How land and people fit in Singapore's economy

Yahoo!Singapore, Feb 21, 2013 (source)

By Linda Lim
 

The writer, a Singaporean, is professor of strategy at the Stephen M. Ross School of Business at the University of Michigan.

The ongoing debate about Singapore’s population policy provides a timely opportunity to reconsider how different pieces of our economic growth model fit—or do not fit—together.

GDP (output) growth in any country comes from either or both increases in inputs (primarily land, labour and capital) or the productivity of those inputs. As noted first in Lee Tsao Yuan’s 1982 Harvard PhD economics dissertation, and continuing to the present day, Singapore’s GDP growth has depended more on input than on productivity increases, as reflected in the high dependence on foreign labour.

This has had the unintended (but predictable) consequence of discouraging increased labour productivity.

Employers could increase output more readily and cheaply by recruiting foreign workers, particularly from lower-income countries, than by investing in capital-labour substitution and upgrading the skills of the domestic labour force. This was and is an entirely rational decision for profit-maximising private enterprises.

But increasing output by increasing inputs eventually runs into the problem of diminishing marginal returns.

In Singapore’s case, this is because the addition of more and more people to an essentially fixed and extremely scarce complementary resource, land, inevitably raises other costs. These include rising residential housing and commercial rental costs, and congestion costs especially in transportation.

Also, both higher housing costs and lengthening commute times effectively lower the real wage of workers (e.g. because it now takes them 10 or 11 hours to earn an 8-hour daily wage).

In a closed labour market, the rising cost of living eventually translates into higher nominal wages. But in an open labour market like Singapore’s, wage increases held down by the increased supply of foreign labour discourages the substitution of capital, higher technology and sophisticated management processes, for labour.

This is why the policy of tightening foreign labour supply and increasing labour productivity is necessary.

Some solutions

One way by which the chronic excess demand for labour that Singapore has long suffered (despite or because of a liberal immigration policy) will be reduced is by some businesses moving out of the country. This is a normal process of adjustment to shifting comparative and competitive advantage.

What is important here to smooth such adjustments and minimise the costs to both employers and workers is commitment to a clear long-term labour market policy that will not vary according to short-term business or electoral cycles.

But the application of such a policy should not be blunt—applied with immediate and equal force across all sectors—but nuanced and gradual, according to the circumstances of individual sectors and businesses.

Economic planning agencies need to be involved in calibrating the demand side of the labour market. For example, they shouldn't provide incentives to businesses whose highly specific manpower needs require a heavy reliance on imported labour and talent, with few jobs for native Singaporeans, or which are highly land-intensive.

Choices and trade-offs must be made—not between growth and foreign labour dependence, but between different sectors that will contribute to growth.

Policy consequences

Given Singapore’s extreme land scarcity, continuation of heavy (if reduced) reliance on foreign labour and immigration has another unintended consequence. It contributes marginally to the low fertility rate and emigration of native Singaporeans, and to labour force participation rates that are lower than they might be for certain demographics.

These are, for example, mothers of young children, and professionals and skilled workers over 50 years of age who in other developed countries would be at the pinnacle of their careers, but in Singapore are too often sidelined in favour of cheaper (or more globally accomplished) imported talent.

High housing costs reduce fertility by delaying the age of marriage (since young couples need to both work for a long time to save enough to afford their own home, especially in the unsubsidised private market where they must compete with large numbers of foreign buyers).

Also, long commutes on congested public transportation reduce time for social interaction and family formation, and make it difficult to transport children for childcare and schooling.

The costs of child-raising are high, including for some the need for (mostly foreign) maids and nannies to enable both parents to work. This again increases population density, including in the ever-shrinking space of home. Competition with foreigners in school and the job market also increases the stress and expense of child-raising.

Emigration to more land-abundant countries also becomes more attractive to young Singaporeans who do not see themselves ever being able to replicate or even approach their parents’ standard of living if they stay home, faced with the ever-increasing costs of living, declining quality of life, increased job market competition and a perception of discrimination vis-à-vis foreign talent and immigrants.

The feeling of being treated as a “second-class citizen in my own home”, and being crowded out by foreigners, adds to the loss of physical markers of “home”—buildings, land, green and wild areas which in every country constitute part of the native’s national patrimony and identity—in discouraging the sojourner’s return to be a “stranger in a strange land”.

The over-representation of foreigners or immigrants in the leadership and even middle ranks of many organisations also suggests that a “glass ceiling” exists for the locally-born, such that upward career mobility may be more limited than in a larger foreign country.

From a purely GDP growth input perspective, it may not matter if emigrating or low-reproducing native Singaporeans are readily replaced in the labour market by immigrants and new citizens. But particularly at the high end of the skill ladder, among the globally-mobile talent that the country wishes to attract, many of the same “push factors” operate to discourage a permanent stay in Singapore—from the cost of living to quality of life—reinforced by lack of the bond of a shared collective national identity.

For those who do stay, sheer numbers (and what some say is the difficulty of making friends with Singaporeans) encourage “clustering among their own” rather than integrating into native Singapore society, and their birth rates will also fall over time for the same reasons this has happened with native Singaporeans.

Distortions

Territorial land is the essence and foundation of a nation. In Singapore, the wisdom of using retirement savings to fund home ownership, including in subsidised public sector housing, has been premised on the assumption of constant asset appreciation. Large-scale immigration contributes to asset appreciation, and thus to the profits of REITS and both private and government-linked property developers.

But asset appreciations based on increased land scarcity are essentially rents that transfer income from buyers to sellers, thus contributing also to rising inequality.

From a long-term growth perspective, they distort incentives to work, save and invest in value-creating activities in favor of rentier wealth or income from property “investments” (or speculation).

Asset inflation also hurts growth by raising the cost of doing business and discouraging entrepreneurship especially by SMEs and local businesses which cannot afford to compete with global multinationals for commercial and retail space.

We should not forget that a major factor in the downfall of the medieval Italian city-state of Venice was the diversion of entrepreneurial capital and energy into property as the small land-area drove rising rentals and land prices, leaving the city with beautiful buildings that today are but a shell for visiting spectators to admire.

