Dr Balakrishnan said Minister Mentor Lee Kuan Yew asked him two key questions after Singapore won the bid last week.
The first was where will the games be held because Singapore will not have a National Stadium by 2010.
So YOG events will be held in the heartland sports facilities.
And Dr Balakrishnan said these will be upgraded so Singaporeans will also benefit from the world-class facilities.
But he said Mr Lee's second point involves changing software, not hardware.
Dr Balakrishnan said: "The second question, or actually the challenge he threw, was that this is a great opportunity. Let's uplift our people, bring ourselves up and truly create a gracious society and let's use the games as an opportunity to test ourselves, to showcase ourselves and to benchmark ourselves."
He added that it is time for Singapore to develop a polite and considerate culture for the country's sake not just because of the YOG.
And that way visitors to the Games will know the warm welcome they receive is genuine and not just for show. - CNA/ch
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