Singapore considers legalizing homosexuality: Lee

By Geert De Clercq and Sara Webb

SINGAPORE (Reuters) - Singapore, striving to cast off its staid image and overhaul its economy, might have to legalize homosexuality to become more cosmopolitan, but will preserve its core values, the city-state's founder Lee Kuan Yew said.

The conservative Southeast Asian state aims to be Asia's most vibrant centre, with glitzy casinos and a lively arts scene to attract more tourists and increase its population of 4.5 million.

"They tell me that homosexuals are creative writers, dancers. If we want creative people, then we have to put up with their idiosyncrasies," Lee, 83, told Reuters on Tuesday.

Lee was independent Singapore's first prime minister, from 1965 to 1990, and remains the most influential minister in the cabinet of his eldest son, Lee Hsien Loong.

"Let's not pretend it doesn't exist," Lee said in an exclusive interview, adding he saw no option but to legalize homosexual sex. Under Singapore law, a man who is found to have committed an act of "gross indecency" with another man can be jailed for up to two years, though prosecutions are rare.

In November, the Ministry of Home Affairs said it was considering decriminalizing oral and anal sex between consenting heterosexual adults, but not between homosexuals.

Singapore wants to attract 2 million well-educated and wealthy immigrants to boost its population to 6.5 million and transform its economy from a low-cost manufacturing base into a centre for science, technology and financial services.

With foreigners pouring into the property market and banks beefing up their wealth management operations, salaries and overall costs have surged.

In a public forum at the inauguration of Reuters' new headquarters in Singapore, David Conner, CEO of Singapore's Oversea-Chinese Banking Corp. (OCBC.SI), asked Lee when the government would start to worry whether the increases could erode Singapore's competitiveness.

"We are not Hong Kong. We cannot afford to let rent prices become astronomical," Lee said referring to Singapore's main rival.

Lee said the pressures were a sign of confidence in Singapore's prospects, with investors from as far as Monaco buying property in the city-state.

He forecast economic growth this year would probably be at the upper end of the government's 4.5-6.5 percent range.

RICH INDONESIANS

Singapore is confident the terms under which it has chosen partners for its two casinos will avoid the sleaze and crime often associated with the gambling centre of Macau, he said.

Singapore scrapped a ban on casinos in 2005, and has started to build two gambling resorts for a total investment of US$7 billion as part of a drive to boost tourist arrivals to 17 million people by 2015 from nearly 10 million last year.