Beyond these economic considerations, an increase to the already absolutely and proportionately large numbers of temporary foreign workers and new immigrants has resulted in social pressures and political tensions that threaten to make Singapore less livable and less attractive to foreigners turned off by the perceived hostility of natives, as well as natives who feel their livelihood, lifestyle, electoral impact and nationhood undermined by the overwhelming presence of foreigners.

Land and people together constitute a nation. All of us, new and old Singaporeans alike, and temporary residents, will be better off if our population policy takes a more comprehensive view of both economic growth and social integration in this small but precious piece of land. Fortunately, there are alternative solutions that, together as a nation, we can make work.


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Related

 

by Miel (source)

 

Singapore population likely to hit 6.1 million by 2030: demography expert

Yahoo!News Feb 19, 2013 (source)

Singapore’s population in 2030 will not be as large and its older people as unproductive as what the government expects, an Austrian demography professor said Tuesday, Feb 19, 2013.

In a public lecture organised by the Institute of Policy Studies to some 140 attendees at RELC International Hotel, Professor Wolfgang Lutz, founding director of the Wittgenstein Centre for Demography and Global Human Capital, estimated that Singapore’s population that year would be 6.1 million, bearing into account increases in the city-state’s population every 5 years since 1970.

In a recent white paper, the government projected that there would be between 6.5 million to 6.9 million people in Singapore by 2030, sparking a backlash among Singaporeans, many of whom have complained that the large influx of immigrants in recent years have strained infrastructure and pushed up the cost of living.

Government leaders have also maintained that a steady, albeit lower, pace of immigration would be needed to sustain economic growth to compensate for Singapore’s low total fertility rate and ageing population.

In his hour-long presentation, Lutz declared that the negative effects of an ageing population have been blown out of proportion and argued that Singapore’s vast tertiary-educated population core will counter the consequences of low replacement levels.

“There is indeed no empirical evidence so far that the ageing of the workforce is bad for economic growth. We see life expectancy increasing and elderly people being in good health,” Lutz explained to Yahoo! Singapore. “There is no reason why they could not and should not make a contribution to society. If you factor this in, the old age dependency burden becomes less.”

Argument against a retirement age

With longer life expectancies, Lutz said, "I think there is no reason to have a government-set universal retirement age".

Currently, the statutory minimum retirement age in Singapore is still 62, but employers are required to offer re-employment to eligible employees who turn 62, up to the age of 65.

Lutz reasoned how the lack of a pension scheme and the government’s encouragement towards self-sufficiency made such a retirement age redundant.

“People have different preferences, financial situations and health status. If somebody thinks he or she can afford to retire at the age of 50 and vice versa, why not? The government pension schemes need to be structured flexibly based on an insurance principle, however,” said Lutz.

Lutz said Singapore, like Germany, could be among the countries with the oldest population in the world but still be able to thrive with a knowledge-based economy.

He said that a high proportion of 50- to 60-year olds would yield good results for Singapore’s economy as they would have come mostly from high levels of education and, thus, be able to contribute in terms of experience and foresight.

Meanwhile, attendees voiced concerns of over-education in which too many citizens have to fight for too few jobs.

In response, Lutz said that lifelong learning and broad education were ways citizens could combat such problems. He urged governments to put in place more measures in schools to welcome back citizens for continued education at more periods in their lives.

“There is never a point when we feel that we have learnt enough. A broader tertiary education gives the basis for people to learn more skills. As our lives get longer, why do we have to push all education in the first part of life?” said Lutz.

Redefining what is an old age

One of Lutz’s suggestions to recalibrate expectations of an ageing population is to redefine what exactly an age that is considered to be old, is. Doing so would change the measure of the number of working people needed to support the old, Lutz said.

In the white paper, the government expected a drop in the number of working citizens supporting the aged, from a current ratio of 5.9 working-age citizens for each citizen aged 65 and above, to a ratio of 2.1 by 2030.

“70 is the new 60. Educated, old members still can be a productive part of society. Looking at Singapore’s population in an international context, Singapore has one of the strongest transformative societies in recent human history,” said Lutz, referring to the drastic jump in higher-educated residents.

Lutz caused much conversation when he said last Wednesday that Singapore’s optimal TFR should be 1.7, lower than the replacement level of 2.1. He is in Singapore for three weeks as a distinguished professor of the National University of Singapore Society. Lutz is founder and director of the Wittigenstein Centre for Demography and Global Human Capital.

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Al Jazeera: Singapore seethes over population plan

Al Jazeera, Feb 17, 2013 (source)



Disenchanted Hayatt Shah recently moved his family to Japan

Singapore - Thirty-year-old Hayatt Shah made the most difficult decision of his life last month.

The Singapore native gathered his belongings and left behind his family and friends to begin a new life in Japan with his wife and six-month-old daughter.

High housing prices drove him to move from Singapore, explained Shah, who added he has no regrets leaving a country he no longer recognises. "I refuse to pay such a high price to live in a box that I have a lease on for 99 years. It's crazy that property prices here in Saitama [in Japan] are more affordable than properties in Singapore."

Like many of his fellow citizens, the musician and English instructor found it increasingly difficult to sustain a comfortable lifestyle in Singapore, where he was born and bred. "It is the simple fact that I don't feel like I am home anymore in Singapore," he said, which spurred him to move.

Singapore's success story is relatively well-known. Having transformed itself from a tiny island nation with no natural resources to one of the richest countries in the world, Singapore prides itself on its booming economy, sustained by encouraging foreign investment and migrant labourers.

But despite being the third-most densely populated country in the world, Singapore's government recently announced plans to increase its total population from 5.3 million to 6.9 million by 2030. The move caused a public outcry, with thousands taking to the streets on Saturday in protest.

An aging population coupled with dwindling birth rates, escalating housing prices, overcrowding, and caving infrastructure are just some of the factors responsible for the rising dissent among Singaporeans.


