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ESS ESSAY COMPETITION 2010/2011

“A New Nation of Immigrants? Challenges and

Opportunities Posed by Singapore’s Population Growth”

CHAN CHI LING

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Abstract

Motivated by the need to overcome limits of local resources and to attract foreign manpower,

Singapore opened its doors to foreigners four decades ago. Today, Singapore‘s rising

population continues to be driven by the influx of low-skilled transient workers and ―foreign-

talents‖, a policy choice that brings both opportunities and challenges. This essay considers

the import of low-skilled transient workers a matter of necessity (at least in the short run) by

virtue of Singapore‘s growth model. Following that it examines the economic opportunities

arising from the presence of ‗foreign talents‘ and the value of diversity in a knowledge-based

economy, asserting that regular injections of newcomers into the population enhances

economic dynamism essential for an aspiring global city like Singapore.

All these benefits, this paper asserts, are not without costs and challenges. A rising

population in an already densely populated country fuels problems associated with physical

constraints, manifested in surging housing prices, congestion in public places and transport.

Equally deserving of attention are problems of income inequality arising from wage

depression, and the long-term costs of relying on importing low-skilled workers to achieve

growth. Noting that immigration is an issue impinging on delicate matters of national identity,

this paper ventures beyond economic dimensions of the problem to discuss less tangible

tradeoffs of population growth driven by liberal immigration policy. Two further caveats are

briefly discussed: Population growth in itself does not necessarily lead to economic growth,

and because all societies have limited capacity to absorb immigrants one has to be mindful of

tradeoffs of any economic decision. In the final analysis, we realize that population and

immigration are as much political, social and cultural issues as they are economic ones.

Whether Singapore becomes a ―new nation of immigrants‖ or an ―alien-nation‖ is a question

that can be answered only by Singaporeans themselves.

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A New Nation of Immigrants?

Challenges & Opportunities Posed by Singapore’s Population Growth

People have always been at the heart of the Singapore Story. As a country with

virtually nothing to offer in terms of generating economic wealth but human capital and skilful

economic planning, there is little doubt that Singapore‘s rapid transformation from third world

to first has been rooted in how human resources are capitalized.

In recent years, the twin challenge of falling fertility rates1 and ageing population2

ushered in a tricky population challenge of sustaining economic growth with a declining local

workforce. Like most mature and greying economies, Singapore took the common policy

prescription of augmenting indigenous population through immigration. Immigration seems

not a question of choice, but is – to quote DPM Wong – a ―prerequisite for our survivali‖:

Seen in this light, Singapore‘s population growth is not merely about seizing

opportunities – it appears to be a survival imperative. Motivated by the need to attract both

low- and high-skilled foreign manpower, Singapore opened its doors to foreign immigrants

four decades ago. Population soared from 2 million in the 1970s to over 5 million today, and

foreign immigrants (PRs & Non-resident foreigners) accounted for 55% of this riseii (figure 1).

1 Refer to Appendix A for Diagram on Singapore‘s Total Fertility Rate (1970 – 2009)

2 Refer to Appendix B & C for a snapshot of Singapore‘s greying population and falling old-age support ratio.

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Figure 1 Growth of Singapore Population (1970-2010)

The rapid influx of foreign immigrants also means a shrinking proportion of indigenous

population over the years (figure 2):

Figure 2 Composition of Population (1970-2010)

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Figure 3 Composition of Population (2010)

As of 2010, 1 in 3 people (36%) in Singapore are foreign-born, one of the highest in

Asia3. With such heavy reliance on non-indigenous population since its pre-independence

days, it is hardly inapt to call Singapore a ‗nation of immigrants‘, oxymoronic as it does sound.

Since Singapore‘s population growth is driven predominantly by immigration, the question of

interest in this essay has to do with opportunities and challenges posed by immigration.

Immigration is further segmented into low-skilled and high-skilled immigration, and it is to the

former we shall first turn to.

