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Tuesday, October 16, 2012

A population to sustain a home and global city

A population to sustain a home and global city

Deputy Prime Minister Teo Chee Hean addressed a range of population issues at a dialogue with 220 people on Tuesday night. The event was one of several held to consult the public, as the Government prepares to issue a White Paper on a sustainable population strategy in January. Here are excerpts of Mr Teo's speech.
The Straits Times, 12 Oct 2012

AS AT end June this year, there were 3.29 million Singapore citizens. But this is a static view. What's more important are the longer-term trends. Our fertility rate has been falling steadily over the years and was only 1.2 last year, quite a long way from the 2.1 that is required to replace ourselves.

With a TFR (total fertility rate) of 1.2, it means that for every 100 Singaporeans in this generation, there will be only 60 Singaporeans in the next generation. And in the generation after that, there will be only 36 Singaporeans. These 36 people will have to eventually support the 60 people from the previous generation, and many of the 100 people from the generation before that, because we are all living to a riper, older age.

If our birth rates stay at 1.20, and if we do not have immigration, our citizen population will start to decline from 2025. Our workforce of Singapore citizens will start to decline even earlier, from 2020, which is just seven years from now.

Marriage and parenthood

OUR first priority is to build as strong a Singaporean core as we possibly can by encouraging more Singaporeans to get married and have more children, and at an earlier age.

There are some positive signs. Our surveys show that 85 per cent of singles want to get married and eight in 10 married couples want to have two to three children.

We want to do our best to create an environment that supports Singaporeans to fulfil this desire. In fact, since 1987, we have encouraged Singaporeans to have three, or more, children.

Since 2001, we have redoubled our efforts, and put in place a comprehensive Marriage and Parenthood Package. These measures were enhanced again in 2004 and 2008, and again we are currently studying further enhancements.

We will strive to create a supportive and conducive environment for raising children, and we hope that couples will make the decision to start a family, even if circumstances do not quite fit their expectations completely or perfectly.

With all of us doing our part, I hope our birth rate can increase to at least 1.4 or 1.5. It was not so long ago that our birth rate was around 1.4 to 1.5, in the late 1990s and the early 2000s.

Of course, it would be very good if our birth rate was higher than 1.5, but I think it will take time to change this, and we will need a huge effort from everyone. I hope that one day we will get there.

Immigration

EVEN though we have been encouraging more Singaporeans to marry and have children, we have actually been falling short of the numbers to replace ourselves. We need approximately an additional 20,000 new Singaporeans per year, to keep our citizen population stable.

Who are these new Singaporeans? A good number are spouses of Singaporeans. This is not surprising, given that nearly 40 per cent of marriages last year, or about 9,000 of the 22,000 marriages, were between a Singaporean and a non-Singaporean.

Most of the other new citizens are adults in their prime working years and their families, and we select those who are able to contribute to Singapore, and can integrate into our society.

So, with 20,000 new citizens per year, what we are essentially doing is trying to "fill" this shortfall.

Today, our population structure looks like a barrel. And if we project forward without immigration, in 2050, in 40 years' time, we will become an inverted triangle - with many more older people above the age of 50 and very much fewer young Singaporeans.

And so what is it that we are trying to do with immigration? It is to fill in those parts in the younger age groups so that our population structure will look more like a cylinder or a rectangle. What we are trying to do is to have a more stable and sustainable population.

We also have 530,000 permanent residents (PRs) today. These are people who we assess can make a long-term contribution to Singapore, but either they are not yet ready themselves to become Singapore citizens, or we are not yet ready to have them become Singapore citizens.

We have been taking in about 30,000 PRs per year in the last two years, compared to about twice that number in the four to five years prior to that. So our permanent resident numbers have, in fact, stabilised, and in the last two years the numbers have decreased very slightly.

Non-resident population

WHAT about our non-resident population? We have about 1.5 million non-residents in total, and this is the composition.
There are 220,000 dependants of citizens. These are spouses of Singaporeans, children of Singaporeans, and some of our higher-end Work Pass holders.

We also have international students, where the numbers have come down from about 100,000 in 2008 to about 84,000 in July this year.

We also have foreign domestic workers - about 210,000 of them. We have about 680,000 Work Permit holders. Most of them are doing work which either Singaporeans are not keen to do, or where there are not enough Singaporeans to do; 280,000 are construction workers.

And then we have the PMETs - professional, managerial and executives who are Employment Pass holders. They number about 170,000. There are also about 130,000 associate professionals. This group has been growing quite quickly, and we are trying to see how we can manage this growth.

Creating jobs

SINGAPOREANS are highly aspirational. We want good jobs for ourselves and particularly for our children.

We need to bring in new growth areas and new exciting industrial sectors to create such jobs. Sometimes, you do not have enough Singaporeans to create enough of a critical mass in these new industries for a start.

One example is the biomedical science industry. Ten years ago, in 2001, one in five of the professional, managerial, executive positions in the biomedical sciences industry were held by locals. This proportion has now increased to one in three, and in a much larger sector too.

