Singapore Population White Paper 2013: Part 2

Key questions addressed in this article:

  • Comparison of Singapore with other major financial centres

This is Part 2 of the article to discuss the Singapore Population White Paper. The first part of the article can be read here.

As I was researching for this article, I came across many other readings and information. It would be difficult to write a concise article to discuss the population dynamics and planning for Singapore, because there are many other considerations you would need to consider.

First, you would need to understand the evolution of cities and city states in the world. You would also need to understand urban planning and what it entails. When looking at the urban and population planning of Singapore, you would also need to look at the larger cyclical and global fluctuations and estimations, that will affect how Singapore will change with it.

In this article, I will not have a defining conclusion on the optimal size of Singapore, as I am as yet unable to come to a conclusion. However, I will highlight other information and statistics which will allow us to have a broader picture as to the planning behind the population size of Singapore.

Do you still remember Minister’s K Shanmugam’s infamous remark that for Singapore, “We are a city. We are not a country.” I know many Singaporeans will be up in arms with this statement.

How Many People Do We Need?

But let me try to explain how we need to look at this. The current population in Singapore is about the same size as that of Norway. However, Norway is more than 500 times larger than Singapore. Granted that a large part of Norway is mountainous and will be difficult to inhabit, if we want to make do with a more measured pace of life, it would be easier to do so in Norway, with the expansive land mass and more natural resources.

As of this point, Singaporeans need to imagine – if we want to sustain a population of perhaps about 3 million people in Singapore, what should we expect of Singapore? We need to ask ourselves a few questions:

  • If there is a smaller population, will economic production decrease? Will our GDP growth decrease? Will Singapore’s economy shrink?
  • If there is a smaller population and there is an increasing number of older Singaporeans, will we have a sufficient proportion of working Singaporeans to drive the productivity in Singapore? Will there be a higher proportion of older Singaporeans, and will there be enough younger workers to grow the economy (noting that by 2050, I will also become one of the older Singaporeans)?
  • If Singapore’s economy shrink, will we still be an important financial centre in the world? If we are no longer one of the top financial centres in the world, can our economy still be sustained?
  • If Singapore’s economy shrink, how many people can Singapore comfortably sustain?

Of course, no one is saying let’s aim for 3 million people. Perhaps, at this point, Singaporeans feel the squeeze of the current population, because at 5 million, the transport system is packed to the brim and walking along Orchard Road feels like weaving through a maze on a weekend. Then, the question is – is it bad planning? Is it because transportation wasn’t built fast enough to match the pace of population growth? Or was it because our decentralisation efforts aren’t as successful to decentralise populations from the city centre? At this point, it would be a mix of both. On one hand, there was inadequate planning, which resulted in felt overpopulation. Also, Singaporeans might feel that the island is unable to barely cope with 5 million people, so even thinking about having 6 or 7 million is out of the question.

But, why do I say, it’s actually not too far fetch to have to think of ourselves as a city, and not (just) as a country. You see, when we talk about a country, we would usually have imaginations of our ties and affiliation to Singapore, and how we are rooted in a ‘Singaporean’ culture. In any country, it feels important to be part of the culture of your country. For example, if you are from Peru, being part of this Peruvian culture allows you to feel grounded as part of a community. The larger issue is also this – being part of a country gives you rootedness and a sense of security. Knowing that you are part of a country means you have an identify – an official identity as a citizen that legitimises your stay in the land. If you are told you are part of a city, and not a country, it feels transient. You start questioning that if I am only a city-dweller, how long will I get to stay in a city? Do I have an affiliation to this “city” and will I be asked to leave once my economic necessity runs its course? Effectively, when I grow old, can I still stay in the city? This is really what we are protecting when we want to protect the idea that Singapore is a country, and not a city – we want stability and security.

But, if I may, when we live in a country-city such as Singapore, it is important that Singaporeans wear two hats when we understand Singapore. First, we are a micro-citizen in the country of Singapore, and we have our daily concerns and needs. But from a larger perspective, we need to understand Singapore’s role as a city in the global economy. Do you know why there is a constant worry by our people on whether they will still have a place in Singapore when they grow old? It’s because we are reacting to the knowledge that we are also a city and how transient it is. In a way, it can be quite bipolar living in Singapore, and it is something Singaporeans need to learn to grasp with.

The very interesting thing is that the current debate about our population policies has shone light onto how pertinent it is that we need to start wearing dual hats.

You see, right now, many of us are ups in arms – we are angry that the government wants to increase the population when on a personal level, we feel that our daily well-being feels compromised. Which brings us back to the questions that I had posed. What is the size of the economy that we are comfortable with? What is the level of economic growth that we want? Essentially, what do we want? I am asking this because if we do not know what we want, we cannot work backwards. Say, if you want a better standard of living for example, what exactly does it entail? Less crowded areas? Higher incomes? Shorter working hours? You need to know this, so that we can work backwards. Can we have higher incomes with lesser workers? Can we have less crowded areas with a continued high standard of living and income?

