18

the population issue

today wednesday 7 November 2012

19

the population issue

today wednesday 7 November 2012

why worry so much about a shrinking workforce?

Singaporeans would find it tough to get jobs they aspire towards, or in extreme, any job at all Lower-income citizens would be most affected when growth slows, with the highest unemployment rate More mobile Singaporeans may seek opportunities abroad, creating a brain drain Stagnating economy would create greater demand for social spending, while reducing fiscal resources

On the role of the transient (non-resident) workforce ... 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 for our whole economy, and for specific economic sectors. 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, even in periods where we faced an economic downturn.
Mr Teo Chee Hean
Deputy prime minister and minister in charge of population policies

A shrinking workforce could limit investors expansion prospects, causing them to reconsider investing in Singapore Local businesses may have to relocate also due to expansion constraints, but also because they rely on the ecosystem created by MNCs. Number of jobs available would fall Diversity of jobs would be affected, as it would be difficult to open up new sectors

Lets project for 20 years after we hit sixmillion. How much can our land size and infrastructure accommodate then? ... Were going to hit Hong Kong standards soon. So when weve hit six million or so, what do we do then? Do we say stop?
Mr Marc Das

our infrastructure
coming up over the next 10 years MRT system: Rail network will double from 138km (in 2008) to 280km over the next 10 years. Shorter waits for commuters with work being done to replace re-signalling system. 400,000 housing units will be within 400m of a Rapid Transit System station. Shorter travel times with direct accessibility from the north-west and east to the CBD and Marina Bay area, when Downtown Line is completed. Public bus network: 800 new buses to be rolled out over the next five years, raising capacity by 20 per cent. Housing: Heartlands being remade to provide a good living environment for all. Between 2006-2010, HDB launched some 41,000 BTO flats. Another 51,900 private residential units (excluding ECs) planned for 2006-2012. In 2011-2012, BTO supply was significantly increased by another 52,000 units (equivalent to Clementi and Pasir Ris towns combined); at least 20,000 BTO units planned for 2013. Healthcare: More nursing homes and hospitals, such as the Ng Teng Fong Hospital, Sengkang General Hospital, new community hospitals in Jurong, Yishun and Sengkang. Social spaces: City in a Garden with attractive parks, recreational spaces, built-up environment greened with rooftop gardens/skyrise greenery. Most homes will be within 400m of a park. Extensive network of green corridors with the 150km Round Island Route to link parks, nature reserves, recreational nodes. The Sports Hub at Kallang will be completed in 2014.
Bloomberg

On diversity ...
made the choice to settle here, marry a local, move into a HDB flat and embrace the local culture. The diversity is a welcome thing? Taking to the local lifestyle living in public housing estates, taking the MRT Marc: Yes. I drink in the coffeeshop on weekends and they (new citizens) are there in shorts and slippers hanging out. Thats nice. I welcome that. One thing to note is that if we clamp down on granting citizenships or permanent residence, thats going to have an impact on such families here. Marc: What will happen to families where one spouse is a foreigner is that their extended families will be affected, if they want to move here. Walter: Thats an interesting point. I have a colleague who is English. Her family has also moved to this region, but to JB. They have a scheme in Malaysia where if you buy property there, you can stay permanently. Its quite welcoming there. I think clamping down is not the right term I would look at it as a need to be more selective.
Continued from page 17

rate scorecard, were doing excellently. But should that be the gauge?

not be viable in the long term. The Governments approach to the problem of the shrinking workforce is three-fold: Restructure businesses and retrain workers to be more productive; get more residents, like housewives and retirees, to enter and stay in the workforce; and complement the resident workforce with foreign workers. Marc: Yes, they are getting companies to reemploy older workers. But productivity will be a factor at that age, physically, there are limits. Experience counts you have a segment of very experienced older workers who can come in as mentors, as consultants, sure but even then, they are competing with younger foreigners, younger Singaporeans who are cheaper. The percentage of Singaporeans in the job market with a degree has gone up, so realistically, where are all these super-specialised retirees going to be? Not into services and thats an area in desperate need of workers. Walter: Theyre not going to be on the production line either. So youre saying that even if older workers worked for more years, youre still short of people at the baseline the blue-collar jobs? Walter: Right.

