Singapore's founding father said unemployment is the city-state's biggest problem and that the society must adapt or risk stagnating like Hong Kong or Taiwan.
"Our main worry now is unemployment ... It is simply that world conditions have changed and have made our products and services no longer competitive versus low-cost countries," Lee Kuan-yew said in a speech late Friday.
Lee said Singapore, where unemployment is at a record 4.9 percent, could become like Hong Kong and Taiwan, which both refused to adapt to change and now have unemployment rates above 5 percent.
"To keep Hong Kong wages up, it delayed its integration with China's economy, continuing to restrict the entry of professionals and skilled workers from the mainland," said Lee, who stepped down as prime minister in 1990 but remains an influential force under the title of senior minister.
"Taiwan has been reluctant to accept new economic realities ... It restricted Taiwanese investment in China," he added.
Lee, who turns 80 next month, formed the city-state's first government in 1965 after Singapore split from Malaysia, turning the small, malaria-infested island into a gleaming business center that now hosts the offices of over 1,000 international companies.
The city-state of 4 million is currently mired in its worst recorded economic slump.
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