3 In 2005 Singapore had the highest stocks of foreign-born population as a share of the total population in asia,

with the foreign-born population making up 42.6% of their populations. This level was almost six times higher than the average for 14 Asian economies (7.2%) and more than triple the average for 24 OECD countries (11.9%). (OECD. Society at a Glance – Asia/Pacific Edition. Korea Policy Centre, 2009) Refer to Appendix D for a diagram on comparative growth rates of foreign population in various countries.

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A matter of necessity

The economic case for low-skilled immigration in Singapore

One in three gainfully employed in Singapore is a foreigner iii; 85% of work-permit

holdersiv are low-skilled transient workers engaged in manual jobs in various sectors such as

manufacturing, shipbuilding, construction and household domestic services4. Their presence

reflects the need to address the growing gap between labour demand and indigenous labour

supply, though this is but one of the government‘s motivations in liberalizing foreign inflow.

Economic benefits of foreign transient labour to host countries are well-expounded

across economic literaturev. At the most basic level, an influx of transient workers adds to

the domestic labour supply, reducing wages and cost of production. In an economic upswing

they relieve labour shortages; in downturns they can be easily retrenched or repatriated5, as

had been the case during the 2008 financial crisis. This serves the twin function of reducing

threat of unemployment for indigenous population and stabilizing cyclical fluctuations in the

labour market. Moreover, labour imports increase not only the quantity, but also the range

and flexibility of the host country‘s human resources, since hiring foreign semi-skilled or

skilled workers saves investment costs of their education and training. A flexible foreign

workforce thus enables Singapore to ―maintain a critical competitive edge over competing

economies by allowing companies to expand workforce quickly to capitalise on

opportunities‖vi.

Furthermore, the continued process of economic restructuring does not necessarily

lead to a fall in demand for low-skilled labour. In fact, as observed by Saskia Sassenvii,

4 The remaining 110,000 are Employment Pass and S Pass holders who have recognized skills or professional

qualifications and earn a monthly salary that is equal or more than $1,800. Refer to Appendix E (―Employment change and residential status, 1998 – 2006) for a more detailed breakdown of foreigners in the manufacturing, construction and services industries. 5 This can be empirically observed in Singapore‘s case – refer to Appendix F on ―Employment Change by

residential status‖

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demand for low-skilled workers is stimulated by higher-income consumption habits of an

increasingly affluent middle class. Business activities that create more skilled-jobs are

accompanied by an inevitable demand for lower-skilled support workers such as drivers,

clerks, cleaners and maintenance workers. The latter are increasingly shunned by the

younger generation of workers who are becoming better qualified and educated 6 . Until

Singapore‘s growth model fully minimizes dependency on foreign transient workers (as the

current productivity drive strives to do), we will need them for a long time to come.

Rise of the Creative Class

The economic opportunities from a rising population, diversity and “foreign talents”

―It is more likely that one ingenious curious man may be found among 4 million than among

400 persons‖

William Petty, 1682.

It is noteworthy that an economist saw fit to see people as more than mere factor

inputs some 300 years ago before endogenous growth theories saw people as a function of

technological progress. Indeed, population rise does more than increasing the scale of the

economy; it enhances the economy‘s ability to overcome diminishing returns by pushing the

technological frontier. The logic in theory is intuitive and simple: the more people there are,

the more new ideas are created to everyone‘s benefitviii.

Yet this has not been the key rationale behind Singapore‘s move to augment its

population through attracting ‗foreign talents‘, since Singapore‘s physical size renders

competing internationally on the basis of population size impossible. The real opportunities of

a population growth forged by immigration are more aptly captured in Richard Florida‘s ―The

Rise of the Creative Class‖:

6 Refer to Appendix G for a snapshot of the Education Attainment of Resident Labour Force

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―…Economic growth is powered by creative people… diversity

increases the odds that a place with attract different types of creative

people with different skill sets and ideas.... diversity and concentration

work together to speed up the flow of knowledge. Greater and more

diverse concentrations of creative capital in turn lead to higher rates of

innovation, high-technology business formation, job generation and

economic growth.‖

Historically, creative innovative cities and were nearly all cosmopolitan; this was true

of ancient Athens, medieval Florence, post-revolutionary Paris, fin-de-siècle Vienna and

modern cosmopolitan cities like New York and London that drew talent from all corners of the

world. Cognizant that competitive advantage rests in talent and information in a globalized

economy, Singapore plugged itself into the global contest for ―foreign talent‖, welcoming high-

skilled immigrants with open arms and attracting more from the pool to become permanent

residents and citizensix.

