive, and has to benefit everyone. No one should be left behind,” he said.

Lessons from Singapore’s journey

Speaking to an audience of more than 120 students, academics, government officials and business representatives, SM Lee shared how Singapore had repeatedly changed its economic strategy since the 1950s.

Faced with a young and growing population and stagnating entrepot trade after World War II, Singapore initially pursued industrialisation and merger with Malaysia to gain a larger domestic market.

After separation in 1965, Singapore had to manufacture for export instead. It sought investments from multinational corporations, decided to build an international financial centre and invested in its port.

But wages had been restrained, and by the late 1970s, companies had little incentive to raise productivity or invest in workers. So the Government changed course and launched a “corrective wage policy”.

It changed course again following the first post-independence recession in 1985, after high wage costs made Singapore uncompetitive. It subsequently pushed towards higher-value and more technology-intensive activities and invested heavily in reskilling workers.

During the 1997 Asian financial crisis, Singapore took advantage of a flight to safety to transform its financial sector, while from the 2000s, it developed a knowledge-based economy by investing in research and development, education and infrastructure.

SM Lee cautioned that Singapore’s experience could not simply be applied elsewhere, as each country’s economic strategy depended on its geography, history, culture and strategic situation.

“We don’t claim to have all the answers, not even to our own problems,” he said.

The lecture reflected longstanding links between Nazarbayev University and Singapore.

Since 2013, the university’s Graduate School of Public Policy has partnered with the Lee Kuan Yew School of Public Policy to train more than 800 Kazakh officials in leadership and governance.

Singaporean academics have also played roles at the university. Professor Hui Weng Tat from the LKY School was dean of its Graduate School of Public Policy from 2015 to 2025, while Professor Ng Huck-Hui is currently Nazarbayev University’s vice-president and dean of its School of Medicine.

During a question-and-answer segment, SM Lee was asked whether Kazakhstan could become like Singapore, given their similarities and economic ambitions.

SM Lee said that while there were similarities, including a focus on human resources, artificial intelligence, technology, manufacturing and financial services, both countries differed significantly in size, natural resources and their external environments.

But some principles that had guided Singapore could apply more broadly, he said, including investing in people, ensuring good government, making sound economic choices and ensuring the benefits of growth are widely shared.

“Make sure that growth is inclusive, make sure that people feel that they have a stake in this,” SM Lee said.

Asked if Singapore faced challenges in encouraging young people who studied or worked overseas to return home, SM Lee said there had to be opportunities for them to use their skills, contribute and succeed.

“The economy must grow, and as the economy grows, it must create the opportunities and the possibility for the human potential and spirit to be fulfilled,” he said.

SM Lee added that young people also needed to develop a sense of commitment to the society that had invested in them, even if they spent time studying or working abroad.

Concluding his lecture, he said: “I hope through exchanging views and learning from each other’s experiences, Kazakhstan and Singapore will both find better ways forward, and so improve our peoples’ lives.”