Industrious Singapore, once called the "rugged society," seems to be going a bit soft.

With the highest per capita income for Asia except for Japan, with affluent parents having fewer children but [WORD ILLEGIBLE] higher hopes and fears for [WORD ILLEGIBLE] fewer residents of this city-state [WORD ILLEGIBLE] inclined to take the kind of gambles that got them where they are.

"What I'm afraid of is the hard composition coming from places like South Korea and Taiwan," said Finance Minister Hon Sui Sen. "Many people are no longer taking the harder jobs and the high risk."

Still, with an economy that has became the centerpiece of rapidly developing Southeast Asia, such fears [WORD ILLEGIBLE] little more than small clouds on a for horizon. Prime Minister Lee Kuan Yew, one of the most cautious men in Asia, succumbed recently to what for him was almost euphoria by pronouncing the outlook for the next five years "most than favorable."

The island's economic growth rate has been about 8 percent lately Per capita income in nearly $3,000, a five-fold increase since 1960. Bitter memories of the 1965 breakaway from the Malaysian federation and fears of the predominantly Chinese population of 2.2 million being attacked by more powerful Malay neighbors seem to have faded away.

"We are the owners of this new Singapore," Lee said in his National Day message in mid-August, "something we never were 20 years ago. Then we were squatters, nearly all of us?

The key to most of the progress is Lee himself. An extraordinarily adopt politician, he came to power in 1959 on what appeared to be a socialist platform, then proceeded to turn Singapore into a monument to hard work and capitalism. Since 1968, his People's Action Party has captured every parliamentary seat in three general elections. Communists and leftist sympathizers are routinely jailed, then released after confessing their sins and promising to reform.

Lee, who will be 56 on Sept. 16, stays healthy by pursuing an addiction to golf. He seems to have lots of time to plan for the future but frets often in public about what will come after him and his generation.

"The task now is to ensure continuity," he said on the eve of National Day." Able men and women, however intelligent, well educated and gifted, have to be tested, trained and tempered in the hard school of experience."

"Too many of the brightest students have chosen safe careers in engineering and medicine, he said. "Too few took up other disciplines like economics management, the humanities, law and other professions" needed in running a government, said Lee, himself a lawyer. He indicated he plans to change this.

The effort to difine Singapore's future has led Lee into the ticklish area of language reform. Acknowledging Singapore's past as a British colony and its future economic dependence on trade with the English-speaking world, Lee has endorsed English as the national language and switched what was the leading Chinese-speaking university to instruction in English.

He also has launched an energetic campaign to have Chinese parents and television producers curtail use of the south Chinese dialects commonly spoken here, in favor of the northern dialect known as Mandarin, which now is the national language of both China and Taiwan.

Chinese Singaporeans must learn Chinese to preserve their cultural roots, Lee says. And the Chinese they use should be a universal dialect so all the different groups in Singapore can communicate with each other and with the 900 million people of China.

"If I had listened to my grandmother and continued in a Chinese school' I would have saved myself thousands of hours pouring over my Mandarin and my Hokkien," said Lee during a television appearance in which he recalled his struggles with Chinese at the start of his political career. "But I went along with my mother. I was sent to an English school."

When I went down and campaigned in 1961 in Hong Lim, . . . I had to speak Hokkien, [the principal southern Chinese dialect here] because the majority of them were adult Hokkiens. And the children laughed at me. They thought it was very funny, and it was, probably."

Malays, who make up 14 percent of the population, and Indians, who make up 7 percent, must also learn their own languages, Lee says. But all Singaporeans must learn English to unite the city and ensure its access to Western technology.

The island has achieved properity as an efficient manufacturing, trade and banking center located near the major sea route between Asia and Europe. Its money-making textile, shoe, plastics and shipbuilding industries continue, but leaders like Finance Minister Hon worry about new trade protectionism in the West and competition from Taiwan and South Korea.

How plans to take advantage of Singapore's highly trained work force and its fiercely competitive university system. "We want to concentrate on the knowledge part of industry, such as research and development, growth of quality crystals, microprocessing and computer design," he said.

Singapore has excelled by learning to ignore the limits of its small population, its 227 square miles of territory and its military vulnerability. Internationally, this has led Lee and his closest adviser, Foreign Minister Sinnathamby Rajaratnam, to assume a well-publicized role as the conservative conscience of the nonaligned movement.

Rajaratnam stood up at the July nonaligned ministerial meeting in Belgrade, for instance, to throw cold water on another lengthy discussion of how to get more aid from the West.

"We have become so used to putting the blame for our difficulties on others that we have lost the capacity to take a hard look at our own shortcomings," he said.

"All we can hope for is occasional acts of charity but no rich nation I know is prepared to undergo great distress and sacrifices to help the poor, no more than poor nations are willing to make sacrifics on behalf of nations poorer than themselves."

The idea is to impress both Singapore's youth and the rest of the world with the image of a small but feisty nation, looking for more frontiers to conquer. Government leaders here were pleased when profit-rich Singapore Airlines won worldwide headlines with its $1 billion purchase of 19 Boeing jetliners earlier this year. Now it has secured landing rights for next year in Los Angeles, and the jets scattered about Singapore's huge, untra-modern airport have been painted with the slogan, "California, Here We Come."