The oft-heard justification for attracting ‗foreign talents‘ needs little elaboration:

Singapore‘s domestic talent pool is inadequate to support future economic growth especially

with growing competition from regional countries. This problem is compounded by gaps in

human capital distribution – at the top end, it needs more managerial talent with global

expertise, at the bottom it has a large pool of workers lacking formal qualifications and

needing to be retrained and upgraded7. Immigration can help plug that gap, one that will only

continue to widen with economic restructuring.

7 It helps to note that Ireland has about the same population size as Singapore but does not suffer from such a

serious shortage of talent because 75% of Irish have tertiary education, while only 45.7% of Singaporeans do. For a breakdown of educational attainments of Singapore residents, refer to Appendix G

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Furthermore, in a knowledge-based economy, the economic value of new ideas,

different types of experience, diverse ways of thinking about problems are increasingly highx.

Consider, for instance, the benefit of immigrants enhancing trade links, acting as a bridge

between businesses in Singapore and their country of birth. New immigrants from China are

helping Singapore entrepreneurs gain a foothold in the world‘s fastest growing market by

helping local firms compete effectively in a world where ―guanxi‖ is a make-or-break factor.

Even if the skills that foreigners bring in are not markedly superior, diversity in itself creates

opportunities for economic growth8. A regular injection of newcomers can enhance economic

dynamism and cultural vitality, something a population growing organically on its own may

not be imbued with.

8 Consider, for instance, how a 10% rise in the number of skilled immigrants as a share of the US labour force

tends to increase future patent applications by 0.8% and university patent grants by 1.3%. In recent years there are increasing evidence pointing to the economic spin-offs from diversity of skilled workers: See AnnaLee Saxenian. ―Brain circulation: How high-skilled immigration makes everyone better off‖. The Brookings Review, 20(1), Winter, 2002; OECD. A New Economy? The Changing role of Innovation and Information Technology in Growth, 2000.

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Why more is not always merrier

The economic challenges of rising population and influx of immigrants

For all the opportunities that a rising population brings, more is not always merrier. It is

important not to lose sight of serious challenges that may well undermine the feasibility of

growing population through immigration.

Physical constraints and rising costs of living

Already the third densest country in the world (with 7148 people/km2), the huge inflow

of foreigners within a short space of time creates upward pressure on property prices, greater

inflationary pressures and worsening congestion.

Foremost, residential supply has not kept pace with strong population growth over the

years, as can be observed in Figure 4:

Figure 4 Singapore Residential Supply and Population growth (1997 – 2008)

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Increasing demand outstrips supply, leading to prices of HDB resale flats and private

homes jumping by double-digit percentages in 2010 despite three rounds of cooling

measures since 2009. High property prices, instead of creasing a wealth effect, exert a

negative and significant ‗price effect‘ on consumption expenditures leading to a fall in the

average propensity to consumexi. Falling housing affordability9, coupled with rising inflation

rates, will mean rising costs of living that lowers economic well-being of Singaporeansxii.

Maintaining housing affordability in the face of market volatility and pressure from

increasing demand will continue to be a challenging task for the government. This demands a

judicious use of housing policies, and while the policy recommendations below will not be

silver bullets, they are broad measures worth considering:

Review the income ceiling for purchasing HDB flats in response to changing income

levels and rising prices of private housing

Expand the Public Rental Scheme to make it a real housing option for middle-income

households as well10

Consider a gradual shift from the current Market Pricing Subsidy towards a more

balanced Cost-Plus Pricing11

The rapidly rising population is also stretching Singapore‘s physical infrastructures, so

that squeezing cheek-by-jowl on public transport and traffic congestion have become a

phenomenon no stranger to commuters today. In fact, extrapolation from data provided by

9 Refer to Appendix H for a measure of housing affordability over the years.

10 The current Public Rental Scheme is available only for households with a total household gross income below

$1,500/- per month. Although the Build-to-Order scheme solves the problem of misestimating demand, it does not solve the problem of long waiting time. Expanding the Public Rental Scheme gives households an additional housing option and can act as a good buffer against demand and supply fluctuations. 11

At a time when housing prices are sky-rocketing, computing housing subsidy as a percentage of the prevailing market price can make the lower-priced housing options unaffordable for the low-income groups.

