When asked if it was possible for a "Singapore on the Thames", Prime Minister Lee Hsien Loong said he did not think there will be a "London by the Merlion".

PM Lee made this remark on Nov. 6 at a dialogue session moderated by Bloomberg Editor-in-Chief John Micklethwait at Bloomberg's New Economy Forum at Capella Singapore.

Different context

Micklethwait had asked PM Lee for his view on the hope by some British people that Britain modeled itself after Singapore post-Brexit.

The United Kingdom held a referendum on June 23, 2016, where they voted to exit the European Union. The event was given the name "Brexit".

Responding to the question, PM Lee said: "It is not possible... I don't think Singapore can become like London, London can become like Singapore. Our histories are completely different. We are small, we are in the middle... of an environment, which is much less predictable than even Britain's environment in Europe".

Earlier in the dialogue, Micklethwait asked whether Singapore's healthcare and education model was something other countries could emulate.

Using CPF as example

Similar to his response to Britain modeling itself after Singapore, PM Lee said that it was path dependent.

Using the Central Provident Fund (CPF) as an example, he said Singapore was only able to implement it because it built this system progressively starting from a point where Singapore was not so well-off.

He noted that as income rose over time, CPF was implemented as a compulsory savings scheme and people accepted that as an institution that could be used for healthcare, housing and children's tertiary education fees.

On the other hand, he said that if such a system was not built up over a long period of development, "a lot of people will get angry" if "hypothethically" one-third of their income was put into a compulsory savings fund.

Different expenditure

Elaborating on differences between both countries, PM Lee noted that Britain has a system of state welfare and a government that accounted for 40 to 45 per cent of its GDP, while the Singapore government's expenditure accounted for 16 to 17 per cent of its own GDP.

"So, to say that you're going to become like Singapore, are you going to give up two-thirds of your government spending and state pensions and national health?" asked PM Lee.

Noting another difference between both countries in terms of trade, PM Lee said EU makes up 20 per cent of Singapore's trade while for Britain, EU made up 70 per cent.

Different way to prosper

When Micklethwait asked PM Lee if "Singapore on the Thames" is a "pipe dream" that would never happen, PM Lee said that Britain would have to "find a different way to prosper having made the decision to leave the EU".

He said that Britain could look at Singapore and use some of its ideas, but he did not think that it was feasible to take one society's solution and "just plonk it" on another.

When asked if Singapore was willing to sign a trade agreement with post-Brexit Britain, PM Lee said Singapore would do so.

At present it was possible to sign a short form deal where the terms offered to the EU would apply to Britain, he said.

PM Lee hoped that in due course a "more substantive agreement" with Britain would be worked out.

Top image from Lee Hsien Loong's Facebook page