Population plans

In January, Singapore's government - which has been led by the People's Action Party since 1959 - introduced two proposals. The first was its "White Paper on Population", which outlined a strategy to ensure sustainable population levels in the face of low birth rates and an aging society. Shortly thereafter, a plan to increase Singapore's land area by nearly 8 per cent was announced to accommodate the new population.

In addition to the number of foreigners, an estimated 30,000 new permanent residents - a status given to foreigners who live in Singapore for long periods of time - will also be added each year.

"The White Paper is about mitigating the problems of our aging population and low birth rates, so as to secure Singapore’s future," said Singapore's Prime Minister Lee Hsien Loong in a post on his Facebook page. "Our priority is to maintain a strong Singaporean core by encouraging Singaporeans to get married and have children. We will reduce inflow of foreign workers, moderate flow of new citizens and maintain [permanent resident] population at about present size."

Lee added a disclaimer that the government was not aiming for 6.9 million population, explaining the figure "is just a basis for us to plan our infrastructure".

What shocked many was the report's prediction that the country's population will start to decline by 2025, with more than 900,000 Singaporeans - more than a quarter of the number of citizens - retiring from the workforce. The report noted the country's fertility rate has fallen for the past 30 years, and currently stands below the replacement level of two babies per mother.

In 2010, the World Bank estimated Singapore's fertility rate to be just 1.2 births per woman - among the lowest rates in the world.

 Rising public anger

"We are talking about an average increase of 100,000 people every year, so if you want to talk in terms of how crucial the impact will have on the next general election, I cannot exaggerate how important it is." - Chee Soon Juan, opposition leader

The potential influx of more than 1.6 million additional people has caused rare demonstrations in this island nation. Although the government stressed it would maintain a strong Singaporean core in spite of an incoming surge of foreigners, the majority of Singaporeans remain sceptical about its promise to deliver.

"It seems like anyone can just come into Singapore," said Shah. "So will having 6.9 million people make Singapore a happier place? Is the economy really that important?"
Cassandra Siew, a housewife, said she doesn't trust that the government will properly handle the population increase.

"The government has been singing the same song for years," she said. "They keep adding more and more numbers year after year and assure us that it will be for the best, but when will it end? I'm sorry to say that I simply don't buy into their promise of looking out for us anymore."

Another Singaporean, marketing executive Ron Chew, said: "Our country is rapidly evolving, but Singaporeans are not reaping any of its benefits. Why should a foreigner be entitled to the same, if not more, privileges than a Singaporean?"

Eugene Tan, an assistant law professor at Singapore Management University, described a "spatial and mental sense of being overwhelmed felt by large swathes of the public".

"Singapore is barely coping with the rapid influx of immigrants over the past decade, so there is the prevalent view that if we can't cope with 5.3 million, how are we going to manage with 6.9 million within two decades?" said Tan. "There is a sense that the immigration policy will not be of benefit to the average Singaporean."

But the public could be "reacting to a figure which they don’t really comprehend", said Chua Beng Huat, a sociology professor at the National University of Singapore. "Whether 6.9 million will be the steady state population is completely speculative, and one should not be fixated by it."

Many say a potential loss of Singapore's national identity is an even more pressing problem than overpopulation.
Dissent against the population plans has been widespread, and a rare public protest on Saturday claimed to have drawn close to 5,000 people - an impressive feat in a country where many protests and public gatherings are illegal, and a police permit needs to be obtained to hold one.

"I want to express this displeasure faced by many Singaporeans on a united and peaceful platform," said organiser Gilbert Goh, an unemployment counsellor who runs a support website for the jobless in Singapore.

"My greatest fear that arises from all this is the loss of our Singaporean identity, because it's been eroded so much already and with the heavy influx, it may be destroyed," said Goh. "And to add insult to injury, we are constantly being reminded that we could be the minority population figure in 17 years' time."

Political impact

Singaporeans have become increasingly vocal about the high influx of foreigners in recent years, demanding changes in the government's relaxed immigration policies.

The opposition Singapore Democratic Party (SDP) recently launched its own population policy report, calling instead for a plan for businesses to favour Singaporeans when hiring and to tighten the screening of foreign professionals to wean businesses off of cheap foreign labour.

SDP party chief Chee Soon Juan said instead of moving towards a population of 6.9 million, the current population should be reduced "because of all the current problems Singapore is seeing".

"I think political change is inevitable and controversial issues like the White Paper on Population might hasten the flight of support to the opposition." - Eugene Tan, Singapore Management University

Some think dissatisfaction with the White Paper could hurt the People's Action Party (PAP) in the country's elections in 2016.

"We are talking about an average increase of 100,000 people every year, so if you want to talk in terms of how crucial the impact will have on the next general election, I cannot exaggerate how important it is," said the SDP's Chee.

"Time is not on the side of the PAP," said professor Tan. "I think political change is inevitable and controversial issues like the White Paper on Population might hasten the flight of support to the opposition."The ruling party appears to have lost support in recent years. This was made clear in a by-election in January that the PAP was expected to win. Instead, unhappy Singaporeans delivered the party a devastating blow by voting in favour of the opposition candidate.

Political blogger Andrew Loh agreed. "I feel that the PAP government will see its share of the popular vote decrease further ... I do not see these things improving enough by the next general election for people to reinstate the level of trust in the government which they had in the past."

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Related

The Population White Paper Attacks Us in our Deepest Identity

Dr Vincent Wijeysingha's speech at the Hong Lim Park protest against the PAP Population White Paper on Feb 16, 2013 (source)

Two days ago, the Singapore Democratic Party launched its population policy paper. We made six recommendations that we hope are comprehensive and coherent, defended by international research. Our objective is not to target a particular population figure but to create the conditions, both economic and social, which will achieve a reduction in our population over a manageable period. I offer it for your consideration; please read it on our website.

But this afternoon, in this historic park, I have come to join you, my fellow Singaporeans, to share this platform with these distinguished speakers, simply because the White Paper on population attacks us in our deepest identity.