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Population Census 2005 and 2010 actually shows that the Singaporean commuter is worse

off over the past 5 years12.

This calls into question the adequacy of transport infrastructure, which is likely to come

under further strains in the face of a rising populationxiii. Recent plans to expand MRT lines

have come too late, too little; there is a need to better anticipate rise in demand due to the lag

times in building infrastructure, and ensure infrastructure capacity is adequate before making

any decisions to loosen immigration policy in the future.

Challenges of physical constraints are by no means an ‗immigration‘ problem alone;

addressing housing affordability, transport and rising costs of living will require close

coordination in policy directions and timings across ministries and domains.

Wage depression for low-skilled Singaporean workers & rising income inequality

Augmenting the local workforce through immigration holds down economy-wide wage

increases. With reference to Figure 5, the influx of foreign workers has increased labour

supply, depressing the equilibrium wage (from W to W2) and displacing local workers (as

represented in the fall of local labour supply from E to E2).

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In 2010, 6.19% of workers took more than 1 hour to get to work, compared to 5.09% of workers in 2005. The weighted average travelling time was 30.33 minutes in 2005 and 31.81 minutes in 2010.

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Figure 5 Foreign Workers and Wage Depression (Credit: Dr Hui Weng Tat, LKYSSP)

The dampening effect on wages is further reflected in the stagnant income levels of

the bottom 20% of employed residents from 1996 to 2009:

Figure 6: Real Median Monthly Income of Employed Resident 1996 – 2009

(Credit: Dr Hui Weng Tat, LKYSSP)

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Given the simultaneous depression of wages at the bottom and influx of high-wage

workers‘, it is no coincidence that liberal immigration policies have coincided with a widening

income gap. As illustrated below, Singapore‘s Gini coefficient rose from 0.444 in 2000 to

0.481 in 2008—surpassing China‘s and America‘s.

Figure 7 Gini Coefficient among Employed Households (Credit: Dr Hui Weng Tat, LKYSSP)

While the government has in recent years acknowledged the importance of ‗inclusive

growth‘, redistributing income through Workfare and adopting a more progressive approach

in distributing growth bonuses (Budget 2011), there is room for more aggressive

redistribution through more progressive taxation practices and comprehensive social

insurance. In the long run a stronger safety net broadens the distribution of benefits from

growth, bolstering local support for liberal immigration policies.

Additionally, admitting immigrants with complementary rather than competing skill-sets

through a more discriminating work permit system can reduce some downward pressures on

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wages of Singaporean low-skilled workers. To this end Canada‘s ―points systemxiv13‖ offers a

relevant point of reference.

Long term costs of high dependency on low-skilled foreign workers

Equally significant is the question of whether short-term economic benefits may be

offset by long-term costs. Economist Linda Lim notably argues that ―the ready availability of

foreign inputs is an actual deterrent to the better utilization of domestic resources‖xv. Because

it is always easier to simply add more inputs to obtain more outputs, importing low-skilled

foreign labour may artificially preserve the competitiveness of labour-intensive activities (such

as construction), creating little incentives to increase productivity through more capital- and

technology- intensive modes of production14. Yet long-run sustainable growth can only come

from productivity rise since there are upper limits to immigration and population size. Recent

efforts to boost productivity are policy options in the right track and should be followed

through more aggressively. While these may dampen competitiveness in the short run, a

slower pace of economic growth might not be a bad thing if it is achieved through productivity

increases.

