Myths of high population growth
Posted in the Singapore Forum
By Donald Low, Yeoh Lam Keong, Tan Kim Song, Manu Bhaskaran
The great John Maynard Keynes famously said that "practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist."
The debate on the Population White Paper has surfaced a number of myths and fallacies that seem to dominate the current discussion on Singapore's population policies. Economics provides us with a very useful set of analytical tools to clarify our thinking and to develop sensible, evidence-based policies. The purpose of this essay is to examine some of the ways these myths have inadvertently, or even subconsciously, been used to justify inaccurate thinking about policies.
Singapore protest:'Unfamiliar faces are crowding our land'
The island nation's government faces unprecedented dissent towards an immigation plan to increase its population by 30%
guardian.co.uk, Friday 15 February 2013
Liane Ng is 25 and single, works 60 hours a week, and until recently, shared a bedroom with her grandmother. Like many other Singaporeans, her life revolves around work, family and the stress of making ends meet in a nation that works the longest hours in the world. But lately her life has taken on a more immediate concern: a government initiative to increase Singapore's population by a third by 2030, a move that would see citizenship granted to more foreigners and squash the native population to just over half the total.
"I love my country," says the advertising executive. "[But] the cost of living is high, the income gap is widening, transport is failing and unfamiliar faces are crowding our land. People are getting increasingly fed up because our daily lives are affected."
Singapore has long been heralded as the success story of south-east Asia, a small island nation less than half the geographical land size of Greater London that in just 50 years has transformed from colonial backwater to one of the world's most formidable economic powerhouses.
But that gain has come at increasing cost. Skyrocketing housing prices, overcrowding, long working hours, low birth rates and an ageing population – that the government terms Singapore's "silver tsunami" – are all major contributors to discontent often been focused on the country's rapid immigration.
The city-state currently has a population of 5.3 million, and is now more densely populated than Hong Kong. Under a government white paper – which was approved last week despite widespread public anger – Singapore will aim to increase its population to 6.9 million people over the next 20 years by granting permanent residency to 30,000 people and allowing an inflow of some 25,000 new citizens every year. New social programmes, including marriage and parenthood initiatives, as well as infrastructure schemes, will accommodate the burgeoning population, with immigration calibrated to retain its current ethnic ratios.
"We are producing too few babies, our society is ageing, and if we do nothing, our population will soon start shrinking," said Singapore's prime minister Lee Hsien Loong.
"Singapore must continue to develop and upgrade to remain a key node in the network of global cities, a vibrant place where jobs and opportunities are created."
It is the government's focus on Singapore's economy, rather than its people, that has stirred much of the public's discontent. Singapore is the third most expensive city in Asia.
The ruling People's Action Party (Pap), in power since independence in 1965, is seemingly on a one-track mission to maintain its own rule, despite having heavily lost a recent byelection and potentially standing to lose more, says Singapore expert Michael Barr of Australia's Flinders University.
"Pap has always presented itself as a party above vested interests …[but] that is not washing anymore," says Barr.
"Just like a multinational company's CEO has bonuses tied to the rise and fall of share prices, ministers and civil servants have bonuses tied to economic growth in Singapore. And we're talking about million-dollar bonuses here and more, so there's a lot at stake."
Dissent over the white paper has been huge. Social media, newspapers, blogs and even parliament itself have been rife with commentary, and a rare public protest – with over 3,500 already planning to attend – has been scheduled for Saturday. "There is this fear that foreigners will eventually replace and take over our country," explains protest organiser Gilbert Goh, who hopes for a referendum. "There is no known employment protection for local workers here – people can be easily replaced at the workplace …[and] workers have been known to be replaced by foreigners, as many employers are now foreigners as well."
Racial tensions already run high, not least between the ethnic Chinese, Malay and Indian Singaporeans who already make up the city-state, but also among new immigrants, says Barr.
Some of that tension is due to the country's focus on economics rather than culture. Local opposition politician Nicole Seah, who ran as the youngest female candidate in the 2011 general elections, recently said that the "Singapore Inc" brand cultivated by the government has created a "transient state where people from all over come, make their fortunes and leave".
She added: "The policies over the past decades have created an erosion of our social roots, widespread resentment, and a loss of who we are as Singaporeans. We have been taught to prioritise money-making practicality over what it means to have a solid culture."
The bubbling discontent in Singapore has recently been compounded by a string of scandals causing some outsiders to wonder if the Asian utopia so carefully crafted by the nation's so-called founder, Lee Kuan Yew, is finally crumbling. Most young professionals still live at home because they can't afford to move out, the government has had to subsidise speed-dating schemes to encourage partnerships, and abortion rates among married women now account for over half the total – as many families struggle to stay afloat.
"The government does not give allowance for people who are different from them and this is one of the reasons why we are so politically and creatively stunted," says Ng. "My perspective is, I'm different, I don't want to toe the line, and that's why we have to speak up and push through until something happens."
