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YI: China is growing bigger and bigger. Should other Asian countries feel threatened by this rapid growth?

Mahbubani: I think they should be concerned about the rise of China. The good news is that the Chinese government is aware that many of its neighbors are worried about the rise of China. And so the Chinese government has made a strong and profound effort to share its prosperity with its neighbors. The fastest growing trade flows in the world today are in East Asia, certainly between China and its neighbors. So the number one trading partner for South Korea is China, the number one trading partner for Japan is China, and trade flows between India and China are growing rapidly. So, as long as we can create a cooperative fabric in the region where we all benefit from China's growth, rather than suffer from it, then I don't see that as a problem for the region.

YI: India is not far behind China and despite the East Asia community, do you see a new regional-political configuration shaping up?

Mahbubani: I think the rise of India is very good news for this region. It's like --if you have an aircraft on the runway taking off. China was providing one engine of growth, and India now provides another engine of growth, then these two big engines of growth will carry Asia with them. In the case of Singapore, for example, we have benefited significantly from the growth of China and likewise, we have benefited significantly from the growth of India. And we hope that what Singapore has been able to do, can also be done by other Southeast Asian countries. If we look at the longer history of Southeast Asia, Southeast Asia has been the meeting point of Indian and Chinese civilizations. If you look at the underlying cultural fabric of Indonesia and Malaysia, the Ramayana, for example, well- known in Java, shows how traditional linkages between these societies, goes back for 2000 years. Now, these links were cut off by the European colonial period for 200 years or so. Now they're being restored and I think with the growing awareness of our own common cultural origins, can also bring our societies closer together and also enable economic cooperation to take place. So I see the rise of India as a plus for the region, together with the rise of China.

YI: How do you see Singapore's future, vis-à-vis its bigger but not necessarily stronger neighbors Malaysia and Indonesia?

Mahbubani: They say geography is destiny. Singapore cannot go anywhere except remain in Southeast Asia. So, I think Singapore has vested interest in the prosperity of Malaysia and Indonesia. But it is also a fact - and I'm not giving secrets away when I say that Singapore has also had very troubled relationship with Malaysia, mostly with Malaysia than with Indonesia. But even with Indonesia recently regarding the haze, we can see difficulties in the Indonesia-Singapore relationship also. I think the challenge that Singapore has is to convince both Malaysia and Indonesia that Singapore's success is only going to be a benefit for Malaysia and Indonesia. If you look at economic terms, if you want to have access to markets --say a flower market in Holland-- if you have a very efficient, logistical hub in Singapore, it creates enormous opportunities for all kinds of industries in Malaysia and Indonesia to connect with the rest of the world. Developing an efficient logistical hub requires a lot of investment, requires a lot of technology, modern management and why re-invent the wheel? In the developed countries, when you have an efficient city, for example, that efficient city is not seen not as a parasite, but as an economic asset. New York city helps to promote growth to all the areas around it. London promotes growth to all the regions around it. It's not a zero sum game. So, Singapore's success doesn't come at the cost of its neighbors. Singapore's success actually adds economic value to its neighbors. Now, that is what I call modern, rational thinking, which has propelled the West ahead. It's what we need to see in this region. It's quite hard to explain that to people, sometimes, because they keep thinking: if Singapore gains in prosperity, it's at the expense of its neighbors. That's not the case at all.

YI: In other words, linkages between Singapore, Malaysia and Indonesia are very important, a kind of symbiotic relationship?

