At 15 the Dalai Lama--whom followers consider the reincarnated Buddha of compassion--became leader of both the Tibetan government and the Tibetan Buddhist faith. After a Tibetan uprising against Chinese rule, he fled to exile in India in 1959 and became a symbol of religious faith, winning the Nobel Peace Prize in 1989. He spoke recently in Mumbai with NEWSWEEK's Melinda Liu and Sudip Mazumdar about religious and temporal leadership. Excerpts:

NEWSWEEK: Did your spiritual and temporal roles ever clash?

DALAI LAMA: No. If you're a religious leader you're less likely to act in a scandalous or corrupt manner.

You never felt torn between the interests of government versus religion?

Not during my time. During the time of the 10th Dalai Lama [Tsultrim Gyatso, 1816-37], there was a form of corporal punishment involving the amputation of limbs. He largely stopped the practice. However, I feel there is potential conflict, being head of a religious organization as well as head of government. These two institutions should be separate. In 1992 I made clear that when the time comes for our return [to Tibet], I'll hand over all my authority to the local Tibetan, hopefully elected, government. In our organization in exile, we've already had elected political leadership for a few years. Ever since, I've been in semi-retirement. When the time comes I'll fully retire--hopefully with a good reputation [laughs], and not in disgrace.

What are the biggest pitfalls facing secular and religious leaders?

If a leader is very concerned about his or her re-election, then sometimes they seem shortsighted. As for spiritual leaders, they should not be aloof from their followers.

Recently you sent another delegation to talk to Beijing officials, who still accuse you of separatist aims. Why are you optimistic about returning to Tibet?

This time the Chinese made their accusations and suspicions very clear. That's useful. In the next meeting we have the opportunity to respond. That's the way to develop genuine trust. My optimism is based not only on the [Chinese] leadership but on the global picture. Authoritarian systems are ending. China's leaders know they have to change. They also know dramatic change may lead to chaos. A smooth transition is in everybody's interest.

Did your religion influence your decision to seek autonomy instead of Tibetan independence?

I don't think so. Time is running out. We need some sort of action to protect Tibetan culture and environment. For the foreseeable future our only possibility is within the Chinese constitutional framework. Many Tibetans--including myself, and particularly the younger generation--want to modernize Tibet. It would be difficult for Tibetans to achieve this alone. Within the People's Republic of China, it would be much faster.

If you weren't the Dalai Lama but the CEO of Tibet Inc., would people buy stock in your company?

That would mean bankruptcy [laughs]. If I weren't the Dalai Lama, most probably I would be a teacher, scientist or engineer. I have no interest in making money.

If you could be any leader in the world, who would you be?

President of Russia, because it has such potential.

Secular leaders seek to achieve something before they retire or die; you don't ever have to retire or die. What's the most important function of the Dalai Lama as an institution?

That's not my concern. As early as 1969 I made it clear that it is entirely up to the Tibetan people whether the institution of the Dalai Lama continues or not. If the majority of the Tibetan people think it's not relevant, it will cease. The purpose of reincarnation is to carry on the tasks started but not yet accomplished by the previous life.

You've been a monk since infancy; now you're 69. What have you missed out on in life?

I missed this [pointing down, laughing]. As a human being, it is quite natural for sexual desire to arise. But overall, a monk's life is more stable, much simpler. In the family there is endless worry, too many ups and downs. Then when a couple grows old, there is the waiting: will you go first or will I go first? [Laughs] Maybe this is not correct, but this is the view of a simple Buddhist monk.