13

In concept, the Canadian point system awards visas/work permits on the basis of such factors as education, age, job skills and English proficiency. 14

That Singapore‘s economic growth has occurred mainly through factor accumulation (the addition of inputs of labour and capital) rather than increased factor productivity (producing more with the same labour and capital) has similarly been pointed out by Lee Tsao Yuan, then Alwyn Young and Paul Krugman in the 1990s, when they highlighted little growth in Total Factor Productivity (TFR). Singapore‘s foreign expat population rises amid falling productivity – see Appendix H.

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A new nation of immigrants or Alien-nation? Hub or home?

―In the new Singapore, it is all right to love one’s country—even if it is China.‖

The Economistxvi

It is hard to miss the tinge of sarcasm in the preamble, written with reference to Zhang

Yuanyuan, a China-born permanent-resident of Singapore who caused a hullabaloo after

publicly professing her love for her native country at China‘s anniversary bash in 2010.

Incisively it throws to light the slippery concept of national identity in the globalized world of

today. Immigration, as we have seen, carries with it economic opportunities and challenges,

but above all impinges on delicate matters of national identity.

Like many global cities around the world that owed its economic success in part to

their cosmopolitan populations, Singapore has had to grapple with successive waves of

immigrants changing the character of the city:

―Some of us wonder: Will it change the ethos of our society? Will it mean

more competition for us at work, or for our children in schools? Will the

new arrivals strike roots here? Can they adjust to us, and we to them?‖

PM Lee Hsien Loong, in his 2011 New Year Addressxvii

The extent of such disquietude is especially appreciable in Singapore‘s context given

that as a nation-city-state it is not part of a larger national entity. MM Lee himself admitted

that ―Singapore is not a nation, but a nation-in-the-making‖. It comes as no surprise then that

the influx of immigrants foregrounds continuing complications of building national identity in a

young nation. The intensive backlash observed when PM Lee quoted a need for 100,000

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new foreign residents in 2010 and the subsequent revision to 80,000 betrays a collective-

psyche based on opposition of people we deem as othersxviii. Despite policies15 designed to

sharpen distinctions between locals, PRs and foreigners, anxiety remains for many who feels

increasingly like ‗second-rate citizens‘ living in a ―global-city‖ that is a hub or a place, but not

a home.

Economically, the circular flow of foreign talent enhances Singapore‘s flexibility and

capabilities, but politically and socially it poses problems of integration as we deal with a

constantly evolving national identity. As death knells for multiculturalism in Germany and

France are sounding, one wonders if Singapore‘s logic of the 5Ms16 will continue to hold.

But there are also reasons to be optimistic: immigrant countries like US and Canada

have proven that national identity can be built upon common aspirations and idealsxix. Of

critical importance here is not only the number of immigrants or pace of influx, but also the

adaptability of both foreigners and natives to differing cultures and languages, as well as the

existence of robust institutions that can cope with conflicts that diversity may entail.

Economist Edward Lazear argues that while gains from immigration are greatest when

individuals have different knowledge, natives need to be able to learn from foreigners at low

cost – which is why a common language is important. Immigrants should ideally come from a

wide range of backgrounds but should be proficient in the local language for immigration to

truly boost creativity. Otherwise, there must be gains from diversity that offset the potential

costs of different language and cultural friction for immigrants to be worth admitting.

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Examples of such policies include the hike in foreign worker levies, implementation of Workfare Income Supplements for citizens, National Service Recognition Award and various benefits handed out in Budget 2011. 16

5Ms = Multiracialism, multiculturalism, multilingualism, multireligiosity, meritocracy

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It is thus worthwhile to consider making proficiency in local languages an additional

criterion for assessing a migrant‘s eligibility for work passes, on top of salary and educational

qualifications17 . This is in line with recent public demands for a more discriminate and

selective admission system, and will go some way to minimizing linguistic frictionxx, alleviating

problems of integration and promoting meaningful exchanges that can yield more benefits

from a diverse population. The speed and magnitude of immigration should also be more

gradual and moderated, so as to give both locals and incoming foreigners time to adjust and

adapt to a changing societal landscape.

