Singapore, which is boosting infrastructure to accommodate a population of 6.9 million by 2030, said the number of people in the city state will be “significantly” lower than what it is planning for.
The government won’t decide on a population trajectory beyond 2020, Prime Minister Lee Hsien Loong said in Parliament yesterday as lawmakers from his ruling party endorsed a white paper that outlined proposals including allowing more foreigners into the country to boost the workforce. Opposition members rejected the motion, saying immigration as a policy to spur economic growth is not sustainable.
Record-high housing and transport costs, public discontent over an influx of foreigners and infrastructure strains in the country of 5.3 million people are weakening approval for Lee’s party. Singaporeans are planning a protest next week against the government’s population projections for 2030, which could see citizens, including new ones, making up only one of every two people on the island smaller in size than New York City.
“We will track and control the number of non-Singaporeans and the inflow of immigrants so that we are not overhauled just by the sheer flood of people coming in,” Lee said. “We are not deciding on a population of 6.9 million for 2030 now.”
Lee’s administration is under pressure to placate voters without disrupting the entry of talent and labor that helped forge the only advanced economy in Southeast Asia. His party lost two by-elections after returning to power in May 2011 with the lowest share of the popular vote since independence in 1965.
Much of the public opinion I've come across is hostile. This expatriate blogger and this Singaporean blogger, for instance, each favour letting the Singaporean population age and eventually decline, if it helps prevent a deteriorating quality of life for Singaporeans. The dramatic consequences of very low fertility in Singapore don't seem to matter. (An April 2012 government presentation suggests that, at current birth rates and without increasing citizen numbers through naturalization, the Singaporean citizen population will start experiencing negative decrease around 2025. This seems about right.)
What are the reasons for low fertility in Singapore? Numerous papers--"Below-Replacement Fertility in East and Southeast Asia: Consequences and Policy Responses" by Gubhaju and Moriki-Durand, published in 2003 in the Journal of Population Research; the 2011 paper "The Determinants of Low Fertility in Singapore: Evidence From a Household Survey" by Hashmi and Mok; the East-West Centre's May 2010 paper "Very Low Fertility in Asia: Is There a Problem? Can It Be Solved?" by Westley, Choe, and Retherford--trace the causes for very low fertility in Singapore, as elsewhere in high-income East Asia, to contradictions between the policies which promote high economic growth and policies which promote marriage and family formation, and conservative norms for women in families and as mothers which encourage many women to postpone marriage. As a consequence, marriage rates have dropped while non-marital fertility remains low. (The two factors seem of comparable importance.) In the context of a very competitive economic environment made increasingly more so by deregulated labour market and immigration, it makes sense for individuals to postpone family formation and instead work on accumulatng the capital necessary to live. These are compounded by the very high cost of living in an increasingly densely-populated Singapore, and the economic cost associated with parenthood.
Gavin Jones' paper "Late marriage and low fertility in Singapore: the limits of policy", published in May 2012 in The Japanese Journal of Population, makes the point that--to a certain extent--Singapore's three decades of heavy government involvement in fertility, starting in the 1980s with relatively crude baby bonuses but proceeding to increasingly sophisticated schemes for government childcare and paid parental leave, may have helped keep fertility high. Recorded fertility in mostly-Chinese Singapore may be lower than that of the Chinese living in the Malaysia that Singapore was once part of--the Malaysian situation was profiled here at Demography Matters in 2009 (1, 2)--but it's higher than that of other East Asian cities.
Comparison[s] with low-fertility East Asian countries [raise] some interesting observations. First, Singapore’s fertility is in the same league as these countries, though it has never gone as low as recent figures for Taiwan, Hong Kong and South Korea. Bearing in mind, however, that Singapore is a city-state, comparisons with other cities in the region are appropriate. When this is done, we find that Singapore’s fertility rate is approximately 15% to 50% higher than in cities including Tokyo, Seoul, Busan, Shanghai, Beijing, Taipei, and Hong Kong [. . .] There may be some elements of policy in Singapore that are partly responsible for these differences. Second, fertility differs substantially among the different ethnic groups in Singapore. Malay fertility is substantially higher, and Chinese fertility lower, than the average. However, given the three fourths weighting of Chinese in the resident population, the overall fertility level is heavily influenced by the fertility of Chinese Singaporeans (whose TFR fell to a historic low of 1.08 in 2009). Malay fertility rose substantially for some time after being the first Muslim population in the world to reach replacement level fertility in 1976, but it has recently fallen sharply to reach its 2009 TFR level of 1.8.
