Handing over to DPM Wong before the election would mean he would be the one leading the party in the campaign, and would win his own mandate, said PM Lee.
The zone aims to improve the flow of goods and people between both sides of the Causeway, and enhance the ecosystem of the Iskandar development region and Singapore.
He also said that Asian countries have agency, and if they can make the right choices, they can create the conditions for peace, security and continued prosperity.
Should more than one candidate be successful in their nomination, Singapore will head to the polls on Sept 1 to elect its ninth president, after months of activity and discussion.
He added that by giving the matter some time, he had hoped to give them a softer exit, and save them and their families the pain and embarrassment they are suffering now.
Through it all, meritocracy must remain the organising principle of society, he added.
Prime Minister Lee said he had learnt about the relationship some time after the 2020 General Election, but did not know when it began.
Mr Tharman, 66, is the first candidate to throw his hat in the ring as no other presidential hopeful has made his intentions public.
He said the next stage of nation-building will need a new definition of success and new approaches towards skills and social support, among others.
This exchange occurred right before Parliament passed the Government’s $123.7 billion spending plans for the coming financial year.