Given that cultural plurality is an irreversible fact in a globalized world, the real

challenge for Singapore is in renegotiating the common norms and values that hold the

society together in a common identity, while embracing diversityxxi. This demands continual

discourses among Singaporeans on how much diversity they are willing to accept at any

point in time, and the shared values that unite society.xxii

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Singapore‘s flow of migrant labour is currently managed by a graduated work pass system, which assesses a worker‘s eligibility for different work passes based on salary, educational qualifications, work experience and nature of job.

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Conclusion

We have options. Much as the title of this essay suggests that rising population driven

by immigration is a phenomenon that is here to stay, there is danger in assuming that

population growth is the necessary way to go just because it has been repeatedly so argued.

Ultimately, this phenomenon is policy-induced, and that means we do have control over the

challenges and opportunities that it brings.

For many years the need for population growth justified on grounds of economic

growth. Conventional endogenous growth models explain how population growth increases

the scale of the economy, spur technological progress, but even on the economic level of the

argument one should recognize that population growth per-se does not necessarily lead to

economic growth – it is also important to consider the nature and composition of population

growth, and how human resources can be better capitalized.

On a broader level, one has to remember that every economic decision has tradeoffs.

All societies have limited capabilities to absorb immigrants – too rapid an inflow leads to more

competition for jobs and reduced wages, and stretches the country‘s physical and social

infrastructures. These tradeoffs are not necessarily economical and measurable, but the very

tangible impacts on national identity should remind us that population and immigration are as

much political, social and cultural issues as they are economic ones. It is at its roots about

what kind of society we want to live in, and this is a choice only Singaporeans can make.

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Endnotes

i "Being open is the only viable option for us if we wish to be self-reliant and continue to prosper. Closing our

doors would only turn us into an island of no consequence, unable to provide for our people." (Wong Kan Seng.

―Making Singapore feel this is home in a global city‖. The Straits Times, 18 January 2011.)

ii The non-resident population grew much more rapidly (9.3 percent per year) than the resident population (1.8

percent per year) between 1990 and 2000.

iii The most recent workforce statistics with data on composition of workforce by nationality was in Janurary 2008.

Read Ministry of Manpower. ―Employment of Singapore Citizens, Permanent Residents and Foreigners, 1997 to

2006‖ available at http://www.mom.gov.sg/Publications/mrsd_employment_SC_PR_foreigners_1997-2006.pdf.

(last accessed on 15 March 2011) There were 2,495,900 persons employed in Singapore in December 2006.

Out of every ten persons working, six were Singapore citizens (60% or 1,498,500), one was permanent resident

(241,100 or 9.7%) and the remaining three were foreigners (30% or 756,300)

iv As of 2008, one in three gainfully employed in Singapore was a foreigner, among which 85% of them are low-

skilled transient workers. The most recent workforce statistics with data on composition of workforce by

nationality was in January 2008.

v As of 2008, one in three gainfully employed in Singapore was a foreigner, among which 85% of them are low-

skilled transient workers. The most recent workforce statistics with data on composition of workforce by

nationality was in January 2008.

vi Quoted from DPM Wong Kan Seng‘s Written Answers to Questions in Parliament Debate on ―Immigration

Policies and a Rooted Local Populace‖, Column 463. 20 October 2008.

vii Sassen, Saskia, ―Global cities and survival circuits‖, Global woman: Maids, Nannies and Sex workers inthe

Global Economy, edited by Ehrenreich, B and Hoschschild, A R (eds). New York: Metropolitan Books, 2002

viii Economist Simon Kuznet expounded a similar argument: ―Why, if it is man who was the architect of

economic and social growth in the past and responsible for the vast contributions to knowledge and

technological and social power, a larger number of human beings need result in a lower rate of increase in per

capita product?‖ In other words, people are the critical input into the process through which technology

progresses and population growth enhances the economy‘s ability to overcome diminishing returns.

ix Privileges are offered to P, Q and to S pass holders who earn a monthly income of S$2500; this includes

eligibility to apply to rent residential properties under the Scheme for Housing of Foreign Talent (SHiFT)

managed by Jurong Town Corporation (JTC).

x A mass of academic research has found that more diverse groups take better-quality decisions and have the

potential for increased productivity. See, for example, P.L McLeod and S.A. Lobel, ―Ethnic diversity and creative

in small groups‘. Small Roube Research, 1996; W. E. Watson, K. Kumar and L.K. Michaelsen, ‗Cultural

diversity‘s impact on interaction process and performance: Comparing homogenous and diverse task groups‘.