Mahbubani: Very much so. This goes back to my question whether Asians can think. If Malaysia, Singapore and Indonesia were three companies and not three countries, they would instantly and automatically see the value of cooperating with each other, because as companies they would say, "I can cooperate with him, his profits will rise, my profits will rise and we should cooperate." If you took away the political considerations, if you took away the politicians from the exercise, there is no doubt that if you did it on purely economic considerations, there could be tremendous synergy between the three countries. And frankly, if we want to compete against China, if we want to compete against India, we cannot do it on our own because they have far bigger domestic markets. Mumbai and Chennai do not fight against each other. They don't say if you grow it's bad for me. They assume if Mumbai grow, Chennai grows, both will grow. In the same way, if Kuala Lumpur grows, Singapore grows, Jakarta grows, it would be great. So this zero sum mentality reflects a 19th century worldview, which is sad and tragic, but we have it today. Take Europe, for example, the port of Rotterdam serves all of western Europe. No one says, hey, why should we depend on Rotterdam? The question is who provides the most efficient means to export my products. So, if you look at it from purely, economic, rational terms, there's so much that can be done. In fact, it's actually quite tragic that so little has been done to connect these three countries. And if you can get a change of mindset among the economic planners of Malaysia, Singapore and Indonesia, we can be the leading edge of the growth of Southeast Asia. But what's happening now? Vietnam is taking off on its own. Ironically, remember how ASEAN started? Because we were afraid of Vietnam, we thought the communists in Vietnam would take over Southeast Asia. The domino theory. It's an amazing paradox of history that while Asian countries were taking off, Vietnam was so far behind. Today, Vietnam is racing far, far ahead of Malaysia, Singapore and Indonesia. That's because they are applying rational economics in a way that we are not doing. And incidentally, Singapore is benefiting from it too, because the Vietnamese do not see Singapore as a threat. They do not see Singapore as a liability. They see Singapore as a great opportunity to develop their country. It's amazing that a country so far away, can see what many Malaysians cannot see, that Singapore is not a liability but an asset. And that's tragic.

YI: Terrorism is a scourge for many countries in Asia. How should this problem be addressed?

Mahbubani: I think it needs to be addressed at two levels. First, you need to fight terrorism brutally, because terrorists do not believe in compromise. If there is terrorist threat, we must suppress it, we must combat it. That military dimension has to be done. But that's only one part of the picture. The other part is to ensure that terrorist organizations do not get new recruits. We should find out what are the underlying causes that lead people to join these terrorist organizations and deprive them of that. That is why, for example, I think the growth of these jihadist movements is bad for all of us. Indonesia has suffered the most from the jihadist explosions than Singapore has. To stop these movements from growing we also have to address other issues, take care of political problems that fuel these movements. And this is where the West should cooperate more with us in terms of unearthing the root causes of this terrorism, and finding ways and means of addressing them.

YI: You have done two books, what is your next project?

Mahbubani: My next book is on the rise of Asia. I am now convinced that the 21st century may be the Asian century. So, I want to explain why Asia is now succeeding. In fact, I've signed a contract with my publisher in New York, and I've written about one-third to one-half of the book. So I hope to finish it sometime in 2007, because there is a tremendous amount of global interest today, on the rise of Asia. In fact, I get invitations to speak almost every week from all around the world, from the United States, Chile, from Europe to come and explain the rise of Asia. So there is a huge demand out there. At the same time, I have found that many of the Western books and writings don't understand Asia at all. In fact, there's a kind of wishful thinking in the West that Asia will stumble once again. So, I want to explain why they are wrong and why the rise of Asia this time is very real.

YI: Do you have a title - as provocative as your previous book?

Mahbubani: I'm playing around with two titles. One is 'The Greatest Asian Century.' As you know, in the history of Asia, different parts of Asia have succeeded at different times. There was no one time when all of them succeeded. So, now you have Northeast Asia --South Korea, Japan and now China. Then you have many Southeast Asian countries succeeding, India succeeding. We have this huge arc of prosperity in Asia. So I call this the greatest Asian century ever in the history of our times. The other title I'm thinking about is 'The Return of History,' to balance Francis Fukuyama's essay The End of History, where he says that all of us will become carbon copies or replicas of the West. But that's not going to happen. In fact, I foresee a great Asian cultural renaissance, sometime in the next 10 to 20 years coming.

YI: On a more personal note, you've traveled widely, around the world. Where is the ideal place you would like to settle down?

Mahbubani: I think the ideal place is Singapore, and I say this not out of political correctness. I say this out of genuine conviction that the center of world history in the 17th and 18th centuries was in Europe. Then in the 19th and 20th centuries, it's brought across the Atlantic and transatlantic area where the center of world history is. So by the year 2050, three of the four largest economies in the world will be in Asia: Japan. China and India. And this will be the center of world history, and if you sit in Singapore or in Southeast Asia, you get a ringside view of the new world that is emerging. The action, the theater is coming to this region. Indeed, all of us in Southeast Asia will have a ringside view of a new chapter in history. So why should we move when history is coming towards us?

YI: On that note, Professor Mahbubani, thank you for being with us today.
And that brings us to an end of another edition of The Leaders. Thank you for being with us.