While some, aware of the considerable reach held by the senior Lee - the nation's first prime minister from 1969-90 - have favored Lee Hsien Loong's appointment as a form of dynastic succession, the phased transition of Goh has done much to counter this perception.

Indeed, Lee Hsien Loong, whose Chinese name means "emergent dragon", was groomed as early as 1984 for a career in politics, not by the senior Lee, but by Goh Chok Tong.

It was Goh, then a deputy prime minister, who first encouraged Lee Hsien Loong to join public office, a move initially resisted by Lee Kuan Yew for fear of raising concerns about the practice of nepotism in his administration.

Born in 1952, the younger Lee studied mathematics and computer science at Cambridge University and received a master's degree in public administration from Harvard University's Kennedy School of Government.

He began his career in the Singapore Armed Forces and rose through the ranks to become a brigadier-general. In 1984 he traded his military position for a parliamentary post, serving only six years before being appointed deputy prime minister. In addition to this role, Lee Hsien Loong is currently Singapore's finance minister and chairman of its central bank.

While he is often seen as a throwback to the more conservative days of his father, Lee Hsien Loong has been quick to affirm that the present generation of Singaporeans, being more exposed and international in outlook, is different from that of his father's time. This suggests a distinct change in governing style that will require Lee Hsien Loong to be less authoritarian than his father was.

Lee Hsien Loong has been quick to stake his imprint on three agendas. One of his government's top three priorities, he has said, would be to boost Singapore's sagging birthrate - which last year fell to its lowest level since independence in 1965.

At 1.19 births per couple, Singapore's birthrate in 2003 became the lowest in the history of this ultramodern state. Should present trends continue, Singapore's population, currently at 4 million, will be shrinking by 2020.

If the past is any indication, Lee Hsien Loong's new cabinet is poised to offer tax breaks and cash incentives for Singaporeans to have more children. A new immigration policy would also make it easier for professionals from India, China and other countries to become Singaporean citizens.

Lee Hsien Loong has also promised to upgrade Singapore's relationship with China; the tie has already seen Singapore's exports to the emerging Asian powerhouse increase by 15% last year.

But this move has encountered some difficulties of late, as Lee Hsien Loong was accused of supporting the independent forces in Taiwan when he made a private visit to meet with Taiwanese President Chen Shui-bian on July 10.

The visit took a bad turn after Beijing claimed Lee Hsien Loong was also accompanied by Tony Tan, Singapore's defense minister, an accusation that Singapore has vehemently denied. Beijing has put Lee Hsien Loong on the defensive, affirming that Singapore would have to "reassume all responsibilities" for the visit.

Despite the setback, Lee Hsien Loong will continue to woo China. He has also said he will pursue "openness" and encourage more civic participation on the domestic front. Critics, however, have long argued that Singapore's pace of liberalization continues to be glacially slow, and in the long run there may be little that Lee Hsien Loong will actually achieve in the political arena.

The ruling party has in effect hobbled political dissent throughout Singapore's short history by employing a range of electoral regulations and court cases against opposition party leaders. Thus Singaporeans have become too risk-averse to be involved in politics.

As it is, the form of liberalization that Lee Hsieng Loong speaks about would revolve on allowing more women to participate in parliament, an issue he has agreed to pursue with vigor.

Out of a total 94 members of parliament (MPs), only 15 are women - 10 elected and five nominated. As more women distinguish themselves in their professional careers, Lee Hsien Loong has promised to improved their access and standing in parliament.

But in spite of Lee Hsieng Loong's attempts to address these three issues, a fourth is no less important: Singapore's overall competitiveness in the international economy.

Since 1996 Singapore's authorities have accelerated deregulation in the financial and telecommunications sectors. Data from the US Department of Commerce on returns to US companies show that, compared with the Asian average, Singapore no longer provides the superior rate of return it once did. Once a premium economy charging premium prices, it is now a less-than-premium economy - but is still charging premium prices.

Although Lee Hsien Loong has stated his determination to create a more flexible wage structure, some analysts feel that such wage-centered strategies may not suffice in reinventing the Singapore economy. At best, such measures will merely be perfunctory, because Singaporean wages to begin with have not deviated from market levels. What matters more are land, regulatory and transportation costs, which the Singaporean government exercises considerable control over.

According to Manu Bhaskaran, the head of Washington-based advisory firm Centennial Research, "Singapore's competitiveness problem is cumulatively due to distortions in land prices [and its effects on wages and rentals], high transportation costs resulting from the government's forceful anti-congestion policies [which drive up the cost of distribution and logistics] and high regulatory costs."

Indeed, the prices of major inputs - land, labor and capital - in Singapore are substantially influenced by the government. This is because the government, through its Housing Development Authority, owns most of the land, effectively becoming the monopoly supplier.

The incremental supply of labor is controlled by the government through its grip on foreign-worker inflows. Singapore's financial capital is also heavily influenced by government, as the biggest players are all government-linked companies with ties that extend to the Lee family. Lee Hsien Loong's wife, Madam Ho Ching, for instance, is the chairperson of Temasek Holdings, Singapore's state-owned investment company, and his brother Lee Hsien Yang is the chief executive officer of Singapore Telecommunications Ltd (SingTel). Lee Kuan Yew has also remained a key board member of various government-linked companies.

Hence, without adequate measures to retrench the role of the state, the economy under Lee Hsien Loong will restructure in the manner it always has, with companies laying off workers, cutting wages, squeezing subcontractors' margins and forcing landlords to cut rentals.

Aside from producing deflationary headwinds in Singapore's economy, such moves are bound to make Lee Hsien Loong appear even more aloof and indifferent to the welfare of the average Singaporean - a reputation he has been battling hard to disprove.

Meanwhile, some of the challenges facing Singapore are growing due to Malaysia's and other neighboring countries' plans to lower their operation costs. These competitive challenges will encourage further policy reforms to pare down the cost of operation in Singapore.

But even then, to be truly effective Lee Hsien Loong has to reconsider the role of government in the economy, manifested most profoundly in the form of powerful government-linked companies such as Temasek, Sembawang and SingTel.

Without a bold and conceptual rethink of the island state's economic and social policies, Lee Hsien Loong will likely govern Singapore with the same substance and essence of what his legendary father has bequeathed. When that occurs, charges of dynastic succession may well be too strong to rebuke.

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