The 80-year-old founding father lauded Goh, 63, for seeing Singapore through major difficulties like the Asian financial crisis in 1997 and last year's Severe Acute Respiratory Syndrome (SARS) epidemic.

"Despite testing times with Indonesia under President Habibie and with Malaysia under Prime Minister Mahathir Mohamad, he kept relations in working order," Lee said ahead of his 52-year-old son Lee Hsien Loong's swearing-in as prime minister.

After the mercurial B. J. Habibie took over from ousted Indonesian dictator Suharto in 1998, relations with Singapore ran into a number of problems. He was once said to have dismissed Singapore as a "little red dot" on the map.

Mahathir, who retired last year after leading Malaysia for 22 years, often sparred with Singapore over a number of still outstanding bilateral issues, particularly the cost of raw water supplied by Malaysia to Singapore.

"Now Singapore is in good shape," Lee said, adding that Goh "has put in place a younger team of leaders who have enough experience to see Singapore through a difficult decade."

"He has done well for all of us. I am proud and happy that I was a member of his team. We worked well together," said Lee, who had openly said before that Goh, an economist and former shipping executive, was not his first choice to succeed him.

"Although he is not a natural politician, by determination and sustained effort, he learned to become an effective public speaker," Lee said.

"He has added to what my generation built and created more opportunities for our people in so many fields," he added.

Lee Kuan Yew led the first generation of leaders who struggled for independence from Britain and brought Singapore into the Malaysian federation in 1963.

Predominantly ethnic Chinese Singapore was ejected from the federation amid differences over racial policies with Kuala Lumpur and became an independent republic on August 9, 1965.

Goh was the leader of the second generation which steered Singapore into the 21st century, and Lee Hsien Loong will now lead the third generation of ministers made up of businessmen, technocrats, former military officers and seasoned politicians.

                                                      Home