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Dynasty returns to Singapore helm
Singapore has become one of the world's most properous countries.
• Father's shadow cast on Lee's rule
• Same faces in cabinet reshuffle
• Big economic growth jump surprises
Civil Rights
Chok Tong Goh

(CNN) -- Singapore has sworn in the son of founding father and architect Lee Kuan Yew as the state's new prime minister in a colorful ceremony.

Lee Hsien Loong is Singapore's third prime minister since it became independent from Malaysia in 1965.

In his first speech as prime minister on Thursday, Lee said Singaporeans should feel free "to express diverse view" or "simply be different."

Former deputy prime minister Lee, who has degrees from Cambridge and Harvard and speaks fluent Russian, replaces Goh Chok Tong in a succession put in place 14 years ago.

While Lee's appointment brings power back to the family who first took over 45 years ago, the finance minister and head of the central bank has promised Singaporeans a more open society.

In a bid to appeal to the common people, Lee was sworn in before an audience of 1,400 that included taxi drivers and hawkers.

Just 45 years ago, businessman Lee Kuan Yew took over the helm of the swampy sea port and governed through the race riots of the 1960s.

He steered Singapore to become one of the world's most prosperous countries, a major transport and financial services hub with its port becoming one of the busiest around the globe.

But he also created a Singapore bound by stringent laws and regulations that dictated most, if not all, aspects of society -- including press and political freedoms, censorship and even the selling of chewing gum.

The elder Lee voluntarily stepped down in 1990 -- the first Southeast Asian strongman to do so -- and turned power over to Goh Chok Tong.

Goh ran a "kinder, gentler Singapore" and helped dilute the perceptions of a Lee family dynasty.

After 14 years in power -- steering Singapore through the 1997 financial crisis and the SARS outbreak and reaching out to his neighbors and to the West -- 63-year-old Goh turned the office over to Lee's son on Tuesday.

In a final speech to the nation of 4 million people, Goh declared his "chapter closed." (Changing of the guard)

'Good shape'

Lee Hsien Loong has been urged to show his softer side.

The elder Lee praised Goh, saying he had forged stronger ties abroad, boosted the economy and left the country "in good shape."

Goh "has added to what my generation built," creating "more opportunities for our people in so many fields," Lee said in a statement printed on the front page of The Straits Times, a paper that has close ties to the government.

But Singapore's success has come about under an authoritarian state where there is virtually no political freedom, prompting disenchanted Singaporeans to refer to it as the "nanny state." (The 'nanny state')

There is only one political party heading a government that levies harsh fines for almost any infraction and encourages the educated to have children.

The younger Lee retains the job of finance minister and is surrounded by a family in some of the most powerful posts in Southeast Asia's wealthiest country.

The 52-year-old Lee has named his father, 80, to the post of "minister mentor" -- the third most powerful post in the Cabinet.

The younger Lee's wife, Ho Ching, runs the government's powerful investment arm, Temasek Holdings, while his brother, Hsien Yang, heads Singapore Telecommunications, the country's largest company.

In a bid to appease Singaporeans, observers say Lee will need to meet the rising challenge from economic tigers China and India and try to craft solutions to the steep drop in the birth rate, which hit a record low last year.

He will also need to escape the shadow of his powerful father. (Shadow cast)

CNN Correspondent Aneesh Raman contributed to this report.

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