Not because of that number: 6.9 million; or because no sound research and international thinking supported it. Not because all the speeches made in Parliament on the PAP side did not seem to even begin to guess our concerns. But because the White Paper has revealed two things: That the government does not appreciate what it means to be an ordinary Singaporean struggling to get by in 2013. And two, that it appears to care very little.

That have been many reasons offered for why the government seems so intent on packing our island with so many people. Some people say it is for GDP. Some say it is to bolster its flagging electoral support. Others say the PAP is no longer capable of re-imaging the economy. And still others say that true leadership has left the party.

There may be some truth in each of them. But the most primary reason why population policy has affected us so deeply is contained in our national pledge. Our children make a commitment every day to it, to happiness, progress and prosperity.

In our first one hundred and fifty years, our ancestors came to these shores in search of a better existence for their children and their grandchildren. They fled from poverty, from famine, from war and destruction in their own countries. Why? Because the instinct of any human being - in fact of any being - is to maximise their wellbeing.

Our wellbeing is contained in three ‘Bs’: be safe, belong, be fed and clothed. In an immigrant society, the memory of poverty, of war and famine, has seeped so deeply into the bones and the blood and the sinews of our people that we built for ourselves, through formidable hard work, a home worth living in. A home we wouldn’t have to flee from; a country a peace with itself, even if we disagree with our government or with our neighbours. And we arrived, in the last 20 years, as a society able to provide for itself, able to articulate our deepest wishes for our people.

But even as we stepped into that new world, even as we settled into a better life, far away from the privations and punishments that brought our ancestors here, we are faced with a government which tells us that what we had worked for, what we had fought for, was not enough, that we had become lazy, complacent, and forgetful of the hard times. It seems almost bizarre that they should not know that it was precisely to leave the hard times behind that we worked so hard to build the home we built.

At this stage allow me to say something about the guest workers who live in our country. Many of us have reacted angrily to the population policy and have directed our anger at our foreign brothers and sisters. This is wrong. Foreigners are our fellow human beings and they deserve our respect and our friendship. To oppose the government’s population policy, which is our right and our duty, we must direct our dissatisfaction at the government.

But to the foreign residents in our midst, we must extend our traditional Asian hospitality. I lived abroad once upon a time. I know what xenophobia feels like. Let us not reduce our rightful anger to xenophobia. Let us be neighbours to our foreign friends. And, at the same time, let us oppose, wholeheartedly, the government’s population policy that is so badly considered and so poorly managed.

The fear of being displaced in our own homes is a fear as old as humanity itself. From the first time we took shelter in caves from wild animals and the elements, we learnt that the most valuable treasure is the treasure called home. But each day as we step out into our daily lives, we feel we are stepping into an alienation and apathy that makes our children wonder whether there is anything valuable left on our island anymore. We feel betrayed that those whom we trusted to govern us, those to whom we surrendered our rights in return for their good government, now appear to have closed their ears against our apprehension, against our fears, against our worries. And they have said that if we are not willing, they will put spurs in our sides and if we are still not willing, they will replace us with those who are.

This is why we came here this afternoon. Not because we hate foreigners. We do not. How can we? But because we worry for the soul of our homeland and because we grieve for what we have already lost in 10 years of a dissolute population policy that imagines that you can squander the loyalty of your people, that you can cast away the hard-won pride that we built for ourselves and our families and our neighbours, and that you can give away free-of-charge the wealth that our parents and grandparents built. That is not what we want.

It is the task of our generation to ensure that our home continues to be safe and secure and happy for all our people; that our national pledge continues to be meaningful. We want the government to know that that is what we want; and who will put the vast resources at their disposal at the service of us the people.

Because we are not machines and our neighbourhoods are not factories and our island is not a hotel. It is our home, where we care for our grandparents, where we raise our children, where we share the experience of being human with our friends and neighbours. You came here today to say this loudly and clearly and urgently to our government. I humbly join my voice to yours so that we can make it heard in Parliament and at the Istana Annexe. So that in 20 years from now, our hopes and dreams are not just memories in our dusty photo albums.

We cannot fail; we must not. We owe it to our children who depend on us. We owe it to our ancestors who built this land: like Cheang Hong Lim, whose park has become synonymous with our rights. If we throw away our right to speak cogently and bravely to our government, we will not be worth the respect we hope for from our grandchildren.

Go to your Meet the People Sessions, write in your Facebook, email the ministers, hold more and more forums, events at Hong Lim Green, form organisations to campaign and do research, donate your spare cash to the causes that fight for a better Singapore. But also, support the organisations that work with migrant workers: Transient Workers Count Too, Humanitarian Organisation for Migration Economics, Healthserve. They do good work to help our migrant brothers and sisters who struggle under our system. Do not set yourselves apart from our foreign guests. Change your mindset: it is not they who steal our jobs and lower our wages. It is a policy framework that has forgotten that we Singaporeans are, and must be, the first and last object of governance.

My friends, we must populate civil society, that space that is ours, between the individual and the state, and there, loudly, tell the government that we want them to change. Use every means at your disposal. Do not walk away from this park and wring your hands. It is the task of this generation.

Tell the PM that he governs in our interests, not in spite of them; that he governs by our permission. And when he sends our young men off to National Service, that they know what they are training to defend. Ultimately, they defend not our GDP growth, important though that is, but the happiness, prosperity and progress that their parents and grandparents helped to build.


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The Dutch are better informed than Singapore's mainstream (PAP) media audience

AFP (Agence France-Presse), Feb 18, 2013 (source)

“PAP leaders seem to have lost their feel of the ground. Their technocratic decision-making style is no longer accepted, yet they persist in ‘we know best’ policies,” said Reuben Wong, associate professor of political science at the National University of Singapore.

Saturday’s protesters were rallying against government projections that the population could rise by a third to almost seven million in less than 20 years, with much of the increase resulting from immigration.

For years, the affluent but worker-starved city-state, built by mainly Chinese immigrants, had rolled out the welcome mat for foreigners, whose numbers rose drastically during the economic boom from 2004-2007.

