Singapore demographic projections and what it means for the economy

Singapore demographic projections and what it means for the economy

The trajectory of Singapore’s population size and demographics can be derive from its progression through various transitions of high birth rate and death rates during the post-war period to very low birth and death rates in the recent years. All this is within the context of rapid economic and social development that has been in effect in the last five decades.

Population planning is integral for any government with the aim of strategic development and balancing the population for better and highly skilled with social considerations such as foreign workers. Singapore progression through some demographic phases occurred against a backdrop of spontaneous economic and social development, shifting from a young and rapidly growing population with high levels of unemployment to a population that is aging. Hence quickly necessitating imported labor. Such demography has a social-economic effect and has happened within a lifetime of one single generation. In 1965, Singapore had an unemployment rate of 14%. GDP per capita was less than USD 2,700 with half the population being illiterate. The fertility rate was 4.6 births per woman.

Decades later Singapore has over 900,000 baby boomers. This brings an unprecedented shift of age between 2015 and 2030. By 2020 the number of working-age citizens will decline with older Singaporeans retiring outnumbering. The younger ones entering the job market to replace them. As a country with a low birth rate, the majority of the citizens will age with no one to replace them by 2025 unless there are new immigrants.

The government has set out key consideration and strategies for Singapore’s population in a bid to address this critical demographic challenge. Such policies include maintaining a healthy Singaporean core population; regulate immigrants and permanent residents, creating jobs and opportunity for the native and building high-quality living environment which will strengthen Singapore identity.

The three pillars

Singaporeans themselves form the core of the country society and heart of the nation. To be a strong and a cohesive society, Singapore must be a strong core.

Families form the basic fabrics of any society. It’s where values and sense of belonging is passing from one generation to the other. Singapore has diverse geographic and ethnic backgrounds, but as a country, it shares certain key values and aspiration including a fair and justice society for one another.

The population and workforce must support the dynamic economy which continues to create jobs and opportunities for Singaporeans to materialize their dreams. The Singaporean workforce is progressing to become a better regarding level of education and skills. The pre-existing low-level workers upgrade themselves though vocation education and training. By 2030, Singapore workforce in Professional, managerial, executive and technical jobs is expected to rise by approximately 50% summing to 1.25 million compared to the current figure 850,000. The number of non-PMET is projected to fall by more than 20% to 650,000 compared to the current figure 850,000. In general, two-thirds of Singaporeans will hold more professional jobs in 2030 compared to the half-figures today.

Job creation demands a dynamic economy and business to produce more goods and services to the benefit of Singaporean, Asia and the world. Taking into consideration the competitive market, Singapore needs to continue delivering high-end products and services that other countries are yet to produce. This is only possible if the workforce has a full range of skill, background and natural experience that can jump-start high value ended sectors.

Foreign Workers

Allowing foreign workers create a balance between skilled and less skilled workers in the overall workforce. Foreign workers will not only help to provide the low skilled labor force.  But they will help ensure healthcare and domestic services to support the aging population and assist working families. They build infrastructure and housing, do conservancy and maintenance work.

Many Asian cities are modernizing at a fast rate. To continue being the pacesetter, Singapore ought to keep development projects and upgrade critical nodes where more jobs opportunities can be created. However, the issue of immigrant remains delicate taking into consideration the limited resources that Singapore possesses. An overwhelming number of foreign workers will push the total population to a number that the land cannot accommodate. Such population has effects on the economy; depressing wages and reducing the incentives.

Beyond 2020, the number of the workforce will deep at a rate of 1% per year. This is because a more prominent part of the population will be aging. There is two option on mitigating a low labor force for such a demographic. Singapore can either increase the number of foreigners. Or invest in more innovative measures to increase the productivity of companies by using machines. Both the two methods are important. However, they need to complement each other to ensure the economy will not stagnate due to the demographic shift.

Beyond 2020, Singapore is projected to enjoy its pleasant prospect. The GDP might grow at a rate of between 2% to 3%. Such growth will be experience if other factors such as external environment, productivity levels, and workforce growth are strategically integrate.

High-quality living environment

Singapore’s 700km2 land is home to approximately 5.6 million people. To make the country more habitable strategic plans in development is mandatory. The infrastructure must meet the need of the changing population and growing economy. All this must be done while preserving and enhancing the green environment.

Singapore has one of the most developed real-estate economies. Its infrastructure is top-notch with urban spaces offering convenient access to social amenities, transport, and services nodes. As part of the plan to accommodate the rising population the rail network is planned to expand to a total length of 280 km by 2021.

New technology and innovative solutions will help optimize the already scarce land. The National Research Foundation has allocated USD 153 for research and development of land with the focus on cost-effectively creating new space. Planning infrastructure in prior and implementing the projects in a timely and efficient way will help overcome current congestion and even accommodate a higher population.

 


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