Academy of Management Journal, 1993; S.E Jackson, ‗Team composition in Oragnisational settings: Issues in

managing an increasingly diverse workforce‘. Group Process and Productivity, 1993.

xi Tilak Abeysinghe, Jiaying Gu. ―Lifetime Income and Housing Affordability in Singapore‖. Singapore Centre for

Applied and Policy Economics. Paper No. 2008/07 – July 2008

xii Inflation rates in early 2011 rising to a two-year high, rising costs of living has become the most prominent hot-

button issue among Singaporeans A survey of 618 voters conducted by Today Newspaper in April 2011 shows

that 8 in 10 surveyed says that the rising cost of living will influence how voters cast their ballots in the 2011 GE.

Feedback gathered by the government‘s e-engagement platform, REACH, similarly shows that rising cost of

living is what Singaporeans are most concerned about.

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xiii

Left unchecked, strains in public infrastructure may paradoxically feed into the problem of dipping fertility rate:

higher cost of housing relative to income requires later marriages and longer hours of work (and travelling to

work), which when accompanied with higher costs of living, discourages child-rearing. Ensuring that standard of

living is not compromised amidst rising costs of living will remain a long-term key challenge that affects

Singapore‘s international competitiveness and citizens‘ wellbeing.

xiv

In recent years less emphasis was placed on gap filling and more on the factors that supposedly influenced

the long-run adaptability of the new migrant. Along with this change went a shift away from an absorptive

capacity model (i.e., where the annual immigration flow was adjusted to short-run economic conditions, with an

increase in the inflow as unemployment fell and a reduction in the number admitted as economic conditions

deteriorated). In its place was put a model that set annual immigration levels at a bit less than one percent of the

Canadian population. This number would not change with short-run economic conditions. Hence, as the

Canadian government sought to increase the skilled share of arrivals, it also shifted immigration policy to a long-

run approach, and one based on adaptability rather than one designed to meet short-run occupational needs.

xv Linda Lim. ―Singapore‘s Economic Growth Model – Too Much or Too Little?‖. Singapore Economic Policy

Conference, 24 October 2008.

xvi The Economist. ―Singapore and Immigration: A PR problem‖, 12 November 2009.

xvii Li XueYing. ―PM‘s goal: All to enjoy fruits of growth‖. The Straits TImes 9 August 2010. A1, A4.

xviii In a Sunday Times survey carried out in 2007 involving 448 Singaporeans, shows that an overwhelming

majority – over 86% - of those polled expressed fear that white collar foreign professionals will take away jobs

from them. Such results show that there is an inherent mindset in society that perceives foreigners as a threat to

their livelihoods. A significant proportion – 43% - of respondents also felt that the state cares more for migrant

workers than its citizens.

xix In US, immigrants have to pledge their allegiance to the US and sign up to the values in the Declaration of

Independence and US constitution, but don‘t have to adopt any particular cultural habits. Despite the fact that

US‘ brand of multiculturalism is increasingly factious, this melting-pot approach‘ – which involves give and take

on both sides – has served her well. The Canadian model of integrating immigrants has been even more

encouraging: espousing ―diversity our strength‖, Canadians have come to terms with diversity, so much so that

there is an intolerance of segregation and closed doors.

xx This is especially noticeable in recent years with increasing complaints among Singaporeans and tourists

about the inability of foreign workers (mainly Chinese nationals) in the Singaporean service industry to

communicate using proper English.

xxi In fact, the very nebulousness of 21

st century national identity can be a strength, not a weakness, and that its

elasticity can allow nearly everyone to find a place if they want to. To quote Philippe Legrain, national identity in

the 21st century is ― a concept of a nation as an open rather than a gated community; one defined by diversity,

not masquerading as uniform; one united not by common ethnicity, but by common institutions and the

principles they embody‖

xxii Singapore represents an interesting case whereby her survival instincts still propagates top down,

institutionalised measures to define identity, as opposed to the organic process that far older nations have taken.

