Why more migrants needed in Singapore

Imelda Saad Channel NewsAsia 3 May 12;

SINGAPORE: Another study has been released in support of Singapore's need to attract new migrants to slow down the impact of an ageing and dwindling population.

Released by the Institute of Policy Studies (IPS), the report is the first to take into account the country's non-resident population.

This includes those on work permits, long-term social visit passes and foreign students.

In its report, the institute sets out three scenarios.

One, where the proportion of foreigners remains at 25 per cent (or one in four) of the total population.

Two, where this proportion drops to 20 per cent (or one in five).

And three, where the proportion is raised to 33 per cent (or one in three).

For all scenarios, it is assumed that Singapore will take in 30,000 new citizens or Permanent Residents every year, and the country's Total Fertility Rate remains at 1.24

The report states that a higher non-resident population will mean a larger total population, from the current 5 million now to 6.8 million in 2030, if the proportion of foreigners in the population is raised to 33 per cent.

And while the average population will still get older, a higher proportion of non-residents will slow this process down.

The same is said for the support ration between a working adult and an elderly.

While the ratio will still decline, with more foreigners in the midst, the impact will be somewhat mitigated.

Assuming the country's Total Fertility Rate remains at 1.24 and it brings in 30,000 new citizens or PRs yearly with non-residents, the support ratio now for every one elderly aged 65 and above to a working adult is 1:10.3.

In about 20 years, this will be halved at 1:5.1, if foreigners make up 33 per cent of the population.

If Singapore takes in no immigrants, there will be only about two working adults supporting each elderly person, by then.

So, even with more foreigners in the mix, there will be fewer Singaporeans supporting the elderly.

But the paper shows that the problem is exacerbated without taking in migrants.

With or without foreigners, the labour force will be hit.

Even with the bumped-up crop of foreigners, the report shows the growth in total labour force will dip from the average 3.6 per cent annual growth which Singapore has been enjoying since the 70s.

With the current proportion of one in four foreigners in the midst, the labour force will grow by 1.04 per cent over the next 10 years.

Raising the proportion to one in three will see the labour force grow to 2.47 per cent annually, over the same period.

The IPS report comes just a week after a similar paper was issued by the National Population and Talent Division.

Both papers present population projections based on certain assumption and are not meant to be forecasts or predictions.

Together, the reports will form the basis of a national discussion on populations issues that will culminate in a White Paper to be released by the end of the year.

The White Paper on Population will set out issues important to Singaporeans and map out strategies for a sustainable population.

This will cover areas such as housing, transport and land use.

- CNA/wk

5 burning questions
Phua Mei Pin & Matthias Chew Straits Times 4 May 12;

ACADEMICS posed numerous questions about how many foreigners and new citizens Singapore should take in each year, and what kind of population growth it should aim for. These are the key questions:

How many people should Singapore house in 2050?

In their discussion on what optimal population Singapore should aim for, experts covered the potential impact of a large population on the environment.

Urban planning expert Malone-Lee Lai Choo noted that with limited land, more open spaces would need to be converted for high-density residential use. But some argued that it was possible to squeeze people into high-rise buildings, leaving the other areas intact.

Nevertheless, the academics raised concerns over the congestion that would result in MRT trains, in malls and in housing estates.

Statistician Paul Cheung noted that the MRT network was overcrowded because it had not been designed for the current population. So, he argued, Singapore should plan for 8 million in the future. 'Allow for higher, but settle for lower,' he said.

How can we make more babies?

A discussion of Singapore's low Total Fertility Rate (TFR) drew a lively response, with experts tossing up ideas on how it could be raised. Several cited examples of how Scandinavian nations had managed to turn their low birth rates around, and asked: 'Why can't Singapore do the same?'

Some said affordable housing, health care and social security were needed.

Agreeing, economist Tilak Abeysinghe cited a study showing that housing affordability could affect TFR. 'When homes are expensive, couples may delay marrying, buying a home and starting a family,' he explained later.

