SINGAPORE — In a recent address to Parliament, Deputy Prime Minister Lawrence Wong stressed that economic growth remains a “non-negotiable” priority for Singapore, despite the country’s efforts to become a more inclusive society.
Speaking at the debate of the President’s speech, DPM Wong argued that as the labour force and economy are expected to grow more slowly in the years ahead, competitiveness will become increasingly important.
He added that Singapore will also ensure that government programs achieve better outcomes for Singaporeans, in terms of the value they achieve from every dollar spent.
Since our focus is on economic growth & competitiveness – let’s look at the outcomes for Singapore and Singaporeans.
In 1966, there were only 59,000 non-citizens on work permits, comprising 10.7% of the total workforce of 550,000.
It is believed that the influx of foreign workers began around 1997, such that by June 2014, there were 1.3 million foreign workers and an estimated 320,000 permanent resident (PRs) workers, making a total non-citizen workforce of about 1.65 million, or about 48% of the total workforce of 3.5 million.
If new citizens are accounted for, then perhaps more than half the workforce may already be non-citizens.
Moving on to today, it is estimated based on data in 2022 that the non-native Singaporeans in the total workforce (excluding Migrant Domestic Workers) was 51.4%, with 31.9% foreigners, 11.6% PRs, 7.3% of those who are not born in Singapore, and 0.6% “born in Singapore not as citizens”.
Moreover, Singapore has experienced one of the slowest rates of economic growth in ASEAN, even before the Covid-19 pandemic hit.
In 2019, the country’s growth rate was one of the lowest in the region. Despite this, the government has continued to emphasize the importance of economic growth, at times seemingly at the expense of the well-being of Singaporeans.
It is important to note that the pandemic has had a significant impact on the global economy, and Singapore has not been immune to this.
However, the country’s struggles with economic growth are not new. Even before the pandemic, there were concerns about the impact of Singapore’s heavy reliance on foreign workers, as well as the high cost of living and stagnating wages for many Singaporeans.
In the eight years since the Singaporean government took office in 1959, annual GDP growth surged forward at a rate of 6% to 9%, according to an article in the Straits Times dated 9 August 1967.
Using data from the Department of Statistics, the GDP growth rate for the first six years from 1960 to 1966 was computed to be 6.6% per annum. From 1966 to 1997, before the influx of foreign workers, GDP growth was 9% per annum. From 1997 to 2013, after the influx of foreign workers, GDP growth was 5.2% per annum.
It is possible that the large influx of foreign workers may have resulted in relatively lower economic growth rates as compared to earlier periods.
Therefore, it is worth considering whether the past and continuing rhetoric that Singapore needs more foreign talent to ensure economic growth still holds water or makes sense.
For example, other countries like the Nordic countries may have arguably managed to derive good economic and social development without resorting to having a huge influx of foreigners.
Fast forward to now, and it may arguably be even more difficult for Singapore to achieve strong economic growth going forward, given the challenges posed by the pandemic and the country’s heavy reliance on foreign workers.
According to statistics, six out of eight occupational categories in Singapore have hardly seen any real increase in pay over the last 21 years.
For example, Craftsmen & Related Trades workers have experienced a negative -0.2% p.a. real decrease in income, while Retail Service & Sales workers have seen a negative -0.08% p.a. real decrease in minimum income. Even for full-time employed Non-PMETs, the real income increase has only been 0.7% p.a. over the last 21 years.
To address these issues, the government may need to consider more innovative and sustainable approaches to economic development, such as investing in education and training for Singaporeans, promoting entrepreneurship and innovation, and supporting small and medium-sized enterprises.
At the same time, it is important for the government to ensure that Singaporeans are not left behind as the economy evolves and that they are able to benefit from the opportunities created by economic growth.
This may require a more proactive approach to social welfare and income redistribution, as well as greater investment in affordable housing, healthcare, and education.
Ultimately, Singapore’s economic success will depend not only on its ability to remain competitive but also on its ability to create a more inclusive and sustainable society that meets the needs of all its citizens.
