One Man's View of the World

by Lee Kuan Yew

A: Convertibility, I see them as possibly aiming for. But convertibility does not mean a fair exchange rate. You can convert and undervalue your currency to increase your exports. They will let it go up but gradually. They will always want the advantage of lower cost exports. It’s an export-driven economy and not an economy driven by domestic consumption as in the US, and the US wants them to convert to that system. I think eventually they will be forced to convert to that system but then you must have a change in the mentality of your middle and lower-middle classes. You must encourage them to consume and not simply save. I’m quite convinced that in the end domestic consumption is their only ultimate source of sustainable growth. But for that to happen, you must also redistribute growth, because those in the inland provinces don’t have the spending power. You must have all boats rising.