More from MM Lee Kuan Yew

(continued from previous posting. This is an interview by a reporter by the way.. :P)

I want to ask about ministerial salaries. Your view on how well the system has worked to bring in talent?

Every time there is a pay revision to catch up with benchmarks, this debate will come up again.

But you ask yourself: Do you want the present system where it's completely above board?

And while we are not recruiting all of the very best, we are recruiting some of the very best, because quite a few of the very best do not want to give up their private lifestyle and their family life.

Yes, you can get a person to give up and make a sacrifice for one term.

But will you get a man or woman to serve successive terms, gain experience, become a really competent person, a very competent minister and sacrifice his family, their welfare, their comforts and their children's future and education, going abroad etc? It's not possible.

They're at the top of their cohort. We talent spot. We headhunt for people who not only have just academic qualifications but track records of performance.

How did I learn this? Because in the early days, looking for talent, I put in bright PhDs. Didn't work. We even had a Rhodes scholar.

We found that we needed other qualities: character, motivation, judgment, stability, temperament, ability to connect with people.

So, finally, we worked out a system where we looked at a person in totality: How does he perform in real life, whether as a businessman, as a CEO, as a doctor, as a lawyer, whatever?

Supposing I had served just one term. Would I have known this? No. Because I've served since 1959, and successive elections we fine-tuned and learned in the process.

You go back to a revolving-door government: the first two years you learn how to do your job; next two, three years, you begin to do the job. Before you know where you are, you're out. Next government comes in.

And that's what's happening in many parts of the world.

Carefully consider.

You know, the cure for all this talk is really a good dose of incompetent government.

You get that alternative and you'll never put Singapore together again: Humpty Dumpty cannot be put together again... and your asset values will disappear, your apartment will be worth a fraction of what it is, your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries, foreign workers.

Just think. We have a population of three-point-something (million) and we are carrying and able to give jobs to another 1.3 million people.

How does that happen? Why can't the 1.3 million people get jobs in their own countries?

It must be something that we're doing which is right, that creates economic prosperity, that creates growth, that requires talented people to join us, to help us produce all these extra goods and services.

You know the absurdity of all this?

The total cost of ministers' salaries, of all office holders, the present cost is 0.13 per cent of government expenditure (and 0.022 per cent of GDP).

It amounts to $46 million. We are quarrelling about whether we should pay them $46 million or $36 million, or better still $26 million. So you save $20 million and jeopardise an economy of $210 billion? (This was the size of Singapore's GDP in 2006.)

What are we talking about?

You know fund managers? I'm chairman of the Government of Singapore Investment Corporation (GIC) and we put $5 billion, $10 billion with top fund managers, just to benchmark how we are performing against the best in the market.

We have about three or four top US investors and we track what they do and we compare what we are doing.

And you have to pay them not 0.13 per cent. Win or lose, whether the stocks go up or down, they take their cut. You ask GIC employees; I'm the chairman of GIC. I'm being paid as Minister Mentor, the Senior Minister before that, and even as Prime Minister before that, a fraction of what the top managers in GIC earn.

But they are handling over US$100 billion (S$151 billion). They make a mistake, we lose $10, $20, $30 billion overnight when the stock market collapses.

So for the average family earning $1,500, $3,000, we are talking of astronomical figures.

But for people in government like me, having to deal with these sums of money which we have accumulated through the sweat of our brow over the last 40 years, you have to pay the market rate or the man will up stakes and join Morgan Stanley or Lehman Brothers or Goldman Sachs. And then you've got an incompetent man and you've lost money, by the billions.

So get a sense of proportion.

Would you like to share how much you are paid?

It's in the Budget. I'm paid $2.7 million. A top lawyer, which I could easily have become, today earns $4 million. And he doesn't have to carry this responsibility. All he's got to do is advise his client. Win or lose, that's the client's loss or gain.

But there are top people in other countries who don't get paid as much but who are also corruption-free, who have also done a good job.

Let me put the American system and then you will understand why if we ran that system, we're in trouble.

If you become President of the United States like Bill Clinton was, or George W. Bush, you earn about less than a million dollars. But you have the White House, you have Airforce One...When you leave office, you write your memoirs, you're paid by the tens of millions. And Bill Clinton, for every speech he makes, it's at least a million or half a million or he doesn't go. And he starts a foundation. They all do this.

You take Alan Greenspan. He sacrificed his earnings as a very expert financial specialist and he took on as a job as chairman of the Federal Reserve, at a pittance. As Paul Volker did.

But he's already got a huge sum of money and when he leaves, he can increase the huge sum of money because of the standing that he has.

He makes a statement and says there could be a recession in the second half of this year and the world stock market goes down.

Can we afford a revolving-door government? Suppose after five years, I go out and say 'OK, I write my memoirs, I become a lobbyist'. How does that get the country going?

I say this is a system we worked out. It's above board, it's working. And if you're going to quarrel about $46 million, up or down another $10 or $20 million, I say you have no sense of proportion; you don't know what life is about. And just think, what would your apartment be worth with a poor government and the economy down?

We talk about the Government as fu mu guan (a Chinese phrase that refers to public officials as parents who care for their children). So people hope that leaders are not there for the money, that they are willing to make that extra sacrifice.

Those are admirable sentiments, but we live in the real world. It took a lot of persuasion to get Ng Eng Hen, Vivian Balakrishnan, Balaji Sadasivan to give up their lucrative practices and become ministers and ministers of state, and no guarantee they would succeed.

Ng Eng Hen six years ago, when he first entered politics, was making $4.5 million and he came in and took a job that paid him about $600,000.

Balaji was earning also in the same category. He was a top brain surgeon with very high skills. He took a chance. When he was not made a minister in the selection process, Goh Chok Tong, then Prime Minister, said 'Would you like to go back to your private practice?'

He says 'No, I'm going to do this as a senior minister of state'. But he's made sufficient to look after his family and children, and his wife is a doctor. So I think that's a sacrifice.

I started off as a socialist, believing that all men should be given equal opportunities and equal rewards. I know that doesn't work.

You have competition and reward the winner.

You look at golf, tennis, swimming, badminton, anything you like. The first prize is an enormous sum. And to get that first prize, you start spending your life, sweating your guts out to master a certain skill which (is) admired and supported by hundreds, if not thousands of millions of people watching you.

It is a competitive world in which we live and if we can't compete, we're not going to live well.