Businesses hired construction workers from Bangladesh, hotel staff from the Philippines, waitresses from China, shipyard welders from Myanmar, technology professionals from India and bankers from the west.

Foreigners currently make up 38 percent of the population and the low Singapore birth rate means immigrants and guest workers will need to fill the manpower gap, raising that figure to 45 percent.

However, anger over the projections is causing Singaporeans to engage in something new — speaking out against the PAP in public and not just in social media

“I’m thinking about my children, who are going to have a big problem studying in a competitive society next time,” tax consultant Kevin Foo, 42, told AFP at the rally.

“Foreigners are going to create a lot of problems here, especially the rich ones who buy up all our property. Where are Singaporeans going to live?”


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Popular Protest against PAP's Pernicious Population Plan

Singaporeans Protest Plan to Increase Population by Immigration

Bloomberg, Feb 16, 2013 (source)

Singapore National Anthem at the protest's close

Singapore National Anthem at the protest's close

Photos show a crowd of 2700 (source)



(source)

Thousands of Singaporeans demonstrated today against a government plan to increase the island’s population through immigration, saying the policy will erode the national identity and threaten their livelihoods.

Protesters gathered at Speakers’ Corner at Hong Lim Park at the edge of the city’s financial district on a rainy afternoon, many dressed in black and carrying signs opposing the plan. Lawmakers from Prime Minister Lee Hsien Loong’s ruling party last week endorsed a white paper that outlined proposals including allowing more foreigners through 2030 to boost the workforce.

Today’s rally increases pressure on the government to slow an influx of immigrants that has been blamed for infrastructure strains, record-high housing and transport costs and competition for jobs. Singapore’s population has jumped by more than 1.1 million since mid-2004 to 5.3 million, stoking social tensions and public discontent that is weakening support for Lee’s People’s Action Party.

“The size of the crowd shows people are angry,” said Tan Jee Say, a candidate in Singapore’s 2011 presidential election, who joined the protest. “It will send a signal to the government and I hope it will react in a sensible way and see that people are concerned. The government should not push the white paper down Singaporeans’ throats.”

‘Not Herded’

Organizers estimated that more than 3,000 people joined the demonstration at the 0.94-hectare (2.3-acre) park that served as a venue for political rallies in the 1950s and 1960s. They sang patriotic songs. Some signs demanded a referendum on the white paper, while others said “we want to be heard, not herded,”and “waiting for 2016,” when the next general election is due.

Members of the opposition say the government’s policy to spur economic growth through immigration isn’t sustainable.

There may be as many as 6 million people in Singapore by 2020, and the government will boost infrastructure to accommodate a population of 6.9 million by 2030, according to the white paper that was published last month.

The government will take in between 15,000 and 25,000 new citizens and grant about 30,000 permanent-resident permits annually, according to the paper titled “A Sustainable Population for a Dynamic Singapore.”

Left Behind

Protesters expressed unhappiness with the policy that could see citizens, including new ones, making up only one of every two people on the island smaller in size than New York City by the end of the next decade should the population reach 6.9 million. Singapore is the third-most expensive Asian city to live in and the sixth globally, according to an Economist Intelligence Unit ranking of 131 cities around the world published this month.

“Instead of increasing the population of this country so quickly, maybe we should focus on those that have been left behind,” said Sudhir Vadaketh, author of “Floating on a Malayan Breeze,” a socio-economic narrative on Singapore and Malaysia. “A lot of Singaporeans are feeling a great sense of loss of identity. With continued high immigration, I worry about that sense of identity will be diluted even more.”

Demonstrations in Singapore are rare as the government imposes strict controls on assemblies and speeches, limiting outdoor protests to locations such as Speakers’ Corner. Authorities say such laws help maintain social stability in a country that was wracked by communal violence between ethnic Malays and Chinese in the 1960s.

Shrinking Workforce

Speakers’ Corner was modeled after the section of London’s Hyde Park traditionally set aside for free speech.

The white paper was aimed at setting a framework to address Singapore’s demographic challenges of an aging population and a shrinking workforce. The island-nation’s first cohort of baby boomers turned 65 last year, and its number of elderly will triple to 900,000 by 2030, according to the National Population and Talent Division.

In a city with 3.3 million citizens and 2 million foreigners, complaints about overseas workers depriving locals of jobs and driving up home prices helped opposition parties win record support in the 2011 general election. Lee is under pressure to placate voters without disrupting the entry of talent and labor that helped forge Southeast Asia’s only advanced economy.

Ranked the easiest place to do business for seven straight years by the World Bank, Singapore is competing with lower-cost neighbors such as Malaysia and Indonesia for foreign investment as an uneven global recovery hurts demand for exports.

Since the 2011 polls, Lee’s party has lost two by-elections. The government “paid a political price” with the infrastructure strains as a result of a bigger population, the prime minister said last month.



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Mass rally in Singapore seeks immigration curbs

 

By Annabelle Liang and Bhavan Jaipragas (AFP), Feb 16, 2013 (source)

 

SINGAPORE — More than 1,000 Singaporeans attended the city-state's biggest protest rally in recent memory Saturday (Feb 16, 2013), amid growing public indignation over predictions of a surging foreign population.

The peaceful rally, held at an officially designated protest zone, was staged by a civic group after the government said foreigners could account for nearly half of the densely packed island's population in less than 20 years.

Organisers estimated the crowd at 3,000, but AFP reporters on the scene said between 1,000 and 1,500 people had taken part despite afternoon downpours, making it the biggest protest in Singapore in recent years.

Rally leaders, who used Facebook and other online platforms to draw support, openly attacked the People's Action Party (PAP), which has been in power for more than 50 years, over its immigration and other policies.

"The large crowd here shows the PAP government that they are not afraid any more, they don't want to hide behind a moniker on Facebook to show their displeasure," said chief organiser Gilbert Goh, a former opposition candidate for parliament.

"They are showing their deep displeasure with the white paper," he told AFP, referring to a controversial population projection issued last month.

A spokesman for the Singapore Police told AFP that it was not monitoring the size of the crowd, which was largely clad in black, armed with clappers and clutched a sea of umbrellas.