Sociologist Paulin Straughan blamed Singaporeans' excessive focus on work, which left little time for singles to date, and for couples to consider having children.

The competitive education system, she added, made it more stressful for parents. Her radical solutions: Get rid of PSLE and streaming, and abolish performance bonuses so people wouldn't feel pressured to spend long hours at work.

Will Singaporeans be willing to live with fewer foreign workers?

Experts repeatedly warned about the trade-offs that Singaporeans would face if they wanted to reduce the inflow of foreigners.

As Singapore's population aged, they pointed out, they would rely more on foreign workers to maintain their high quality of life.

'Which foreigner would you want to eliminate?' asked IPS director Janadas Devan. 'The maid who cleans your house and helps look after your children? The nurse who looks after your aged parents in a hospital or nursing home? The construction workers building the flats, train lines and hospitals you want built?'

But some, like the dean of the Lee Kuan Yew School of Public Policy Kishore Mahbubani, noted that many developed countries managed to sustain high female work participation rates - and high fertility too. They suggested that eldercare services be improved to support households better.

How much growth do we really need?

Should Singapore strive for high economic growth to compete with Asian giants like India and China? Or should it carve out its own niche and compete to be 'liveable' as a city, rather than try to be a bigger economy?

Such questions were raised during the exchange on economic growth goals.

Some suggested that higher population growth was needed to support higher economic growth. But others suggested that Singapore, being a developed country, should accept a lower long-term economic growth rate.

'It makes more sense to grow at 3 per cent rather than 6 per cent, than try to be something we're not,' said economist Yeoh Lam Keong. 'We are refusing to grow up as a developed city. The sooner we grow up, the better.'

Some suggested that the authorities be more selective about the type of people they let in. Taking in more skilled workers and less unskilled ones, they noted, would enable Singapore to maintain productive growth - and hence economic growth - with smaller numbers of foreign workers.

Can Singaporeans accept foreigners into their communities?

During a discussion of the social aspects of a rising immigrant population, some observed that Singaporeans had become less accepting of outsiders in recent years.

Labour economist Hui Weng Tat said the tension between locals and foreigners has risen because the influx of new citizens and foreign workers was seen as having depressed local wages. Others pointed to competition for space in housing estates and MRT trains.

'The change comes from the fact that suddenly, the competition became too intense. The Government was too slow in dealing with this,' said statistician Paul Cheung.

Experts noted, however, that integration can take a long time.

Sociologist Lai Ah Eng said she remained hopeful that better integration will happen among the young. 'The second generation and subsequent generations, that's when socialisation will happen,' she said.

Foreigners won't stem ageing population
Phua Mei Pin Straits Times 4 May 12;

A NEW population study by a think-tank shows that even if Singapore has as many as one foreigner for every two residents in the next 40 years, the population will continue to age.

At the same time, the labour force growth rate will decline.

This double whammy, in turn, will mean the number of working-age people to take care of each elderly person will keep sliding.

This was the conclusion from a set of population scenarios worked out in the study by the Institute of Policy Studies (IPS), released yesterday.

Said its director Janadas Devan: 'Whichever scenario pans out, this country is going to face enormous challenges.'

The scenarios, prepared by population researcher Yap Mui Teng, project how Singapore's population and labour force could look by 2050.

The study assumes the birth rate remains low and 30,000 new residents are added each year.

The factor that is different in each scenario is the proportion of non-residents in the population: one-fifth, one-quarter and one-third.

The scenarios were presented for discussion at a roundtable organised by IPS and the Civil Service College, with 45 experts and academics discussing the impact on the economy, society, families and quality of life.

The scenarios are the most comprehensive to date as they take Singapore's total population into account, including residents and non-residents.

Residents refer to citizens and Permanent Residents (PRs), while non-residents are mainly made up of people on work permit or employment pass, foreign students and dependants.

Earlier studies by IPS and the Government had left out non-residents.

