The 1MDB scandal has roiled Singapore's financial center. Now, a public family feud threatens stability in the tightly-controlled city-state.
By Asian standards, it translates to breaking a stigma: Lee Hsien Yang wrote on Facebook that he is leaving Singapore «for the foreseeable future». The reason? He has lost faith in Singapore's government and its leader. «I have no desire to leave. Hsien Loong is the only reason for my departure», he wrote.
(Excerpt from Lee Hsien Yang's letter. Click here to read it in full)
The passage is explosive because Lee Hsien Yang (pictured below) isn't just another Singaporean disgruntled with the tightly-controlled city-state and the close-knit group of people who control almost all aspects of government, politics, domestic business, regulation and public life. He is part of Singapore's widely-respected «first family»: the son of Singapore's founder, Lee Kuan Yew and the brother of Lee Hsien Loong, Singapore's current Prime Minister.
It is a stunning rebuke of Lee Hsien Loong, especially since Lee Wei Ling, Lee Kuan Yew's daughter, has sided with Hsieng Yang's criticism.
Family Seat In Dispute
It is shocking for Asian families to air their dirty laundry in public, and especially in the glaring eye of international media scrutiny, as is the case here – and it speaks to how alienated the siblings have become after Lee Kuan Yew's death. In fact, Lee Wei Ling already went public with criticism last year that her brother, the current PM, was using his role to further a personal agenda – and that he wasn't living up to the legacy of their much-revered father.
The conflict is rooted in differing views of Lee Kuan Yew's legacy: keen to avoid a cult of hero worship, Singapore's founder had ordered his home on 38 Oxley Road to be torn down after his death. Lee Hsien Loong apparently opposed his father's wishes, even before he died in 2015 – much to the distress of his two siblings.
Grooming Son?
(Prime Minister Lee Hsien Loong with wife Ho Ching, Image: Keystone)
The differences between the Prime Minister and his siblings are so dramatic that Lee Hsien Yang and his family plan to leave the country. Hsien Yang accuses his brother of nepotism, pointing to his wife's running of one of Singapore's sovereign wealth funds Temasek. He also accuses the PM of grooming his son, the 30-year-old Li Hongyi, as a political successor.
The PM, who is abroad on holidays, was quick to hit back at the allegations. On Facebook, Lee Hsien Loong said he denied that he and his wife, Ho Ching, have any political ambitions for their son, and voiced regret at the public attack. He vowed to address the matter when he returns this weekend (pictured below).
Threat to Stability
Fraternal strife presents a major threat to Singapore's stability: the political stability of the young state, which turned 50 two years ago, is one of its most important characteristics. This seemed to be the case before the death of Lee Kuan Yew in 2015, and served as the basis for Singapore's unique story as one of the most prosperous countries in the world after cutting ties to Malaysia.
Finance is a huge part of Singapore's success, and the industry is a massive beneficiary of the city's political stability and practically inexistent corruption. This stability is now under threat, as the finance center is also roiled by the billion-dollar graft scandal surrounding Malaysia's 1MDB.
Impact on Finance
If the public fight has befouled the air, very little is likely to change immediately. But Singapore's politicians should form a clear view of the city's mid- and long-term future. This includes political questions but also a long hard look at the piling up of official mandates for the Lee family: the PM's wife, Ho Ching, as head of powerful state fund Temasek is a prime example.
Even the now-renegade son Lee Hsien Yang has benefited from what is referred to as «Singapore, Inc.,» holding various positions tied to roles of power and privilege in Singapore. He used to run telecoms provider Singtel, served as a Brigadier-General in the military, and is currently chairman of Singapore’s Civil Aviation Authority.
The family dispute begs the question of how to break up the tight-knight circle which holds most key government positions – a move which will have implications for the financial center and banks in Singapore as well.
