The promotion of former Brigadier-General Lee Hsien Loong is seen as assuring his claim to the prime ministership after Prime Minister Goh Chok Tong confirmed he would retire before the next elections in 2007.

A weekend cabinet reshuffle has also seen 78-year-old Lee Kuan Yew retain the post of Senior Minister - the second most powerful position in the Singapore government.

Mr Lee Hsien Loong, 49, is also a deputy prime minister and remains head of the island state's central bank, the Monetary Authority of Singapore. His younger brother, Lee Hsien Yang, is chief executive of the state-owned telecommunications company, Singtel.

But the finance portfolio will be a tough stepping stone for Mr Lee Hsien Loong with the Singapore economy caught in its worst recession since the country gained its independence in the early 1960s.

The government has forecast a 3 per cent decline in GDP this year compared with growth of 9.9 per cent last year.

Exports have slumped sharply and 17,000 people lost their jobs in the first nine months of this year.

Mr Goh, 60, who was regarded as a stop-gap leader when he succeeded Mr Lee Kuan Yew as prime minister in 1990, has said he intends to stand down before the next elections but must ensure Singapore's economic recovery before he retires.

"The number one task for me and my colleagues is how to ensure the smooth transition in renewing the officers and the captain," he said after securing a landslide election victory two weeks ago.

The ruling People's Action Party - which has held unbroken power for four decades - won 82 out of 84 parliamentary seats against a demoralised opposition.

In announcing the selection of 25 new government candidates, Mr Goh warned of the dangers of political inbreeding.

"We do not want to have inbreeding so you notice that we were not looking for people only from the civil service or the Singapore armed forces, because no matter how bright they are, too much similarity would mean too much inbreeding," he said.

The cabinet reshuffle saw the appointment of seven ministers from among the newly elected MPs and the retirement of a number of veteran leaders, including 75-year-old Richard Hu, who had held the finance post for 16 years. Mr Goh has foreshadowed further ministerial changes early next year.

                                                            Home