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Economy

Smart population policy holds key to Singapore's growth

Opening country to immigrants is credited with maintaining a dynamic economy

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A residential area forested with condominiums in Singapore; The city-state has accepted a large number of immigrants.   © Reuters

SINGAPORE -- Singapore knows the power of people. As well as being home to some 30,000 newborns annually, the city-state naturalizes another 20,000, said Singaporean Prime Minister Lee Hsien Loong in a welcoming ceremony for new citizens on May 27, stressing the importance of population policy.

The total fertility rate in Singapore is 1.20 in 2016, much lower than the 2.10 or so necessary for a country to increase its population. Still, the city-state's population continues to grow while Japan, with a higher fertility rate at 1.44, sees its steadily dwindle.

Singapore's population has been increasing since its foundation as a country in 1965, experiencing declines only in 1986 and 2003. The number of citizens decreased only once in 2003 after 1990, the year data began to be released annually. Behind this rising population lies the many immigrants and new citizens the country accepts each year.

Numbers count

Singapore opens its doors to a diverse range of people. There are 1.67 million nonresidents in the country, classified as foreigners working, living or studying there for a set period of time. These account for 30% of the population, of which 44% hold work permits for jobs in construction and other fields that are difficult to fill only with locals.

In addition, 11% of nonresidents are comprised of S Pass working visa holders -- employees at manufacturers, retailers and other businesses. Another 11% hold Employment Pass visas, which are reserved for executives, managers and other skilled professionals.

The characteristic feature of Singapore immigration policy is balance: The nation accepts all kinds of foreign workers according to local needs. Workers range from unskilled laborers to intellectuals. The policy also involves granting permanent residency when applicable.

Singapore promotes population growth because it recognizes that improved productivity alone will not sustain the economy. In its "On Population and Economy" paper, the Ministry of Trade and Industry attributed growth in gross domestic product to a larger workforce and improved productivity. It concluded that bolstering labor with immigrants and other foreign manpower is necessary to prevent a future decline in the nation's workforce.

As Singapore begins dealing with the economic strains of an aging society, it recognizes the need to welcome foreign nationals to maintain the ideal population.

Not all smiles and hugs

But the massive inflow of foreign workers is not without problems. "A Sustainable population for a Dynamic Singapore Population White Paper" released by the government in January 2013 projected an increase in the population to between 6.5 million and 6.9 million by 2030. This drew a strong negative response from a public concerned about possible loss of jobs and congested mass transit, resulting in one of the largest protest movements the country has ever seen.

This forced the government to refine its message, stressing that the figure was not a target but a projection. It refrained from further publicizing the contentious paper. But despite public concern, the government seems undeterred about pursuing its current policy, realizing that a continuous increase in population is indispensable for economic growth and stability.

Given Singapore's tiny size, the population increase "projection" is the subject of numerous studies regarding housing, transportation, water and other natural resources. In short, population policy is not just economic policy, but one that affects social policy as well as politics.

Singapore's real GDP grew 2.7% in the January-March period from a year earlier. Despite being repeatedly threatened with stagnation, the small country has kept growing.

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