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Population growth is therefore the most critical support policy the Government implemented to ensure the success of its land-dividend extraction strategy.

 

Hence, even though Singapore has built more MRT lines and the island is full of malls over the past two decades, both the trains and the malls are brimming with human traffic. Singapore’s population continued to grow despite the fact that economic growth was slowing down from an average of 8% in the past to the current 1% - 2% even in good years. In short, the economy is now achieving low-quality slow growth by increasing numbers.

 

Moreover, it also means that with more mega-development projects and new MRT lines in the pipeline, Singapore will need to further increase its population in the coming decades.

 

In 2013, the Government’s Population White Paper ‘projected’ that, by 2030, Singapore’s population would increase by about another 2 million to 6.9 million. In unofficial channels, there was chattering that Singapore could comfortably house 10 million. There were even talks, in closed-door discussions, about Singapore’s ability to accommodate 20 million by increasing the intensity of housing its resident through innovative architectural designs.

 

The low total fertility rate (TFR) has often been cited as the reason for the need to increase population. But even though our population has doubled over the past decades, our primary schools are closing, secondary schools as well as junior colleges are merging, polytechnics are streamlining their programmes while the army also sees a declining intake of new recruits. Meanwhile, our TFR has fallen to an historic low of 1.14 in 2018. The increase in migrant population has not resulted in higher fertility rate or stopped the trend of ageing population.

 

In other words, we are not bringing in the right people to address the problem of ageing population as claimed by the Government. Over the next 2 – 3 decades, the new residents today will also age and the future government will be faced with an even bigger fiscal burden of taking care of a bigger ageing population. The current Government is basically generating wealth today at the expense of future generations.

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Singapore’s Scheme of “Ponzi Demography”

The truth is that the increase in population is more to facilitate the extraction of land dividend. The bigger population helps to provide the needed traffic volume for the MRT network and the malls; to fill up job vacancies in the low value-add labour intensive domestic services sector; and to depress wages in the lower and middle rungs.

 

In the end, the rising rentals and land costs amid stagnating wages and declining business profitability mean that the economic pie has been re-sliced to benefit the Government (i.e. as land, capital and business owner) and the REITs (i.e. as capital owners) at the expense of SMEs and workers. 

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Today, Singapore not only has a burgeoning gig economy but is also one of the few developed countries without a minimum wage because of the absence of an independent union movement. Meanwhile, prices are surging, public services standards are slipping and infrastructure is buckling under the strain of overcrowding.

 

Singapore is ranked as the most liveable city for Asian expats according to a survey by human resources consultancy ECA International.[2] But for the masses in general, Singapore is only the 40th most liveable city in the world, even behind Hong Kong (Note though that the 2019 index overlooked the recent political unrest there) according to Economist Intelligence Unit’s 2019 Global Liveability Index.[3] Tellingly, other studies also reveal equally less appealing non-material wellbeing of living in Singapore. The Cities for the Best Work-Life Balance 2019 study, for example, ranks Singapore as the second most overworked city. The 2018 World Happiness Report, on the other hand, ranked the city-state 34th in happiness level.

 

Former United Nations demographer, Joseph Chamie, calls Singapore’s population policy “Ponzi demography” which posits that what governments do with having more and more people is the human equivalent of what Bernard Madoff did with money:[4]

 

“The human-pyramid scheme works like this: Population growth, either through births or immigration, boosts demand for goods and services, increases borrowing, boosts tax revenue and adds to corporate profits. Everything seems grand and leaders take a bow. It’s a bubble, though, and it eventually bursts when population growth stalls. Incomes top out, high debt crushes consumption and investment, the need for public assistance rises, environmental degradation increases and angry people take to the streets. As households are left to pick up the tab once Ponzi demography runs its course, government leaders issue dire warnings about economic decline if the flow of fresh talent stops.”

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This is not unique to Singapore. It is a sad story that is happening all around the world particularly in countries (particularly in Hong Kong) where inequality is high because of systemic rent-seeking that benefits capital and asset owners disproportionately. The only difference in the case of Singapore is that the rent-seeker is the Government, who is not only the policymaker and regulator but also the biggest capital and business owner.

 

Again, the question is that if the rent-seeker is the Government, who then is to keep the Government in check?

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REFERENCES

[1] Bobby Jayaraman. (2012). "Building wealth through REITs." Marshall Cavendish. Note: This writing on REITs market development summarizes Bobby Jayaraman's informative and insightful writing on the topic. Pg 76

[2] See Straits Times (2019). “Singapore again tops ranking of most liveable city for Asian expats, Hong Kong slides lower.” 29 January 2019.

[3] See Straits Times (2019). “Singapore slips to 40th most liveable city, behind Hong Kong.” 4 September 2019.

[4] See William Pesek. (2013). “Singapore’s Population Bubble.” Bloomberg. 14 February, 2013.