Asking this questions, and knowing essentially what we want is key to knowing how we need to specifically debate this issue.

Population Growth for Economic Growth?

I am going to pause here for now, and bring out some information and statistics that I have found, so that perhaps, we can try to understand this from a more informed perspective.

In a paper titled, “The research on the distinguishing features of the international financial centers” in the Journal of Applied Finance & Banking, the following features of a financial centre were distinguished:

Political vs economical stability The cost of making a business
The capacity of financial services market Competitive financial environment
The number of expertised workers The potential for creating a financial income
The availability for professional services A comparatively advantageous taxation system
The size of local market Appropriate politics for marketing
Large scaled markets The geographical position of the center
The prestige and profile of the center Regulative institutions responsible for organization
Activity of legal regulations High standards for international life style
An internationally normative legal environment The availability for reaching the supportive services
Easiness for building and governing a business in global scales Infrastructure for sufficient communication and transportation

Another paper by the Securities Industry Association highlighted the following “factors (which) contribute to the creation of a long-lived and reputable world-class financial.”

Open and fair financial markets

Free flow of capital and a convertible currency

Skilled workforce/flexible labor laws

Prevalent use of a globally familiar language

Fair, transparent, efficient legal and regulatory regime

Sound and fair tax regime

Implementation of international standards and best practices (IOSCO, BIS, etc.)

Low cost of doing business (minimal “redtape” and bureaucratic inertia, etc.)

High quality, reliable and appropriate physical infrastructure

Stable political and economic environment

If you take a look at the Singapore Population White Paper 2013, below are the key strategies to “create a sustainable population for a dynamic Singapore”:

Building good affordable homes
Becoming a city in a garden
Greater mobility with enhanced transport connectivity
Sustaining a vibrant economy with good jobs
Ensuring room for growth and a good living environment in the future

To sum it up – you can describe the strategy as one to boost our economy, population and infrastructure – 3 of the cornerstones of the strategy.

But why?

You have to understand that the reason for the Singapore Population White Paper is geared towards creating a dynamic workforce to maintain Singapore’s status as one of the top financial centres. Why do I say that? A huge population is essential to create a “large-scale market”, where there is a high number of “highly-skilled workers”. The strategy also involves strengthening the infrastructure because workers will come into Singapore, because of the ease and accessibility of movement around the city.

Well, all this we know.

Let me show you some other statistics. In the table below, you can see the rankings of the Global Financing Centres Index (GFCI), from 2007 onwards. I have included the top 25 cities and other selected Asian cities (Taipei, Bangkok and Jakarta).

 

GFCI 1

GFCI 2

GFCI 3

GFCI 4

GFCI 5

GFCI 9

GFCI 10

GFCI 11

GFCI 12

GFCI 12.5

London

1

1

1

1

1

1

1

1

1

1

New York

2

2

2

2

2

2

2

2

2

2

Hong Kong

3

3

3

4

4

3

3

3

3

3

Singapore

4

4

4

3

3

4

4

4

4

4

Seoul

43

42

51

48

53

16

11

9

6

5

Tokyo

9

10

9

7

16

5

6

5

7

6

Boston

14

12

11

11

9

12

12

11

11

7

Zurich

5

5

5

5

5

8

8

6

5

8

Geneva

10

7

7

6

6

9

13

14

9

9

Frankfurt

6

6

6

9

8

14

16

13

13

10

Toronto

12

13

15

12

11

10

10

10

10

11

Chicago

8

8

8

8

7

7

7

7

8

12

Vancouver

27

31

33

30

25

22

17

17

16

13

San Francisco

13

14

12

17

17

13

9

12

12

14

Sydney

7

9

10

10

16

10

15

16

15

15

WashingtonDC

20

18

20

22

21

17

14

15

14

16

Montreal

28

30

31

26

26

20

18

17

17

Calgary

28

23

18

Jersey

16

14

13

23

21

21

20

19

Kuala Lumpur

45

45

38

35

26

20

Shanghai

24

30

31

34

35

5

5

8

19

21

Melbourne

18

18

29

27

28

24

18

20

18

22

Paris

11

11

14

20

19

20

24

22

29

23

Vienna

35

35

43

42

42

43

42

34

36

24

Dubai

25

22

24

23

23

28

36

29

22

25

Taipei

41

19

23

27

41

47

Bangkok

50

61

57

59

57

61

Jakarta

63

65

62

71

67

For easier viewing, you can refer to the chart below, which features the top 20 cities, their rankings and their movement in the rankings.