And in these last 10 years, 2,000 new PME jobs for locals were created in this sector. We could not have kick-started this sector without bringing in people to help create the critical mass to get the sector growing. Over time, the sector expands and provides more opportunities, as we train more Singaporeans to take up these jobs.

While Singapore is still an attractive business location, we do face competition from many emerging cities.

I co-chair the Singapore-China Joint Council for Bilateral Cooperation. When I visit some of the cities there, they are very exciting and vibrant. What they are looking for in terms of investments in jobs and industries is very often what we are looking for. Cities like Tianjin, Suzhou or Shanghai are moving very fast, and they are very hungry.

If we have a shrinking and ageing population, it will be much more difficult for us to bring in exciting new industries, to attract new investments. Singapore will become a much less dynamic and vibrant place, and our young people who want to work in such growth industries may then go off to Tianjin or Mumbai or elsewhere. That would make our population problem even worse.

Foreign manpower needs

UNLIKE our resident population of citizens and PRs for which we want long-term stability, our foreign workforce is a transient one. It can adjust, grow, or shrink according to our needs. This gives us a lot of flexibility, and is one reason why we have been able to maintain relatively low unemployment through the economic cycles.

But we cannot grow our foreign workforce indefinitely. In fact, we have already started to tighten the access to foreign workers to slow down the growth of the foreign workforce.

In the first six months of this year, the growth in foreign manpower (excluding foreign domestic workers) slowed to 34,100, compared to 36,800 in the first half of last year.

Fifteen thousand of the growth for the first half of this year has been in construction. This is three times the growth in the first half of last year. We need construction workers to build HDB homes and MRT lines.

The other sectors would have seen the growth in total foreign workforce slow down quite seriously - from 31,000 to 18,600.

We already know from surveys that eight in 10 small and medium enterprises (SMEs) are facing manpower shortages, and three in 10 are looking to relocate overseas to stay viable.

Now this is a serious matter because our SMEs employ 70 per cent of our workforce, and we have to be mindful that many of the SME workers are Singaporeans too. These Singaporeans will lose their jobs if our SMEs move abroad or close down. So we have to make these adjustments in a calibrated way to make sure the huge efforts we are putting into productivity can have the time to take place.

We also live in an increasingly volatile world. In the last 15 years we have seen five down-cycles - the Asian Financial Crisis in 1997, Sept 11, 2001, Sars in 2003, the Lehman crisis in 2007-2008, and now the euro zone crisis.

In those years when growth is strong, we should seize the opportunities that come our way. In such times, we may allow more foreign workers to come in to supplement our workforce. Such periods will help make up for years of slow or even negative growth.

But I think the overall growth target of 3 to 5 per cent annual growth set out by the Economic Strategies Committee up to 2020 is a reasonable growth rate, if we can even achieve that.

How many people can we have in Singapore?

MANY people have also asked: "We are so crowded already - how many people can we take on our small island?"

Singapore feels crowded today because population growth surged ahead of our infrastructure, transport and housing as our economy rebounded rapidly in the last few years. We have been working hard to catch up - which also explains the increase in construction workers for now.

How many people we can have in Singapore depends on many factors, including how well we plan our urban environment as well as the technology solutions that will be available to us. If you look at Pinnacle@Duxton, many people want to live there, even though the population density is very high, because it is convenient and the environment is nice, with amenities close by.

URA (Urban Redevelopment Authority), in their most recent mid-term concept plan review in 2006, assessed that Singapore has sufficient land to support a population of 6.5 million. Several experts have commented that there is room for growth beyond that number, and we are going to seriously study this, because that is the responsible thing to do.

Let me stress that these are planning parameters and not a population target. It does not mean that Singapore will go for a population of that size. The problem is that without proper planning, there will be crowding leading to a poorer living environment. So it is better to plan early, so that Singapore can continue to be developed in a well-planned way with good living environment.

Singapore: Our Home, A Global City

ONE of the big concerns we have heard is: "Will I feel like a stranger in Singapore?"

Singapore has always been an immigrant society. If you look back to the roots of your own family, you do not have to go back very far to find somebody who came to Singapore from elsewhere and decided to sink roots here. Our diversity has been a huge strength for Singapore, but also meant that we need to put in additional effort to build national cohesion. Because of this diversity, Singaporeans understand the region better than most.

We have an understanding and experience of different cultures, languages and people. This is a strength for Singaporeans. We can be quite comfortable living anywhere in the world. And this ability to transit from culture to culture will be a key attribute for any exciting, growing city in the future.

The structure of our population has also been evolving. We now have more Singaporeans living and working overseas, even as we have more foreigners living and working in Singapore. More Singaporeans are marrying foreigners - making up 40 per cent of marriages. More Singaporean children will have fathers or mothers who were not born in Singapore.

We are united, not by where we are born, but by the values we live by and a common desire to want to make Singapore, our home, better.

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