Singapore’s Population Bubble
By William Pesek Feb 15, 2013
Singaporeans are raring to do something extraordinary: protest.
That might not seem like a big deal with the Arab Spring uprisings; Chinese journalists taking to the streets; and thousands of typically docile Japanese rallying against government policies. But tropical Singapore is the land of quiet brooding, where mass street demonstrations are as common as snowstorms.
What has people so riled up? Well, people. The impetus for the Feb. 16 march is a report that the tiny island’s population may rise by as much as 30 percent to 6.9 million by 2030. This seems to be the government’s answer to the question of how to sustain prosperity in one of the most crowded and expensive cities in the world.
The signs of overcrowding and urban stress are palpable to any visitor. Prices are surging, public services in a nation famed for nanny-state tendencies are slipping and some of the finest infrastructure anywhere is buckling under the strain. Locals blame the influx of immigrants, which Prime Minister Lee Hsien Loong’s ruling party touts as one key to Singapore’s success in the years to come.
The city-state, with about half the area of New York City, has 3.3 million citizens and 2 million foreign residents, many of whom have contributed greatly to Singapore’s growth in finance and construction. Yet complaints that overseas workers deprive locals of jobs and drive up housing prices fill the air. Singapore is the third-most-expensive Asian city and ranks as the sixth most costly in the world, according to an Economist Intelligence Unit ranking of 131 cities.
Singapore may well serve as a case study for what happens when leaders try to offset slowing economic growth with immigration and increased birth rates. There are lessons that Japan or Italy would do well to study. All of it is turning into a political liability for Lee, the son of Lee Kuan Yew, who is regarded as the father of modern Singapore.
The erosion in his party’s popularity is accelerating after the release Jan. 29 of a white paper that contained the 6.9 million figure, which it calls a projection, not a goal. Lee Hsien Loong has since said the number of people will be “significantly” lower than the report suggests. Will Singaporeans buy that?
“The new population policy is anti-Singaporean and it threatens our existence and livelihoods,” says Gilbert Goh, 51, an advocate for unemployed citizens and an organizer of a protest planned for this week.
Sadly, some of the rants one reads in the media and online veer toward xenophobia. If Singaporeans are so livid, they should stop supporting Lee’s party. After all, isn’t the government, by seeking to import more human capital, telling its own people that they lack the skills to compete? Anyone who doubts Singapore is serious only has to look at accelerating efforts to reclaim land from the sea for development, giving the city the room for population growth.
The real question, as public angst rises, is whether the opposition is justified. Former United Nations demographer Joseph Chamie says it is. To Chamie, the view that it’s almost always better to have more and more people is the human equivalent of what Bernard Madoff did with money, something he calls “Ponzi demography.”
The human-pyramid scheme works like this: Population growth, either through births or immigration, boosts demand for goods and services, increases borrowing, boosts tax revenue and adds to corporate profits. Everything seems grand and leaders take a bow. It’s a bubble, though, and it eventually bursts when population growth stalls. Incomes top out, high debt crushes consumption and investment, the need for public assistance rises, environmental degradation increases and angry people take to the streets.
As households are left to pick up the tab once Ponzi demography runs its course, government leaders issue dire warnings about economic decline if the flow of fresh talent stops. This will sound familiar to Singaporeans as Lee’s People’s Action Party sketches out a dystopian future without adding wealthy bankers and low-income workers to the nation’s ranks.
Singapore needs to find another way. The era of easy growth is over. Just as economies such as Japan and South Korea are seeing the limits of their export-led models, Singapore’s formula has run its course. Raising the productivity of its current workforce would be more potent for a developed, open economy looking to compete in a region dominated by the cheap labor and manufacturing of China and India. Singapore should focus as much energy on incentives for its existing residents to innovate and start new businesses as on adding more bodies.
Not only is Singapore toying with liberalized immigration, it’s also revving up a campaign to persuade Singaporeans to wed younger and reproduce. It is an odd push for Lee. Four decades ago, concern about overpopulation prompted his father to urge a delay in nuptials and to have smaller families. Today, amid a birthrate of about 1.3 children per woman, efforts to encourage bigger families border on the offensive. Just check a new website,“Hey Baby.”
Singapore’s addiction to population growth sends a simple and disconcerting message: The country has run out of ideas to increase economic vitality, aside from encouraging people to procreate or immigrate. Ponzi demography, indeed.
Singapore feels the squeeze of population drive
Seag Chiang Lee
The Star/Asia News Network
Petaling Jaya, Malaysia February 12, 2013 1:00 am
Tiny Singapore is about to set a population target of 6.9 million people, making it the world's third most densely populated country by 2030.
The move to cram 30-per-cent more people onto the island in just 17 years is now being debated in Parliament, and has predictably stirred public anger.