There were no signs of riot police in or around the rally venue, a grassy park where protesters are allowed to address the public in a spot known as Speakers' Corner.

A government policy paper last month said the population could range between 6.5 and 6.9 million by 2030, with foreigners making up 45 percent because Singaporeans are not producing enough babies to sustain economic growth.

Citizens currently make up 62 percent of the current population of 5.3 million, of whom more than a third are foreign-born.

A banner at the rally read: "Save Singapore - Say NO to 6.9 million."

"Stop selling memberships. We are not a country club," read a handmade poster, referring to naturalisation.

Protests are rare in Singapore, a wealthy island republic known for strict security and social controls, but Facebook, Twitter and other social media have set the tone for political debate in recent years.

Rallies of more than a few dozen people are unusual.

In October 2008, about 600 angry investors gathered in the same spot, urging the Singapore central bank to help them recover money they lost from investments linked to collapsed US bank Lehman Brothers and other institutions.

Saturday's rally came less than two years after the general election of May 2011, when the ruling party suffered its worst ever performance, with immigration already a sensitive issue.

Foreigners have been blamed for stealing Singaporeans' jobs as well as straining housing, transport and medical services.

Goh, the rally organiser, ran unsuccessfully for parliament in 2011 under the opposition National Solidarity Party.

On the eve of the rally, Goh issued a public apology to foreigners living in Singapore for an earlier posting in which he listed racial profiles and social habits of various Asian nationalities as well as westerners.

"It's rude and insensitive to their feelings," Goh wrote, adding that he did not want to "stir up unpleasant xenophobic sentiments within the country".


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4,000 turn up at Speakers' Corner for population White Paper protest

Yahoo!News, Feb 16, 2013 (source)


Speakers' Corner at Hong Lim Park on Saturday afternoon to protest against the Population White Paper endorsed by Parliament last week.

[SEE SLIDESHOW]

Organised by transitioning.org, a support site for unemployed, the nearly four-hour protest saw people of all age ranges and races turn up in the light drizzle, with umbrellas and some with home-made, colourful placards and posters. Many also came with their young children in tow.

A total of 12 speakers, including former NTUC chief Tan Kin Lian, former presidential candidate Tan Jee Say, SDP's Vincent Wijeysingha, NSP's Jeanette Chong-Aruldoss spoke at the event, mainly hitting out at the 6.9 million population figure mentioned in the White Paper.

Each speaker was given 10 minutes to address the crowd.

Jee Say, a former high-flying civil servant, asked if there was a need to convert the migrant population in Singapore to be new citizens.

He also questioned said if half the population are foreigners in 2030, “in the event of a crisis, the other non-Singaporean half will pull in a different direction”, he says to the swelling crowd.

Ravi Philemon from opposition party NSP asked the crowd if bringing in an average of 900,000 to 1 million foreigners every decade was an acceptable number, to which the crowd responded with a thunderous “no”.

 

He then tabled the notion that the paper dilutes the Singapore core for an allegedly relentless economic pursuit.

“The economy is not everything. The economy has to be for the people and not the people for the economy,” he added.

“The White Paper revealed two things, one, that the government does not seem to understand what it means to be an ordinary Singaporean and, two, that it does not seem to care,” said another speaker, Wijeysingha.

 

“Singaporeans are and must be the first and last object of policy”, he said.

The peaceful protest was marked by poignant moments when the crowd sang "Count On Me, Singapore" at the midway mark, and also at the end when the National Pledge was lustily recited in unison.

Organiser Gilbert Goh told Yahoo! Singapore he was pleased with the turnout. Calling the protest "history-making", he said he initially only expected 200 to show.

"This protest event is meant for Singaporeans to come here in a peaceful manner to show their displeasure at the 6.9 million population target," he said.

"We also wanted to show Singaporeans that there's a place for you to come to legitimately protest against any policy that you have against the government. You don't have to sit behind Facebook and complain. You can show up in unity, in person to complain," he added.

Goh also apologised after a two-year-old blog post by him that was overtly xenophobic and anti-foreigner in nature was re-posted on Twitter a day before the event.

“Unfortunately, what we write always comes back to haunt us. We need to move on. This event is not about xenophobia, it’s more about the 6.9 million figure. But people are offended, so I apologise," he said.

"I’m human, I make mistakes. I wrote it two years ago. Since then I have learnt to be a bit more accepting. They’re here to stay. They’re going to be the majority of the population in 2030, and Singaporeans the minority. We probably have to accept this fact, probably even embrace them.”

Singaporeans who were present also said they'd showed up to make their voices heard.

“The bottom line is saying 'no' to the 6.9 million, saying 'no' to the White Paper," said Kenneth Koh, a director in his 50s.

"No, because the people’s representative no longer has the people’s support. This is not a protest. The people want a referendum. The people want their rights back. They don’t want to give the government a free passport,” he said.

Others said they were curious and came down for the event after finding out about it on Facebook.

"A lot of people are not happy and it’s not every day that they show their unhappiness. I just came to have a look at soak up the atmosphere," said student Jenny Wang, 21.

Last week, Parliament endorsed an amended motion to the White Paper on Population by 77 votes to 13.

The amended motion filed by Holland-Bukit Timah MP Liang Eng Hwa stated that the White Paper “supports maintaining a strong Singaporean core by encouraging more Singaporeans to get married and have children, supplemented by a calibrated pace of immigration to prevent the citizen population from shrinking”.

PM Lee, in an address before the motion was endorsed, stressed that the 6.9 million population figure had been taken out of context and that the paper was not about any specific population size for beyond 2020, but rather that it was being used for the purpose of land use and infrastructure planning.

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Related:

Five thousand gather to protest population White Paper, commentary by Yawning Bread (Alex Au): here


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SDP unveils six-point plan to control population

Singapore Democrats

February 14, 2013 (source)

The SDP launched our alternative policy entitled Building A People: Sound Policies For A Secure Future this evening to deal with the problems of immigration and population in Singapore.

