Singapore's leadership succession is in disarray. Here's who could be the next prime minister

SINGAPORE — Singapore's carefully planned leadership succession has been thrown into disarray.

Political observers say it's now not clear who would become the Asian financial hub's next prime minister.  

Deputy Prime Minister Heng Swee Keat shocked the nation late Thursday, when he announced that he will step aside as the designated successor to Prime Minister Lee Hsien Loong.

He said he turns 60 this year, and cited his age as an obstacle in steering the country in a post-pandemic world.

Heng will relinquish his role as finance minister at the next cabinet reshuffle, which local media said is expected in two weeks' time. Still, he will remain as deputy prime minister and coordinating minister for economic policies.

"It does throw a spanner in the works in terms of Singapore's very carefully laid out succession plans, but I don't see that as a body blow to Singapore's political renewal," Eugene Tan, a law professor at Singapore Management University and a political observer, told CNBC's "Street Signs Asia" on Friday.

Financial markets were stable on Friday following Heng's announcement, with the benchmark Straits Times Index inching 0.1% lower and the Singapore dollar flat against the U.S. dollar.

Analysts have identified four potential candidates who could be chosen by the leadership to become Singapore's next prime minister:

• Chan Chun Sing, 51, who's trade and industry minister;
• Ong Ye Kung, 51, who's transport minister;
• Lawrence Wong, 48, who's education minister and co-chair of the country's taskforce on Covid-19;
• Desmond Lee, 44, national development minister.

Gillian Koh, deputy director for research at the National University of Singapore's Institute of Policy Studies, said the men have had some exposure on the international stage. That could help ease them into the top job, she said Friday on CNBC's "Squawk Box Asia."

However, she pointed out that Wong and Lee, who are both in their 40s, would have "a much longer runway" even if they were to take over five years from now.

The ruling People's Action Party has governed Singapore since the country's independence in 1965. Leadership transition — Singapore has only had two so far — is usually an uneventful affair, with a successor identified many years before the sitting prime minister steps down.

But even before Heng's decision to step aside, the country's leadership succession plan was upended by the Covid-19 pandemic, said Tan, the law professor.

Lee, the current prime minister, had previously said he was ready to retire by the time he turns 70 but later indicated he would delay his handover to see Singapore through the Covid-19 crisis.

Lee is 69 this year and said on Thursday that he would stay on as prime minister until a new successor emerges and is ready to take over.

"The pandemic has really upended the leadership succession plans, and so ... I see DPM (deputy prime minister) Heng as being an unfortunate casualty," said Tan, who added that Heng looked "very much at peace" with his decision to step aside.