Singapore’s Prime Minister Lee Hsien Loong to step down after 20 years

Singapore’s Prime Minister Lee Hsien Loong will step down next month after nearly 20 years in power, handing over to his deputy in what will be only the third leadership transition in the Asian financial hub’s modern history.

Lawrence Wong, deputy prime minister and finance minister, will become Singapore’s leader on May 15 after being named heir apparent in 2022 as part of the ruling People’s Action party’s long-standing succession plan.

The departure of Lee, the son of Singapore’s founding leader Lee Kuan Yew, raises expectations for a consequential general election that could be held as soon as this year.

The PAP, which has governed Singapore since independence, earned one of the lowest vote shares in the 2020 election in the city-state’s history. The party has been seeking to recover public support and bolster Singapore’s status as a trade and financial hub amid an increasingly febrile geopolitical backdrop.

In a post on social media platform X, Lee, who has served as prime minister since 2004, asked Singaporeans “to give Lawrence and his team your full support, and work with them to create a brighter future for Singapore”.

Wong said in a video statement he never expected to be asked to be the prime minister when he entered politics in 2011. “I accept this responsibility with humility and a deep sense of duty,” he said.

The succession marks an important moment in Singapore’s modern history, as just the third time the leadership baton has been passed since independence in 1965.

While planning to ensure a smooth succession had been under way for years, the process has also faced a number of setbacks.

Lee, 72, had intended to step down before turning 70, plans that were derailed by the Covid-19 pandemic.

The PAP’s succession strategy was thrown into disarray in 2021 after deputy prime minister Heng Swee Keat resigned as leader of the so-called fourth-generation team, a group of younger ministers lined up to take the reins of the governing party.

Wong, 51, was announced as 4G leader in April 2022, and will become only the second Singaporean premier who is not a member of the Lee family.

He will face a difficult task in maintaining Singapore’s delicate geopolitical balancing act. A trading entrepot, Singapore has evolved into one of Asia’s main financial hubs while maintaining its neutrality between east and west. But its open economy makes it vulnerable to macroeconomic issues and US-China rivalry.

Wong warned last year that aspects of the Washington-Beijing rift appeared “insurmountable” and that tensions over the Taiwan Strait were becoming the region’s “most dangerous flashpoint”.

He also faces a challenging domestic environment, with rising discontent over inequality and rising costs of living, in particular housing.

Linda Lim, a Singaporean and professor emerita of business at the University of Michigan who knew Wong when he studied economics there, said he would take over at a time when Singapore faces many new internal and external challenges, including to its economic model.

“This is the opportunity for [Wong] and the rest of his leadership team to show that they can meet these challenges with fresh ideas and a more participatory democracy and inclusive economy than has hitherto characterised the nation’s political system.”

Manu Bhaskaran, an economist and chief executive of consultancy Centennial Asia Advisors, said another question following the “well choreographed” succession was whether there would be an early general election. Singapore is due to hold elections by November 2025, but is widely expected to do so as soon as September this year.

“There is a lot of talk that the elections will be held well before the deadline. I would think Wong would want his own mandate to lead,” Bhaskaran said.

In the longer term, Wong will have to contend with a range of geopolitical challenges as well as maintain Singapore’s competitiveness given the rise of rivals such as Dubai and a high-cost structure, Bhaskaran added.

“We have done well over the past few decades but how do you maintain that? That is his big challenge.”