The study shows that at the most aggressive intake of foreigners, when one-third of the people are non-residents, Singapore's total population would grow to 7.3 million, and its workforce to 4.4 million, by 2050.

If the intake is lowered to one-quarter or one-fifth, the total population will be 6.1 million, and the workforce, 3.5 million.

Depending on the scenario, the rate of growth of the workforce is 0.9 per cent at its highest and 0.3 per cent at its lowest - well below Singapore's historical average of 3.6 per cent a year since 1970.

Mr Devan said the drop in labour force growth means Singapore must work hard on productivity growth. Singapore's target is to increase productivity by 2 per cent to 3 per cent a year for the next 10 years.

He also named two other areas that Singapore must concentrate on: raising birth rates and doing better at integrating foreigners into the country.

The IPS scenarios come on the heels of the Government's first occasional paper on population issues, which was released by the National Population and Talent Division (NPTD) last week.

That paper studied five scenarios affecting only the citizen population. In each, the birth rate and the intake of new citizens were adjusted.

Its figures show the number of working-age citizens would also fall, even if the annual intake of new citizens reached 25,000.

The IPS study, besides expanding the study base to include the whole population, introduces the ratio of non-residents to residents as a key policy lever in managing Singapore's population.

The different sizes of the total labour force and growth rates shed light on the future of economic growth.

When contacted, an NPTD spokesman noted that the IPS scenarios do not reflect official government numbers or forecasts.

Still, the key implications and trade-offs highlighted by the roundtable participants 'are useful inputs for NPTD as we review our population challenges for the White Paper on Population to be released at the end of this year', she added.

Need for new citizens
Straits Times 4 May 12;

TWO agencies have in recent months released different sets of population scenarios.

They are the Institute of Policy Studies (IPS), a think-tank under the National University of Singapore's Lee Kuan Yew School of Public Policy, and the National Population and Talent Division (NPTD), the Government's lead agency on population matters.

Both said they had arrived at their projections independently.

Sept 7, 2011: IPS' first set of population scenarios on citizens and permanent residents (PRs)

Variables: Total fertility rate (TFR) and migration level

In a nutshell: Even with TFR raised to 1.85 from today's 1.2, if no new citizens or PRs are taken in, the total number of citizens and PRs will decline from 2025.

What it implies: If TFR and migration are the only levers available to the Government, bringing in new citizens will be critical to a population growth strategy. Neither strategy can stop the ageing trend.

April 24, 2012: NPTD's first set of population scenarios on citizens only

Variables: TFR and migration level

In a nutshell: Even with TFR raised to 2.1, if no new citizens are taken in, the population will shrink. If TFR remains at 1.2, a yearly intake of 20,000 to 25,000 new citizens is required to keep the population size steady.

What it implies: New citizens are needed to prevent population decline.

May 3, 2012: IPS' second set of population scenarios, on citizens, PRs and non-residents

Variable: Ratio of non-residents to residents (citizens and PRs)

In a nutshell: Across various ratios, bringing in more non-residents mitigates population ageing and slowdown in total labour force growth, but does not stop those processes.

What it implies: A robust population policy will need to include other strategies, such as productivity growth.

In the coming months before the release of the Government's White Paper on population, expect more papers from various sources and the launch of public engagement platforms.

Deputy Prime Minister Teo Chee Hean, who oversees population matters, said the process is to 'bring to light issues that are important to Singapore and Singaporeans, and develop a shared understanding of our strategies to build a sustainable population that secures Singapore's future'.

PHUA MEI PIN

Why can't Singaporeans have more babies?
Participants at seminar on population projections question basic assumptions
Leslie Koh Straits Times 4 May 12;

A SEMINAR held to discuss population projections yesterday ended up with academics posing questions which they said Singapore must answer before deciding on population and immigration policies.

Among other things, they asked: Why can't Singaporeans have more babies? What quality of life do they want in the future? And, what trade-offs are they willing to accept if they want fewer foreigners?