According to its Population White Paper, the government intends to increase the number of permanent residents (PRs) annually by 30,000, and new citizenships by 15,000 to 25,000 a year.
By 2030, nearly half (45 per cent) the population will be made up of foreigners.
With only 710sqkm of land, this island is already showing strains on housing, transport and healthcare posed by a population that recently hit 5.3 million.
Yet, for analysts of Lee Kuan Yew's ruling People's Action Party (PAP), another push to 6.9 million is not surprising. The new policy merely represents the second, possibly last, major phase of a long-term PAP population expansion plan started in 1990.
Some regard this as the dogged pursuit of Lee's long-term vision to build Singapore as a major global city. Others see the population drive as a booster for economic growth.
In the first phase, the population grew from 3.05 million in 1990 to more than five million in 2010, or about one million immigrants per decade. That just happened - no consultation, no Green or White Paper.
Now comes the second - and more controversial - phase which will raise the population to 6.5-6.9 million by 2030, about half of that number to be made up by foreigners.
The infrastructure expansion in the 1990s was ill-prepared, resulting in Prime Minister Lee Hsien Loong apologising to the nation for the poor housing and public transportation.
Now, even as the government is still working to put right that mess, comes the new expansion proposal.
Since I began working as a foreign correspondent in 1960, I have had experience with two national leaders in Southeast Asia proclaiming a similar ambition for larger populations.
This was in the early '70s. The first was Thailand's dictator, General Prapas Charusathian, who wanted his country's then 35 million to be increased to 100 million.
I was then based in Bangkok.
The pot-bellied general, who spoke no English, would hold a weekly press conference in Thai for his own journalists.
Fortunately for us, the US Embassy issued regular transcripts in English to help the foreign press.
The general said in a folksy way that Thailand's population was too small to command respect from neighbouring countries.
He was probably referring to China and Vietnam, seen as a potential threat by Bangkok in those days.
I remember him saying: "If we had 100 million or 120 million Thais, people would respect us more."
That number was three times Thailand's population at the time. Today it is 70 million.
Next was former Malaysian Prime Minister Mahathir Mohamad who said his nation, then with a population of less than 14 million, needed at least 70 million people to become a middle economic power.
Both these were bigger countries than Singapore.
While these three nation's shared the same ambition for larger populations so as to achieve influence or better economic scale, there was a difference. Only Singapore acted on its plan.
It could prove to be a foolhardy move whose unpopularity brings down the ruling PAP). Or it may become a unique achievement.
While debate in Parliament raged, news came that Singapore had risen in the rankings to become the world's sixth most expensive city in which to live. So there's another high price to pay.
It now has the third-highest cost of living in Asia.
According to the White Paper, three groups of foreigners will be in demand: Those who support the city's social needs, such as healthcare and eldercare workers; low-skilled workers for construction, retail and food services; and global talent with cutting-edge skills and abilities.
At one stage of the debate Prime Minister Lee admitted that his government had previously failed to prepare for the foreign influx.
But his ministers assured Singaporeans that this time they would get it right, with a series of measures to handle the enlarged population, including:
_ Increasing land mass by 8 per cent, raising it from 710sqkm to 766sqkm, with several golf courses to be sacrificed.
_ Building 700,000 new homes.
_ Doubling the Mass Rapid Transit tracks.
_ Bringing healthcare planning forward by 10 years.
So far, the plan has been strongly opposed by the public and every opposition party.
A proposal by the main opposition Workers Party that the population target be cut from 6.9 million to 5.9 million was turned down.
The public was reportedly "furious".
A public rally is being planned at Speakers Corner for this Saturday.
The Minister for Environment and Water Resources, Vivian Balakrishnan, said on a Facebook post titled "Political suicide vs demographic extinction" that the government was aware of the political risk "but it is worth taking. We are facing the crisis of our lifetime ... Our citizen population will halve every two generations."
Nayanima Basu | New Delhi February 17, 2013 Last Updated at 12:17 IST
Govt decries CECA violation by Singapore
The country has imposed restrictions on inflow of foreign workers, which is going to affect Indians working there
Those of you planning to make it big in Singapore might be in for a setback. Singapore recently made certain changes to its Employment Pass Framework law to reduce inflow of foreign workers significantly to create more job opportunities for local professionals. The move is expected to impact even those Indians working there at present across various sectors.
The amendments, made on a proposal by its Ministry of Manpower, has armed the Singapore government to bring down the foreign share of the total workforce to around one-third while encouraging employers to invest in productivity in return for incentives in the form of tax breaks.
The move came as a recent Singapore's policy paper predicted that its population would grow by 30 per cent to 6.9 million by 2030, with immigrants making up nearly half that figure. The paper led to demonstrations in Singapore yesterday, a rare happening in the country, in protest against rise in immigrants.
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