But whether Singapore will become an alien-nation or a new nation of immigrants is a matter Singaporeans has

to collectively decide, rather than leaving it to a small group of elites in the government. Immigration or

population growth should not be seen as a mere means to more economic growth, for just as man does not live

by bread alone, a nation does not survive in the long-run by material prosperity alone. Seen in a more positive

light, the resurfacing of concerns over foreigners‘ presence is an opportunity for a long overdue debate with

regards to what the ‗soul-of-the-city‘ is in Singapore‘s case, which Derek da Cunha observes has been thus far

―a cerebral and abstract matter that is of little relevance to the successful evolution of Singapore…‖ because

Singaporeans appear to have ―little time for matters philosophical‖

25

APPENDIXES

26

APPENDIX A

Singapore’s Total Fertility Rate (1970 – 2009)

Source: Department of Statistics, Singapore

Population statistics present grim trends of a continually falling Total Fertility Rate (TFR) over the years. In 2010, Singapore‘s TFR sank to a historic low of 1.16, down from 1.22 in 2009 and way below replacement level of 2.1 despite almost 30 years of government incentives xxii to get Singaporeans in the mood for love and babies. Primary reasons cited have been rising costs of living, economic uncertainties and changing attitudes among Singaporeans xxii towards marriage and childbirth and the overly successful Stop-at-Two program before the 1980sxxii. To put implications into perspective, suppose that TFR‘s decline is arrested and that no immigrants are allowed into Singapore: in which case the resident population will start to shrink as early as 2025 as deaths outstrip birthsxxii.

27

APPENDIX B

Singapore’s Population Pyramid (2000) and Projected Population Pyramid (2025)

28

APPENDIX C

Resident Old-age Support Ratio

Source: Department of Statistics, Singapore With the ageing population, the ratio of working-age residents to elderly residents declined. There were 8.2 residents aged 15-64 years for each resident aged 65 years & over in 2010, a decline from 9.9 in 2000 and 8.3 in 2009.

29

APPENDIX D

Stock of foreign-born population as a share of total population, 1990 – 2005 (%)

Foreign population as a share of total population, selected Asia-Pacific countries, 1990 & 2000

Sources: OECD. Society at a Glance – Asia/Pacific Edition. Korea Policy Centre,

In 2005 Singapore had the highest stocks of foreign-born population as a share of the total population

in asia, with the foreign-born population making up 42.6% of their populations. This level was almost

six times higher than the average for 14 Asian economies (7.2%) and more than triple the average for

24 OECD countries (11.9%).

30

APPENDIX E

Employment by Residential Status and Major Sectors (as at December 2006)

Source: Ministry of Manpower. ―Employment of Singapore Citizens, Permanent Residents and Foreigners, 1997 to 2006‖

31

APPENDIX F

Employment Change by Residential Status, 1998 to 2006

Ministry of Manpower. ―Employment of Singapore Citizens, Permanent Residents and Foreigners, 1997 to 2006‖

APPENDIX G

Educational Attainment of Resident Labour Force, 1999 and 2010 (as at June)

Source: Department of Statistics, Singapore

32

APPENDIX H

Average Property Price

Summary of Affordability Index for 30-year-old group

The Affordability Index is based on lifetime income-house price ratio calculated according to a formula by economist Tilak Abeysinghe:

An increase in HAI means that the affordability is improving and a decrease means an erosion of affordability. As illustrated in the summary table below, the HDI has been falling across all income quartiles. Past episodes of house prices escalations have led to the substantial erosion of housing affordability, especially in the private property market.

Source: Tilak Abeysinghe, Jiaying Gu. ―Lifetime Income and Housing Affordability in Singapore‖. Singapore

Centre for Applied and Policy Economics. Paper No. 2008/07 – July 2008

33

APPENDIX I