[. . .]
Fertility has not responded as hoped, and this may well reflect the fact that the baby bonuses and tax concessions for children are not substantial enough to make much of a dent in the high monetary costs of raising children. Moreover, the culture in many Singapore workplaces remains unfriendly to those who prioritise family over responsibilities to the firm, and this discourages women from having a child that may hurt their career prospects and relationships with workmates. Nevertheless, it could well be that Singapore’s more comprehensive policies to support marriage and childbearing go a long way towards explaining why fertility rates in Singapore, though disappointingly low from the perspective of the Singapore government, are higher than in other major cities in the region, as noted earlier.
Granted that it's unlikely that the Singaporean government can do anything about the high cost of living in Singapore, or that it will be able to enact anything more than slow change in the cultural norms which keep fertility rates low, skepticism about the results of the latest government push seems justified.
"My mother-in-law hates me and she says I'm selfish, but I don't really care," says [Penelope] Sim, a human resources consultant who's been married for six years. "Everything's crazy expensive and life's already stressful enough here without children. If there's no one to carry on the family name, then so be it."
Sim, 33, embodies Lee's challenge to persuade Singaporeans to wed younger. While the birth rate was about 1.3 children per woman in 2012 - barely enough to replace one parent - a backlash against soaring immigration forced the government to curb the influx of foreigners, leading to labour shortages and slower economic growth.
Measures since 1987 to reverse declining fertility, including handouts of as much as S$18,000 (HK$113,600) and extended maternity leave, haven't worked. The nation's birthrate in 2010 and 2011 were the lowest in 47 years of independence. About 36,000 babies were born to residents in 2011, compared to nearly 50,000 in 1990.
The failure to encourage more births means the country will face a shrinking pool of workers and consumers - a deterrent to investment. It will also increase the burden on younger employees to pay for an ageing population. Lee says higher taxes will be needed in the next two decades as the government boosts social spending to support the elderly.
Measures released on January 21 on a government website called "Hey Baby", include boosting Singapore's annual budget on marriage and parenthood to S$2 billion from S$1.6 billion, including spending on matchmaking, housing grants, childcare and fertility treatments and cash gifts for babies. In 2001, the budget was S$500 million.
The prime minister, who has four children, is encouraging couples to start a family earlier by giving priority public housing to those with children below 16 years of age. With some of the most expensive real estate in Asia, government-subsidised homes are the only affordable option for most young couples, and waiting lists for new apartments can extend years. The government will make a S$3,000 contribution to childhood medical expenses and last week announced measures to make childcare more affordable.
Is immigration the answer? In the short term, it may be, but as Mukul G. Asher noted in 2008--see this short presentation that was expanded in this paper--Singapore will be competing for immigrants with other destinations, many of which may do a better job of reconciling economic and family needs. The fertility of new Singaporeans is likely to converge with the old. In the medium term, unless unrealistically large numbers of immigrants come to Singapore, the population is still going to age spectacularly. In the long term, a bigger problem may be created. (The conclusion of the South Korean segment of the United Nations' report on replacement migration that, in order to keep potential support ratios at the level of 1995 given prevailing fertility, 5.1 billion people would need to immigrate by 2050 comes to mind.) William Pesek, below, may be right to call this "the human equivalent of what Bernard Madoff did with money", “Ponzi demography.”
All this leaves aside the issue of whether or not immigration on the scale envisaged by the Singaporean government is going to be popular, or even politically possible; authoritarian though Singapore might be, it's still a parliamentary state with elections. Clinging to an economic model requiring politically unsustainable--perhaps physically unsustainable, given Singapore's small size--level of immigration brings to mind Paul Krugman's argument that high economic growth in East Asia, especially Singapore, was the consequence less of productivity growth and more by inputs of labour and capital. At some point, something will have to give. William Pesek's Bloomberg News opinion piece, "Singapore's Population Bubble", highlights the potential fragility of the current political consensus.
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 bucking 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.
[. . .]
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.
[. . .]
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.