ECONOMIC DILEMMAS
So what do we mean by selectively? Walter: The Government should know where the country is going and what sector you see the growth prospects in, and focus on bringing in people where there is a lack in that area. If there isnt a lack, dont approve visas. Marc: Listen to the companies. Listen to the SMEs, the companies crying out for help because theres such a shortage of manpower. SMEs are already experiencing problems with the restrictions on foreign hiring. MNCs also may move out of Singapore, if there are not enough workers here to support their operations. A large portion of our manufacturing, construction and so on is based on a transient workforce Walter: Right, but the main reason for this is the economic approach: Maximise profits, minimise expenses, satisfy shareholders. It means keeping wages low, getting cheaper people in. But companies pay big wages for foreign CEOs. Where do Singaporeans fit it? If the be-all and end-all is a corpo-

One argument is that the transient or non-resident workforce provides a buffer, a workforce that we can shed in a recession. This flexibility has helped manufacturers in the past. Hairul: Its worked in the past, but I dont know if it will be the safeguard that it always has been. Just going back to my experience in Doha when things were starting to go downhill, you could see cars being dumped at the airport with people just abandoning them and flying out. My colleagues and I finished our project there and left just before it went totally downhill. I dont think we are the only country to try to use this tactic. But it may

Yes, they are getting companies to reemploy older workers. But productivity will be a factor at that age, physically, there are limits ... The percentage of Singaporeans in the job market with a degree has gone up, so realistically, where are all these super-specialised retirees going to be? Not into services and thats an area in desperate need of workers.
Mr Marc Das

The other way is to restructure jobs with improved technologies so older workers can do certain forms of work. Marc: Sure, but when you get technologies, thats also going to lead to higher redundancies. When you spend on technology you do it so you can reduce overall manpower and business cost, to improve profitability. So if the first two approaches arent enough, is the third foreign workers then more important? Marc: Population problems will continue for a long time to come if our birth rate does not increase. So what do we do? Wait for birth rate to catch up or pump more immigrants into the population in the meantime?

CAN WE ACCOMMODATE 6.5 Million OR MORE?

Its been assessed that Singapore has enough land to support a population of 6.5 million. Not a target, but a planning parameter. Do you feel we can accommodate this figure? Marc: Lets project for 20 years after we hit six million. How much can our land size and infrastructure accommodate then? We need to look at Hong Kong, parts of South America, all super-high density countries, much higher than us. Were going to hit Hong Kong standards soon. So when weve hit six million or so, what do we do then? Do we say stop? Hairul: Will it be too late then? Will we reach a tipping point? Its hard to project. Will we have enough roads, public transport, houses? Marc: Maybe Singaporeans then will pack up and leave because its too crowded? Itll really depend on what kinds of policies are made ... The older I get, the more I like li ving in Singapore. Im amazed by the things weve done. Its a great place to live, work and play, but its a question of how much of my own space there will be and develop the lifestyle I want.

Do good jobs created by foreign direct investment go to locals?

CASE: THE BIOMEDICAL INDUSTRY Foreigners were needed to kick-start the sector, as there was little local expertise. In 2001, 1 in 5 professional managerial executive (PME) positions were held by locals. Today, 1 in 3 of the PME positions are held by locals, in a much larger sector. Singapore is now home to more than 50 commercial-scale manufacturing facilities by leading pharmaceutical, biotechnology and medical technology companies, employing nearly 14,000.

In 2011, more than 75 per cent of PMET jobs went to locals. Investments brought in between 2002 and 2011 would have created 167,300 skilled jobs once projects are fully implemented; most will go to locals. More than 7 in 10 skilled jobs in the manufacturing sector are filled by locals

Far more Singaporeans will be seeking PMET jobs, in 18 years time ...
8000
SourceS: MTI estimates, mom

how do taxes paid by foreigners benefit singaporeans?

Benefits given to low-income Singaporeans over the last five years, through measures such as Workfare, housing grants and healthcare and education subsidies (net GST that they pay) amounted to more than 20 per cent of their incomes. Extrapolated over a lifetime, it means that for every S$1 a low-income household pays in taxes, they get back more than S$4 in benefits.

Their tax contributions increase the fiscal resources for Government to meet various public expenditure needs, including social programmes and transfers. In the future, foreigners can help shoulder the tax burden on younger working Singaporeans, when due to the shrinking citizen population, there would be fewer working adult residents to support a larger elderly segment.

tax input

PRs and non-residents contribute about 50 per cent of total personal income taxes They also add to our GST tax base

Marc: Catch 22. How about creating something between PR and citizenship? Long-term visa, 20 years. After that decide and renew. See if we have more babies and see how. (Laughter) Walter: I think if we continue to take this wait-and-see we will never be able to shift the birth rate. We have to take a hard stance. Hairul: I dont think bringing in immigrants is going to necessarily boost the population. You have more people, but its totally different from having a sustainable population long-term.

400

PME

TAP

NonPMET

PME

TAP

NonPMET

2011

2030

As the education profile of Singaporeans changes, there will be a need to create more PMET jobs to meet their aspirations as well as an increased need for less-skilled foreign manpower to fill the shortfall and meet growing demand in the healthcare and social services sectors.
PME = Professionals, managers, executives, TAP = technicians and associate professionals

Source: Budget 2012 round-up speech

Art Yen Yok