SINGAPORE, May 7 (Reuters) The party which has ruled Singapore for four decades won another overwhelming mandate in Saturday elections, but failed to achieve the clean sweep of all parliamentary seats it had hoped for.
The People's Action Party (PAP) won 66.6 per cent of the votes cast, down from 75.3 per cent in the 2001 poll. But it held on to 82 seats in the 84-seat parliament, giving it an almost unchallenged free hand to continue its pro-business policies.
''I am very happy that the PAP has been returned to government,'' Lee Hsien Loong, 54, fighting his first election as Prime Minister, told a news conference.
''Now that we have a new leadership team in place, it will see Singapore through the next 15-20 years.'' The city-state of 4.4 million people, which borders Malaysia, is an important regional manufacturing, trading, and financial services centre which relies heavily on foreign investment and its image as a secure business environment.
The PAP had hoped for a crushing victory by winning every single seat in parliament.
Lee, the eldest son of former Prime Minister Lee Kuan Yew who led Singapore to independence from Malaysia in 1965, was appointed in August 2004 without an election.
''It's very much a status quo result. The PAP was denied the clean sweep that it sought, but held on to its own seats and there were no further gains by the opposition,'' said Cherian George, political analyst at Nanyang Technological University.
OPPOSITION Although the opposition failed to build on its two parliamentary seats, Low Thia Khiang of the Workers' Party and Chiam See Tong of the Singapore Democratic Alliance saw their winning margins improve.
''It shows that the people of Singapore want more opposition in parliament,'' Chiam said on state television.
The opposition parties had fielded candidates for more than half the seats in parliament for the first time in 18 years.
In Lee's own constituency, a group of Workers' Party candidates which Lee had dubbed ''the suicide team'' managed to win one in three votes.
''It's not about policies, it's about having an opposition, rather than a single-party country,'' Song Seng Wun, economist at CIMB-GK Research, told Reuters.
He added that the PAP had received a comfortable enough endorsement to carry on with its economic restructuring.
With its electronics manufacturing sector under threat from low-cost China, Singapore is trying to strengthen its services sector. It has built up a biotech industry and plans to build two casinos at a total cost of US billion to boost tourism.
Lee, who is also the finance minister, can attribute his success to the strong economy, an array of financial incentives for voters, and efforts to silence opposition criticism.
In the run-up to the election, the government gave cash handouts to low-income and elderly Singaporeans and army conscripts, and promised hundreds of millions of dollars to renovate public housing in wards which supported the PAP.
On Friday, Lee told an election rally that the S8 billion economy had expanded by more than 10 percent in the first quarter from a year ago and said full-year growth could beat the government's earlier forecast of 4-6 percent.
The jobless rate, at 2.6 pe rcent, is the lowest since the second quarter of 2001.
Like the previous three elections, this one was overshadowed by defamation lawsuits and personal attacks -- a timeworn PAP tactic that has bankrupted some opposition leaders, thus disqualifying them for parliament.
Just a week before the polls, Lee Hsien Loong and his father launched a defamation suit against the Singapore Democratic Party and its leaders.
During the campaigning period, the PAP repeatedly condemned an opposition candidate from the Workers' Party as a ''liar'', urging the party to drop him after he wrongly claimed that the elections office had lost one of his election forms.
REUTERS VJ RN0135