The questions came after the Institute of Policy Studies (IPS) released projections of how Singapore's populace might look like between now and 2050.

It found that even if the share of foreigners went up from the current one-quarter to a third of total population, the nation's proportion of working-age citizens would eventually shrink, and its elderly population grow.

The think-tank's study came a week after the Government's National Population and Talent Division released its own projections on the number of new citizens needed to halt population decline.

Bringing in foreigners to supplement the local workforce will push population figures up.

Architect Liu Thai Ker, one of the speakers at the seminar, urged Singapore to take a pragmatic approach.

'Population growth is like a flood, you can't stop it,' he observed. 'Rather than talk about stopping the growth, we should talk about how to deal with it.'

The issue of how many foreign workers and new citizens to take in is a politically sensitive one that has dominated public debate in past months. Many Singaporeans are unhappy with the Government over what they see as a liberal immigration policy, saying that migrants do not fit in well, compete for their jobs and drive wages down.

Their concerns were echoed by many of the 40-plus academics gathered at the seminar at Orchard Hotel yesterday, as they looked at the implications of a growing population for the economy, the environment and social integration.

But while much of the debate has centred on immigration policies, the academics went back to the basics and questioned some of the basic assumptions - such as, why Singapore appeared to have given up trying to raise its Total Fertility Rate.

This is the average number of children a woman gives birth to in her lifetime. Singapore's has dropped to 1.2, well below the 2.1 it needs to keep its population from shrinking.

Academics blamed this on changing lifestyles and inadequate childcare facilities, and called on the Government to do more to help couples raise families.

Sociologist Paulin Straughan said the problem lay even deeper: stress at work, big focus on careers and high expectations of marriage were delaying young people from tying the knot and having children.

'Even before you can encourage baby-making, you have to encourage courtship and marriage,' she said.

What made yesterday's discussion especially lively was the varied backgrounds of the participants.

Representing several disciplines, they included familiar names such as IPS special adviser Tommy Koh, IPS senior research fellow Gillian Koh, architect Liu Thai Ker, statistician Paul Cheung and economists from both universities and the private sector.

On the whole, most appeared to favour slower population growth and a smaller intake of foreigners, although they acknowledged that foreign workers would always be needed.

Economist Yeoh Lam Keong asked if Singapore really needed to keep growing its labour force at a high rate, and suggested that Singapore accept a lower economic growth rate in the long term, like other developed countries.

Others suggested that raising productivity more aggressively and bringing in only skilled workers could sustain economic growth without requiring a large army of foreign workers.

Some noted that a smaller population would ensure a better quality of life, as congestion in housing estates and on public transport would be less.

Others warned about the impact of a growing population on social tensions between locals and foreigners, and discussed ideas about how to get new citizens to integrate into Singapore society.

Psychology professor David Chan posed a more philosophical question, saying Singapore had to decide what kind of society it wanted before trying to arrive at hard numbers.

'This is about consequences and outcomes, not about optimal population figures,' he said. 'We have to define the outcomes we want... what people think about Singapore as a country.'

Immigration will help but ...
Singapore's labour force growth will still slow dramatically: IPS study
Tan Weizhen Today Online 4 May 12;

Singapore - Growth in labour force will slow even if Singapore raises the proportion of foreigners in its midst, according to a new study released by the Institute of Policy Studies (IPS) yesterday.

In the best-case scenario, where the proportion of foreigners rises to be one in three of the total population - up from one in four currently - growth in labour force will be at 2.47 per cent annually over the next 10 years. In the same scenario - but in the decade from 2030 when the silver tsunami is set to hit Singapore - growth will slow dramatically to 0.3 per cent.

At the current proportion of one in four, growth in labour force will fall to 1.04 per cent in the next decade - more than half of the average growth rate of 3.6 per cent seen annually since 1970.

According to the study, the impact of the declining support ratio between a working adult and an elderly will also be mitigated with immigration.

