In a wide-ranging interview with the Weekend Australian this week, Goh said Singapore's growing self-confidence, notwithstanding recent economic travails, combined with the demands of the global economy, were underwriting substantial social and political change.

The link between economic success in a globalising, information-dominated economy with social and political change and liberalisation is close in Goh's mind. While he does not comment on Australia, it is a linkage policy-makers here could explore to their benefit.

Singapore was confronted with a savage recession last year, which Goh has tried to turn to long-term advantage.

``We are using the recession last year and slow growth this year to put across the message to Singaporeans that the problems we are faced with go beyond the current recession,'' he said.

``Our future calculations have to take into account that China will be a very strong competitor in almost every field.

``So we have to restructure the economy. Where do we make a good living in 10 to 15 years? This is a very basic question, but not easy to answer. We are moving into life sciences, and making more investment in education. We're trying to change the people's attitude -- become more entrepreneurial, don't look towards the government for a solution all the time.''

This involves a fairly big change for a society that has traditionally been regarded as conformist. There has been a big effort to promote the arts and creativity.

``You can't just expect people to be more innovative and entrepreneurial when you don't have the other side of the human mind to be free to explore things and be creative,'' Goh says. ``We came to the conclusion years ago that for Singapore to succeed you must have the other side, you must have the arts.''

This affects foreign investment, because attracting foreign investment means attracting people. ``Even multinational companies and professionals who come to Singapore don't come just for work. The whole place must be pleasant for them.

``But that's the superficial level. At a deeper level we believe there's a link between the creative mind and creativity in production.''

And the $64 million question; does this mean greater press freedom? ``That is so. I have taken a careful approach, and my colleagues agree with me. Let this evolve. Better don't try for a big bang because things might get out of control, people might just debate robustly and the good results might not be forthcoming.

``But we all know we've got to allow more discussion and a more pluralistic type of environment.''

Globalisation plays a part in pushing this trend, says Goh, but Singapore's growing confidence would have led the island state there anyway. Singapore has always been forced to adapt and is given too little credit for its willingness to make serious course corrections and not stick to a single model.

Goh sees good signs for the Singapore economy in the emerging US recovery, but thinks the other two traditional engines of its growth, Japan and the surrounding Southeast Asian region, offer little prospect in the next couple of years.

He is concerned about the Southeast Asian economy in the short term. But he believes one bright spot is the agreement that ASEAN made to seek free trade with China.

``This shows ASEAN's leaders realise they need to liberalise their economies and look outward,'' he says.

Moreover, he thinks politics can drive not only economic restructuring but good trade and investment outcomes. Involving China piques Japan's interests, and the US is certainly not going to abdicate influence in the region, so Washington too will become more involved.

Goh is straightforward about the risks posed by instability in Indonesia. ``It's a matter of deep concern to us. Without a stable Indonesia, the region will be much more uncomfortable. It will be much more difficult for us to attract investment in the whole area, and of course there's the security concern.''

He believes Washington understands the importance of a stable and growing Indonesia but is still ``not as engaged as fully as we would like it to be from a regional point of view''.

Goh's mixture of hard-headed realism, determined and continued restructuring, and his linking of economic and social liberalisation represent an important model for South-East Asia -- a region whose success or failure is of paramount importance to Australia.

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