Population growth: Losing the debate with an unsubstantiated case

By Gordon Lee

Recent days have seen much scaremongering by politicians, businesses and the mainstream media about perils of calling bluff on the Government’s Population White Paper.

But with the best of efforts to assuage the growing sense of apprehension over the targeted 30% increase (unless the Government has completely no control over the population, population projections equates population targets – any claim otherwise is superfluous), the Government is clearly losing the debate.

This is no surprise considering the economic evidence against them, and the fact that the Government has offered no support for their position. Such were the views held not just by a few sensible Members of Parliament, but also by experts like Donald Low, a senior fellow at the LKY School of Public Policy and a former top civil servant.

The burden of proof

In an earlier article, I have reviewed the economic literature surrounding an ageing population.

In short, the evidence from around world suggests that an ageing population does not have any significant detrimental socio-economic effects. Some studies suggest manageable consequences, others suggest potential benefits.

Since my last article, several readers have commented that these international studies may not apply to Singapore. I believe that Singapore is subject to same laws of economics, and that its circumstances are not extraordinary. But, this is not important.

Since I was born in the late 1980s, the population has already increased 70%. If the Government wishes to grow the population by another 30% by 2030, the burden of proof should lie upon the Government to justify its drastic population policies.

Failure of governance

Unfortunately, the Government has failed to justify their drastic measures by making the following case, that

1) the effects of an ageing population are dire, and

2) their policies are sustainable and appropriate.

Donald Low, a senior fellow at the LKY School of Public Policy and a former top civil servant, has also criticised the Government’s amateurish approach and said that there “wasn’t even a References section to show what research the writers of the paper had done, what social science theories they relied on, what competing theories/frameworks they looked at… There was also a surprising lack of rigorous comparison with other countries that have gone through, or are going through, a similar demographic transition.” [1]

Diagnosing the disease

The lack of academic rigour in Government policy is indeed endemic, and is a legacy of the “Government-knows-best” approach typical of authoritarian regimes.

This Government continues to consider it legitimate to peddle assertions without attempting justification, to claim economic literacy without academic backing, and to dictate measures without genuine consultation.

To that end, the Government has maintained a monopoly over vital information that would expose itself to democratic scrutiny [2], and sterilised the political culture of “needless” evidence-based policy making.

This is a huge disservice to the principles of public debate, democracy and governance.

Scaremongering

How very kind then of the media to “contribute” to the debate with scaremongering tactics in the form of headlines like “Several foreign firms prepare to leave Singapore” – Business Times

(SPH). [3]

It is obvious why the Government and businesses would like an ever-growing population. As The Economist explained, “Governments hate the idea of a shrinking population because the absolute size of GDP matters for great-power status… Companies worry, too: they do not like the idea of their domestic markets shrinking. People should not mind, though. What matters for economic welfare is GDP per person.” [4]

Economic realities

There is no cause for concern, much less alarm.

In the face of economic competition, uncompetitive companies have always had to reinvent themselves or leave the market. There is no tear to be shed for the least productive and the most labour-intensive companies leaving the market. That is the nature of economic competition which leads to a more productive economy. In Singapore, the ready availability of labour had provided little incentive for businesses to invest in improving their pathetic record of labour productivity.

Indeed, the Ministry of Manpower has acknowledged this fact. “Productivity gains have declined in recent years due to heavier reliance on labour inputs to generate economic growth, especially inputs of foreign manpower.” [5]

Also, businesses had initially expected a rate of growth in the labour force to be higher than currently projected in the White Paper. As businesses make plans years in advance, they have had to now reassess their capacities and scale them down in light of new information. There is no reason to think that there will be any increase in unemployment.

Inadequate case for unsustainable population growth

Crucially, the dubious economic model used by the Government to justify ever-increasing population is unsustainable. This is a reality that the Government has to, sooner rather than later, accept.

Not that this is a bitter pill to swallow. Evidence from around the world suggests that the

Government is wrong to assert (baselessly) that an ageing population has any significant detrimental socio-economic effects. [6]

Unless the Government is able to satisfactorily discharge its burden of proof, it should abandon its madcap policies (which are unsupported by facts) and aim for population stabilisation whilst researching the literature and evidence surrounding demographic policies.