by Yeoh Lam Keong
“Dr Liu said his idea of the population increasing from the current 5.6 million to 10 million in less than a hundred years was a low estimate of the growth rate.
While the Government has been taking steps to curb population growth, he said: “You cannot stop population growth, because as long as your economy is booming and you create new jobs, you need new population.”
Keynes said that “practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
Nowhere is this more evident than in Dr Liu Thai Ker’s above remarks.
The problem here is that with all due respect, while Dr Liu is an extremely competent and highly regarded town planner, he is effectively recommending very poor, outdated economic policy indeed. He is still implicitly stuck in the defunct “go for growth” strategy which the government has long realized was a mistake since their Economic Strategies Committee led by Deputy Prime Minister Tharman in 2010.
Between 1990 -2010, however, twenty years of this “go for growth” strategy has left us with a bloated, inefficient, excessively labour- intensive and low productivity economy that has depressed wages for the working class, created massive working poverty, and boosted the population to an uncomfortable 5.6 mn that could easily swell to double that if labor force growth is not scrupulously controlled well below 1% pa long term.
Germany for example, grew its labour force and population at less than 0.5% pa over the last few decades and remains the most competitive and dynamic high value-added export economy in the world!
Doing the same for the next few decades will leave Singapore with a population well below 6.9 million ( a goal enunciated by the Prime Minister ) and not anywhere near an awful 10 million population. And the former with higher productivity and real wages, less extreme wealth and income inequality and a much, much smaller and more assimilable new foreign population.
What we need is high quality, not poor quality, high quantity growth. The latter is the way towards an unbearably crowded, extremely stratified, xenophobic and socially divided Dubai-type society; very far cry from a Swiss-style standard of living that a productivity-led, relatively population-light strategy like Germany or Switzerland’s can alternatively provide.
Citizen well being, not growth numbers, greater profits, more billionaires or tall fancy buildings should be the true test and ultimate goal of long term population policy and urban planning. Let’s not forget that we are not just a city state but, much more importantly, a nation state as well.
Mr Yeoh is the former GIC chief economist and had written the above post in his Facebook page. Reproduced with permission.