However, the Army must be part of the solution to the problems facing the country, he said. If the Army is dissolved, all of Burma's administrative instruments will go with it, and the country will have nothing with which to govern itself.
Lee, Singapore's founding prime minister and currently minister mentor, spoke with a columnist from the University of California's Los Angeles Media Centre and a new-media expert from the University of Southern California.
The contents were published in The Straits Times.
"These are rather dumb generals when it comes to the economy," he was quoted as saying. "How they can so mismanage the economy and reach this stage when the country has so many natural resources?"
Lee said that Singapore hoteliers who sunk millions of dollars into Burma on his advice have now found their hotels empty.
He has tried to advise the generals to take Burma out of isolation, referring specifically to former junta member Khin Nyunt, who is currently under house arrest.
"He's the most intelligent of the lot," Lee said of Khin Nyunt, who as prime minister and head of military intelligence was once part of a troika in the military junta, but apparently fell out with the current regime chief Senior General Than Shwe and was stripped of his posts in 2004.
Lee said he could not understand how the generals could believe that they could let Burma remain isolated, adding that even medicines were being smuggled from Thailand.
Referring to recent excesses by the junta, Lee said that the rulers must have pushed "a hungry and impoverished" people to revolt. Among the excesses were moving to a new administrative capital, Naypyidaw, complete with expensive buildings.
"We will see how it is, but whatever it is, I do not believe that they can survive indefinitely," Lee said.//dpa