Singapore's success story will be forever entwined with Lee Kuan Yew, its first prime minister. After breaking away from Malaysia in 1965, the elder Lee's iron-fisted government used industrialization, trade and tourism to create an affluent, highly educated society. But success had its price. In exchange for riches, Singaporeans are expected not to challenge the ruling People's Action Party, or PAP, and to accept a rather domineering nanny state. In recent years the government has loosened its control over society under current Prime Minister Goh Chok Tong, who took over from the senior Lee in 1990. In July Goh legalized bar-top dancing and bungee-jumping. Today you can even import chewing gum, under certain conditions. Hsien Loong, at 51, will be the torchbearer for a new generation of leaders groomed to deal with younger Singaporeans, who have little connection with his father's era and who want the PAP to change with the times. "The days of authoritarian leaders are over in Singapore," says Bilveer Singh, a political scientist at the National University of Singapore. "People are now willing to speak out."

In typical Singaporean style, of course, this, too, is part of a broader strategy. Facing growing competition in manufacturing from China, Singapore is seeking to become the service hub for Asia. That means creating a lively, freewheeling place where younger, well-traveled, creative people want to visit, work and live. As Minister of Trade George Yeo once remarked, "In Singapore, fun is serious business."

But don't think revolution. Lee will disappoint those younger Singaporeans who want the PAP to change dramatically, even cede its grip on power. Born in 1952, he studied mathematics and computer science at Cambridge, and at Harvard's Kennedy School of Government. Beginning his career in the Singapore Armed Forces, he rose through the ranks to become a brigadier general. In 1984 he traded his military position for a Parliament post, serving only six years before being appointed deputy prime minister, prompting talk of a Lee family dynasty. "We've known about Lee Hsien Loong for some time," says Kadir. "People are curious about when [his ascension to —prime minister] will take place, but not if it will take place."

Singapore's next election is not due until early 2007, but Goh recently said he would step aside at least two years early to allow Lee to settle into the job. In recent weeks the deputy prime minister has been the focus of a concerted media campaign to soften his image, leading to speculation he will take the top post sometime next year. He's been photographed shaking hands with average citizens—often in casual clothes instead of a business suit—to show he's a man of the people. The makeover has even drawn comments from Goh, who joked during a speech last August: "I hear... that female students loved the red T shirt he wore at a recent discussion. They think he is quite hip after all."

And overwhelmingly, citizens seem to agree that the younger Lee is the right man to run Singapore. As Finance minister, he has developed a reputation for a tough, no-nonsense leadership style, and his relations with the press are far more cordial than his father's. When he chooses, he can be engaging, intelligent and charming. At the same time, no one doubts that Lee can be as tough as his father. In late November he warned the pilots union of state-owned Singapore Airlines against "challenging the government" after it voted to sack its entire leadership over wage cuts. Quoting his father from a similar union showdown in 1980, Lee said: "I don't want to do you in, but I won't let anybody do Singapore in."

Such toughness has its virtues. Many of Singapore's shrewdest strategies are intended to open up the economy to foreign competition and force Singaporeans up the value chain, no matter what domestic constituencies say. Its mandarin ruling class point out that a more responsive, populist government would find it harder to maintain this demanding growth strategy. The lingering presence of Lee Kuan Yew, who retains tremendous influence as the so-called Senior Minister, should also temper those worries.

Nevertheless, the younger Lee will need to step out of that shadow if he is to step onto the world stage. He shares with his father the concern that as Singapore becomes more open to the world, it could lose its cultural distinctiveness. But the son sounds more willing to take the risks that globalization brings. Besides, he says, "what is the alternative to globalization? If you opt out you become like Myanmar. Globalization allows us to export one and a half times our GDP in goods and services, brings us investments and tourists. Without globalization we wouldn't exist." It is going to be a daunting balancing act. But, then again, he was born for the job.
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