As the title suggests, the focus of the paper is on the people and how we can take care of their future and their needs.
Our policy is aimed at lowering the number of foreign workers currently in Singapore as well as tightening the entry of foreigners into the country in the near future thus creating an environment where Singaporeans can thrive and enjoy a high quality of life.

To do this, we have drawn up a comprehensive six-point plan:

1. Enact the Singaporeans First Policy

We will introduce the TalentTrack Scheme to process applications of foreign PMETs wishing to work in Singapore. Their suitability will be a merit-based system with points awarded for a number of factors (age, qualifications, skills, experience, number of dependents, etc.) to determine if the applicants meet the economic and population needs of Singapore.

The employment visas of foreign workers currently in Singapore will be allowed to lapse whereupon they will have to apply to the TalentTrack Scheme if they wish to continue working here. Otherwise, they will have to leave.

Singaporean employers will be able to hire these professionals if they demonstrate that they have made every effort to employ a Singaporean first but cannot find a local with the requisite qualifications/skills.

The Employment Visa Commission (EVC) will also be established to survey, and review at regular intervals, the skills and human resource needs of the various industries and sectors of our economy. The EVC will provide the necessary input to the TalentTrack Scheme to determine the weight given for the various types of professions.

The EVC will comprise representatives from the Ministry of Trade and Industry, Ministry of Manpower, independent trade unions, Singapore National Employers' Federation, and other professional organisations.

Businesses will also be required to restructure and upgrade their operations over a period so that they will not be dependent on lower-skilled foreign workers. By mechanising and automating their businesses, they will be able to employ more Singaporeans who are increasingly becoming more highly trained.

The net effect of the Singaporeans First Policy is that we will be able to considerably reduce the current number of foreign workers in Singapore while, at the same time, only allow into Singapore real foreign talent that our economy needs.

2. Retain Singaporean talent

Singaporeans are emigrating at an alarming rate. To stem the brain-drain, we need to lower the cost of living which is creating a highly stressful lifestyle for the people. Two of the biggest components of a family's household budget is housing and healthcare.

Lowering HDB prices is dealt with extensively in our housing policy (see Housing A Nation). Cheaper housing also means lower office and shop rental which translates into lower prices of goods and services. The SDP has also proposed concrete measures to reduce healthcare costs in our National Healthcare Plan.

Another major reason that Singaporeans cite for leaving Singapore is the education system which emphasizes rote-learning. School curricula are geared towards exam-taking which leaves little room for the development of lifelong learning and creative thinking. The details of the SDP's educational policy will be laid out in a separate paper.

3. Raise the Total Fertility Rate

Many younger Singaporean couples put off having children because of two main reasons: the high expenses incurred with raising children and the difficulty of obtaining an HDB flat.

Reducing the cost of living is outlined in the preceding section. This will have a significant impact on Singaporean couples' decision on whether to have more children. The SDP has also proposed facilitating the ease of younger couples of obtaining HDB flats through our Young Families Priority Scheme. This can be read in our housing paper.

4. Introduce the GPI

The PAP uses GDP as a reason to increase population size. It cites GDP growth as an important factor for Singaporeans' well-being. In truth, the GDP is not a good indicator of the economic well-being of our country and it certainly is not a measure of the wealth of the people.

For example, couples going through divorces pay for legal services. These fees go into increasing the GDP. However, it does tremendous damage to our families and children. These have economic costs which are not captured in the GDP.

A better and more accurate index is the Genuine Progress Indicator (GPI) which not only takes into account the GDP but also the costs incurred in building up the GDP (costs such as crime, pollution, family breakdown, psychological health, etc).

The GPI is a better indicator of the overall happiness and quality of life of our people. The GDP may increase because of the influx of foreigners but the GPI will accurately capture the effects of an overcrowded city on Singaporeans. The Government should base its population policy on the GPI, and not the GDP alone.

5. Strengthen the Singaporean Identity

A massive inflow of foreigners over a short span of time will not enable the new immigrants to assimilate into the Singaporean culture. This tears at the social fabric of our nation. To strengthen our national bond, the Ethnic Integration Policy which determines the percentage of ethnic HDB dwellers in each estate should be abolished. The identification of "race" in our Identity Cards should also be removed.

Such practices serve only to divide Singaporeans and reinforce how different and separate we are. In the process, they weaken our identity as Singaporeans.

6. Revamp the ministerial pay formula

Ministerial salaries are based on GDP growth. This runs the risk of government leaders pushing up the population size which will increased the GDP but adversely impact on the well-being of the people.

If ministers' salaries are to be pegged to an index, it should be the GPI. In this way, the happier Singaporeans are and the higher their quality of life, the better ministers are paid.


 

Building A People: Sound Policies for A Secured Future (pdf) is available for download here.

PAP Government's mediocre intellect revealed in its Population White Paper

Dubious Footnotes in the Population White Paper

The Online Citizen

By Gordon Lee

Last week, the Deputy Prime Minister Teo Chee Hean (who heads the National Population and Talent Division) apologised for the error in footnote 12 in the population white paper which misrepresented nursing as being low-skilled.

Yet, the misrepresentation is not limited to just footnote 12. Here is a selection of other misleading footnotes in the contentious White Paper.

Footnote 2 states that “A comparison of advanced countries shows that incomes grow faster when economic growth is good. Poor growth may also affect employment prospects, especially for lower-educated workers.”

Yet, this in no way supports the erroneous point that the white paper was trying to make – that without economic growth, unemployment would rise. What the white paper should have instead claimed is: Without economic growth, and with a growth in the labour force, unemployment would rise. This simple omission is an important one. If there is no growth in the labour force, unemployment levels would be less susceptible to a lack of economic growth.

Footnote 3 claims that “Economic growth has allowed the Government to introduce various transfer schemes to help lower-income Singaporeans, such as the Goods and Services Tax (GST) Voucher scheme.”

GST was introduced at 3% in 1994, and raised over time to 7% in 2007.

What the footnote should have said was “Taxing consumption via GST has allowed the Government to introduce the GST Voucher Scheme, i.e. take with one hand, and give back with another.”