Similar to the paper released last week by the National Population and Talent division (NPTD), the IPS study sets out various scenarios but with differences: It takes into account permanent residents (PRs) and foreigners, which includes those on work permits, long-term social visit passes and foreign students. It also projects total and non-resident labour force figures.

The IPS study sets out three scenarios, with an injection of 30,000 new citizens or PRs per year assumed and the national total fertility rate remaining at 1.24. However, the proportion of foreigners is factored in at different levels - 20, 25 and 33 per cent.

This study done by Dr Yap Mui Teng, senior research fellow at IPS, together with the occasional paper by NPTD, both of which are not forecasts or predictions, will form the basis for a Government white paper on population goals and policies to be released by the end of the year.

At a conference to present the IPS study yesterday, academics and economists alike called for increased labour productivity - even for the aged - and other innovative solutions to beat the population conundrum for Singapore. But tackling this problem is "not a pure numbers game", some felt, as they called for some norms to be challenged.

Mr Yeoh Lam Keong, adjunct senior fellow at IPS and vice-president of the Economic Society of Singapore, pointed out that high-income countries in Europe and the United States have seen labour growth of between 0 and 1 per cent "with no ill effects".

In particular, he calculated that from the period that IPS focused on in the study - which brings about a 1.1 million increase in population - would translate to only 0.6 per cent in GDP growth.

"Straight off, the economic cost benefit is a no-brainer. Why would you want an extra 0.6 per cent in growth for a final population that is going to strain severely the environment?" Mr Yeoh wondered.

Professor Hoon Hian Teck, associate dean of the School of Economics at the Singapore Management University, asked for the cost of spending on baby bonus packages, versus the social cost of bringing in new immigrants to be examined. Doing some projections of his own and taking into account PR numbers as well as the number of resident workers, and foreign workers, he determined that 5.5 million would be an optimum population size, taking into account the level of citizen workforce needed to pay taxes.

Other academics called for the existing population to be tapped on more effectively, and also asked for the type and mix of labour that Singapore wants to attract to be examined.

Singapore's Ambassador-at-large, Professor Tommy Koh, challenged the assumption that one cannot be productive after 65 years old, as the dependency ratio is based on that.

From about 7.7 younger residents supporting every elderly resident in 2010, the study projected an eventual decline to fewer than two supporting every elderly resident in 2050.

Professor Koh said: "I question whether one should just say, post 65, you are no longer able to work and support yourself, and therefore become a dependant. If you have enough savings, and you don't depend on your children, is it fair then to describe a parent as a dependant?"

To offset the effects of the economic and social burdens of the aged on the young, academics also urged for stronger ageing in place. Sociologist Paulin Straughan said that stronger eldercare infrastructure will reduce dependency on the young, while Mr Yeoh felt the State could step in to play a role where family cannot.

Three scenarios projecting total population and labour force
Scenario 1:

Non-residents make up 20 per cent of the total population

- Total population growth sustained at 0.5% Compound Annual Growth Rate through 2050: 6.1 million population in 2050

- Total workforce growth of 0.3% Compound Annual Growth Rate through 2050: 3.5 million workforce in 2050


Scenario 2:

Non-residents make up 25 per cent of the total population

- Total population growth sustained at 0.6% Compound Annual Growth Rate through 2050: 6.5 million population in 2050

- Total workforce growth of 0.5% Compound Annual Growth Rate through 2050: 3.8 million workforce in 2050


Scenario 3:

Non-residents make up 33 per cent of the total population

- Total population growth sustained at 0.9% Compound Annual Growth Rate through 2050: 7.3 million population in 2050

- Total workforce growth of 0.3% Compound Annual Growth Rate through 2050: 4.4 million workforce in 2050


Source: Institute of Policy Studies

Note: For all scenarios, it is assumed that Singapore will take in 30,000 new citizens or Permanent Residents every year, and the country's Total Fertility Rate remains at 1.24.