Singapore's Economic Model – the fallacy of “growth at all costs” – Part 2

by Rajiv Chaudhry

 

What happens when population grows exponentially?

If Singapore continues to grow at even half the pace it has in the past, its economy in 20 years’ time will be worth over $400 billioni, even if the current crisis wipes 20% off the 2008 GDP figure. This will place it in the same league as the one now occupied by the UAE, Thailand, Ireland, Finland and South Africaii, currently ranked between numbers 36 and 32 in the IMF’s list of the world’s largest economies. All these countries have vastly larger land masses than Singapore.

To sustain an economy of that size, the population will need to be at least between 7 and 8 millioniii, possibly larger. The long-term population planning parameter of 6.5 million mentioned by the Minister of National Development, Mr Mah Bow Tan last yeariv would therefore appear to be an underestimated figure. Since the government has acknowledged that citizens are not replacing themselves, let alone contributing to an increase in the workforce, the extra workers needed to support an economy of that size will have to come from one source: imports.

To house these extra numbers, housing density will rise. Fifty to 60-storey HDB blocks will become common; private apartments will become smaller and the government will actively explore the use of subterranean space for daily activities. The children of these new immigrants will need to go to school, so more schools will have to be built; they will fall sick so more hospitals will be needed. There will be pressure on restaurants, stores, libraries and indeed, every type of facility and public resource.

The Minister for National Development also mentioned in a speech in 2007v that by 2015 Singapore aims to double the number of annual visitor arrivals to 17 million (2008 visitor arrivals numbered 10.1 million), so some 30,000 more hotel rooms will need to be added to the current total of just over 39,000 roomsvi.

Singapore will turn into a rabbit warren with underground hutches.

Our roads, already strained and carrying the world’s most expensive cars, will become even more congested. We will become accustomed to seeing the kind of gridlock we thought occurred only in Bangkok, Jakarta, Taipei and Kuala Lumpur.

Shopping centres will become crowded, with people jostling for service. Keeping them litter-free will be a major task.

Public transport will see the kind of rush-hour traffic we thought occurred only in Tokyo, London and New York.

As for greenery, the government has already bulldozed most of the primary and secondary jungle on the island, including the large mangrove forest in Punggolvii. It is only thanks to the foresight of 19th century colonial administrators that we have the central catchments with the last remnants of primary Malayan forests on this island.

So Singapore, already the second most densely populated country in the worldviii will become even more densely built upon. Its roads, occupying some 12%ix of its surface area and approaching the 15% occupied by housing, cannot be expanded by much more. Highways and other facilities will be built underground instead.

Most damaging of all, the social fabric of this country will be stretched to the limit. In 20 years, the pool of citizens will probably rise to about 3.5 million. Singaporeans will then comprise some 45-50% of the population or roughly one in two persons here will be a foreigner. (For the purposes of this article, I use the word ‘citizens’ to refer mainly to those born in Singapore).

Singapore has always been an immigrant society. However, between 1819 and 1965 or in 146 years its population rose from less than 10,000x to 1.88 million. Immigrants of all descriptions – Europeans, Indian, Arab, Malay, Javanese and Chinese – were absorbed into the social fabric. Note, the average rate of immigration during this period was about 13,000 persons per year.

We are now talking about a completely different order of immigrationxi, which is seeing a wholesale influx of people whose value systems and language are, arguably, sufficiently different from those of Singaporeans to give rise to tensions and strains in society. It is one thing to absorb people “in small doses” where the new immigrants are given time to assimilate into the host country. It is quite another to throw open the doors to a large inflow of people. Where such large-scale immigrations have taken place, eg in Germany under their “Guest-Worker” programme (resulting in some three million Turks settling in the country see here  ), social problems have been created that remain unresolved to this day.

Singapore would do well to review its policies with a hard-headed look at what has happened in other countries supporting rapid population growth through immigration.

TO BE CONTINUED

Read part one of this article here

 

See also: Singapore’s Great Population Leap  (link

i GDP in 2008 was $257 b; a 20% deflation will reduce the economy to a size of about $200 b. Since the economy grew 4 times between 1990 and 2008, it is reasonable to assume a larger economy will grow at a slower pace. Even if it only doubles in size over the next 20 years, Singapore will have a $400 b economy.

 

If the crisis had not taken place, the 2008 GDP would have doubled to over $500 b in 20 years time, assuming the same pace of growth.

iiIMF’s 2008 list of world GDP rankings – 

iii Hong Kong with a population of 7 million has a GDP of $310 billion. (NB 90% of Hong Kong’s GDP is accounted for by the service sector. If manufacturing had a higher share, an even larger population would be needed to support it).

Singapore’s projected GDP of $400 b would need at least a one-third larger population to supprt it than Hong Kong’s current population.

iv http://www.mnd.gov.sg/ search by population policy or Master Plan 2008

vii  It is ironic that, having destroyed nature’s work, the Ministry of National Development is now spending millions to create artificial ‘wetlands’ in the new Punggol and Serangoon reservoirs to attract water and migratory birds

viii http://en.wikipedia.org/wiki/List_of_countries_by_population_density – Monaco is the most densely populated country followed by Singapore. Hong Kong ranks third.

ixLTA Land Transport Master Plan at http://www.lta.gov.sg/ltmp/LTMP.html page 20 item 2.1.1

xSingapore – A Pictorial History by Gretchen Liu (Link)

xi Between 1990 to 2008 alone, the population increased by 1.84 million people