February 8th, 2013

White Paper Is About the Economy, Not Babies

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By Corinna Lim

For every 1 person that comes into Singapore to replace our shrinking citizenship, 2.5 persons are allowed in as transient workers for pure economic reasons. That is high and this is what the current debate should focus on instead of lumping the economic and demographic issues as one issue.

Proponents and critics of the White Paper have at least got one thing in common[1] – the misconception that focusing on improving the Total Fertility Rate will:

  • reduce the need for migrants
  • enable Singapore to maintain a ‘strong Singaporean core’.

It is important to disabuse this notion once and for all because it leads our Parliamentarians and policy makers down the wrong track.

Also, Singaporeans should not be made to feel that they should accept high levels of migration because it is their fault that they have chosen not to have more babies and are responsible for the shrinking and ageing population.

Demographic vs Economic Imperatives workforce no

First, we should be clear about the two main justifications for migration:

a)      long term demographic challenges – insufficient babies and ageing population

b)      short term economic growth – to address labour shortage issues

TFR is all about long term demographic challenges and we should not conflate this with short term economic growth.

The reason why we let in so many people on our island in the last 10 years is not because Singaporeans were not having babies but to address labour shortage to achieve our economic goals.

 

It’s Too Late – Increasing TFR Now Is Futile

The 2011 IPS Paper on the Scenarios of Future Population Growth and Change in Singapore, IPS 2011 showed that increasing TFR, even from 1.2 to 1.85 (which is highly unrealistic at this point), is not going to make much difference to the Singapore Resident Population.

The graph below, derived from the IPS paper, shows:

Scenario 1: TFR Constant at 1.24, no net migration

Scenario 2: TFR rising from 1.24 to 1.85 in 2025 and remaining constant thereafter, no net migration

 

Singapore Resident Population (Million)
pop graph

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Scenario 1

3.55

3.62

3.66

3.68

3.66

3.62

3.52

3.37

3.21

3.03

Scenario 2

3.55

3.62

3.67

3.7

3.72

3.73

3.69

3.60

3.49

3.37

In 2030, the difference in the Singapore citizen population between a scenario where TFR is 1.24 and 1.85 is 110,000 persons or 3%.

So, improving the Total Fertility Rate is not going to stop our Singapore core from shrinking or ageing. Having said that, this does not mean that the State should not do its best to ensure that all families get as much support as they can to ensure a high quality of life.

The Issue – How Many Migrants Should we take in for Economic Reasons?

The Population White Paper states clearly that to maintain the Singapore population as though we had a 2.1 total fertility rate, all we need is a maximum of 25,000 new citizens per year. The White Paper envisages that the PR population will remain constant at 30,000. And so, a growth of 25,000 citizens per year will translate to a total population of 5.75 million in 2030. Few people will have an issue with this.

However, what the White Paper projects is an increase of 88,000 migrants a year. This means that the remaining 63,000 migrants are allowed in purely for economic reasons.

In other words, for every 1 person that comes into Singapore to replace our shrinking citizenship, 2.5 persons are allowed in as transient workers for pure economic reasons. That is high and this is what the current debate should focus on instead of lumping the economic and demographic issues as one issue.

The question should be: should we increase the population by a further 63,000 transient workers every year? What are the alternatives to this? For example:

a)      What can be done to get more people in Singapore into the workforce? After all, there is at any one time, more than 30% of women who are not doing paid work and many people above 65 who would like to continue to do paid work. Singapore students, too, can be encouraged to participate more actively in part-time work by opening the economy up to them further.

b)      How can we increase productivity of the workforce? Letting in more transient workers is counter-productive to increasing productivity as cheap labour lessens the incentive for businesses to improve productivity.

These are not easy questions to answer. So, for starters, let’s stop confusing labour force issues with babies. This will lead to a much clearer debate on what strategies we should employ to address short term labour force issues and long term demographic issues.


[1] Grace Fu, Sylvia Lim, Seah Kian Peng, Foo Mee Har, in Parliament on 4 and 5 February.

Corinna Lim is the Executive Director at AWARE. This piece was first published in Today on 08 Feb 2013. Read the published version here.

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