Footnote 5, that “The World Bank has ranked Singapore top for ease of doing business”, was used to support that point that “Our well-educated and skilled workforce, good connectivity, reliable public services, stable government, and rule of law make us an attractive place to do business and give us a competitive edge globally.”

Yet, reading the World Bank report revealed that Singapore was ranked highly for legal and procedural effectiveness, and NOT for some of the reasons claimed by the white paper (i.e. educated and skilled workforce, stable government, etc.) Nor does the cited PWC report support the points made. The White Paper should not have misrepresented the World Bank and PWC.

Footnote 7 is plainly ridiculous. It states that the labour productivity forecast for 2010-2020 of 2-3% is simply the target of the Economic Strategies Committee. The ESC report says “We can achieve productivity growth of 2 to 3 percent per year over the next 10 years, more than double the 1 percent rate achieved over the last decade. This is a challenging target.”

It is good and ambitious to have a “challenging target”, but surely Government report and policies should be based on a more reasonable target.

Footnote 7 goes on to claim that their forecast for 2020-2030 “is assessed to be 1% to 2% per year, similar to the experience of OECD countries over the last decade (i.e. 2000-2010).” How NPTD assessed the accuracy of this statement is not elaborated upon.

Conclusion

It is deeply regrettable that the NPTD would go public with such a poorly-substantiated documented. Doing so only encourages speculation that the White Paper is little more than an attempt to create an illusion of robust support, by quoting evidence out of context.

Sadly, the lack of public support is still evident. Donald Low, a senior fellow at the LKY School of Public Policy and a former top civil servant, has criticised the white paper (see Experts Weigh in on Population Projections, below) saying that there “wasn’t even a References section to show what research the writers of the paper had done, what social science theories they relied on, what competing heories/frameworks they looked at… There was also a surprising lack of rigorous comparison with other countries that have gone through, or are going through, a similar demographic transition.”

The poverty of intelligent thinking in Government policies makes us all the poorer.
 
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Expert Weigh in on Population Projections

Today, 4 Feb 2013 (source)

SINGAPORE — As Parliament sits today to debate the White Paper on population, some experts have questioned the soundness and accuracy of the projected population figures, given the difficulty in forecasting population growth.

Citing the Government’s track record of underestimating population growth, they noted that external factors, such as the global economy and the demand for labour, would likely throw such forecasts off the mark.

Nevertheless, others felt that policymakers would have gleaned lessons from past instances and factored in a buffer in their latest projections.

In particular, demographer Gavin Jones from the Asia Research Institute at the National University of Singapore (NUS) pointed out that the population projections for 2030 factored in more than two million non-residents. This would give policymakers some “flexibility”, he noted.

The White Paper projects that by 2020, there could be between 5.8 million and 6 million people in Singapore. By 2030, the range is projected to increase to between 6.5 million and 6.9 million.

But Economic Society of Singapore Vice-President Yeoh Lam Keong reiterated that population growth “always tends to exceed projected forecast”.

“Because, firstly, there is very strong demand for labour from existing labour-intensive industries, and industry has a strong influence on immigration policy,” he said.

“Secondly, given economic uncertainty, during the times when we have growth, the Government tends to err on the side of caution and go for more growth. Given these two tendencies, we tend to systematically overshoot population growth, not intentionally, but because of circumstance and current institutional practice.”

While SIM University economics professor Randolph Tan noted that such forecasts are “always notoriously inaccurate”, he felt that publishing the White Paper was a “responsible” move by the Government, as it allows Singaporeans to air their concerns and hear “both sides of the debate”.

But he said that policymakers could have come up with a less definitive forecast. Instead, Singaporeans could be informed about the probability of reaching a population of 6.9 million by 2030, he suggested.

“The question therefore … is, what is the precision of the projections? What is the potential error range? How far can we afford to be wrong?”

The Government’s past population projections have been below the mark. For example, the Urban Redevelopment Authority’s Concept Plan in 1991 projected a population of four million to be reached after 2010.

By 2000, however, the Republic’s total population had already crossed that mark.

In 2001, the population was estimated to hit 5.5 million in the long term. When it reached 4.6 million in 2007, the projection for planning purposes was adjusted to 6.5 million. The Government had acknowledged that it was caught off guard by the surge in the number of immigrants.

NUS sociologist Tan Ern Ser felt that the Government, in learning from its past experience, “would have built in some buffers and not cut (the projection) too close”.

Agreeing with Dr Tan, NUS Department of Real Estate professor Tay Kah Poh added: “In other words, the plan assumes some degree of over-shooting, which is a huge change in thinking from before.”

National Development Minister Khaw Boon Wan noted last week that the projection was “aggressive” so that the Government “will not be caught under-providing, as we are experiencing currently” — a stance that Prime Minister Lee Hsien Loong said on Facebook that he fully agreed with.

Still, Mr Yeoh proposed capping the total population to 6 million in 2030 and 6.5 million by 2050.

He said: “A population of 6.5 million will be very cosmopolitan, (there will be) a lot of foreigners but it will still have significant indigenous components. And it will be relatively wealthy so it might resemble … Switzerland, with significant social cohesion and national identity.”

He added that, should Singapore ever reach a population of 8 million to 9 million, “it would look more like Dubai”. There could be “extreme income inequality, extreme dependence on foreigners and would be extremely crowded and unpleasant”, said Mr Yeoh.

Meanwhile, Lee Kuan Yew School of Public Policy Senior Fellow Donald Low criticised the lack of scholarship and academic rigour in the White Paper.

Writing on Facebook, Mr Low, a former high-flying civil servant, noted that there “wasn’t even a References section to show what research the writers of the paper had done, what social science theories they relied on, what competing theories/frameworks they looked at”.

Citing Australia’s recent White Paper on Australia in the Asian Century or reports by the British government, which he said are “always complete with references to the social science literature”, Mr Low added: “There was also a surprising lack of rigorous comparison with other countries that have gone through, or are going through, a similar demographic transition.”


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