Slide2

If you notice, Seoul (darkest blue) has jumped up in the rankings. Also, the Canadian cities, Vancouver (light blue), Montreal (darker blue) and Calgary (bluish-green) have also moved up the rankings faster.

In the chart below, I pulled up the rankings of selected Asian cities:

Slide3

Here, you can see that Kuala Lumpur (yellow-orange) has also moved up the rankings. Interestingly, Shanghai (orange) and Taipei (green) has fallen in the rankings.  Bangkok and Jakarta at the bottom have yet to make a significant impact.

Hong Kong and Singapore continue to remain at the 3rd and 4th positions as one of the world’s most important financial centres. But the other important information to take note of is this – if Seoul continues advancing, will this threaten Singapore’s position? Also, at the rate that Kuala Lumpur is advancing, does it pose as a threat to Singapore? If Singapore does not retain its 3rd or 4th position, what impact will there be?

Next, what if we look at the populations of cities in history?

City Populations through HistoryYou can see from the chart above, that no one city has remained at the top for more than a few centuries. In fact, after a while, some cities catch up and become the dominant cities, and during some time periods, also coincide with being the richest cities. What will Singapore’s fate be? Our government leaders have kept on the discourse that if Singapore is not well-governed, that we will disappear off the map. Will this happen, if our economic growth slows down?

What if you look at our GDP per capita? Singapore was the richest nation in the world in 2010. And it is projected that we will continue to be the richest nation in 2050.

GDP-Singapore

So far, I’ve kept harping on this, but the question is essentially this – do we need an increasing population to ensure that our economy will keep growing? How important is it for Singapore’s economy to keep growing and for us to stay as one of the leading financial centres in the world?

You see, the thing is Singapore is too small to influence the state of economics in the world. We can make ourselves a fixture in the world economy, but we nonetheless have to pander to capitalism. As long as there is capitalism, Singapore has to pander to its workings – we will need to grow our population, so that our economy will grow, so that our GDP will grow, so that we will continue being one of the key financial centres in the world.

So, essentially, the issue is this – capitalism. As long as Singapore panders to the capitalistic system, we will have no choice but to work by it. Then, back to the question above – can we take ourselves out of the system? Unfortunately, we are not Norway. If the Norwegians decide tomorrow that they want to live a subsistence life, and survive on a less competitive standard of living, they will fare much better than Singapore. Singapore does not have the luxury to do that. Once our economy does not do as well, we won’t have enough money to buy food to feed the 5 million people in Singapore, or the 3.5 million Singaporeans by the time the foreigners decide to leave. Singapore only has enough land to perhaps sustain 500,000 people if we want to have a subsistence living, or less.

Again, no one is saying – let’s start living a subsistence life. But you see, the issue of population cannot be seen in silo. There are larger implications. Do we need 7 million people? Well, the government thinks that in order for the economy to continue to be relevant in 2030, we need 7 million people.

Then, the questions you would ask is – why can’t we increase productivity? Why can’t we work more efficiently? Why can’t we work smarter? And you are right – the key question is this: do we need to increase our populations just so that we can grow the economy? What else can we do?

How Will Capitalism Evolve?

Before we go on, let’s explore the state of the world for a bit.

According to an article that I had stumbled onto online, “Towards the End of Capitalism”, the author, Rafi Moor, describes this of capitalism: “Efficiency is not only about making the most out of given resources. Efficiency, by definition, means minimize waste, and capitalism is an extremely wasteful system. The concept of the capitalistic economy is making as much money as possible, independent of needs or goals. The more, the better. Increasing profits again an again can be only achieved by increased consumption. So the interest of companies is to make people buy as much as possible – much more then they really need. The interest of companies is that we waste as much as possible and they successfully act to making us do so. Since there is no limit on the amount of money that people and companies want to make, it is not enough anymore to have a constant profit. A constant growth is demanded. A company that doesn’t show a constant growth is not regarded successful, even if it is profitable. A constant earning is a failure. Moreover, this growth is measured by percentage, so that a linear growth is also not enough. Keeping the growth percentage constant means exponential growth.”

Moor then goes on to describe that, “Keeping consumption high and growing is not only the interest of individuals and companies. A capitalistic economy is considered “healthy” only if it is in a process of growing. So governments and global economic organizations are also trying to keep consumption and waste growing exponentially. We live in a society that spends a significant percentage of its earning for marketing and advertising, that is, to manipulate and convince people to buy things they don’t need, so that other people will have more money to spend on things they don’t need.”

According to Moor, “People in such society are both alienated and stressed. In extreme cases it gets to mental disorders like depression and anxiety that are so common in the modern western civilization. Alienation means people who don’t identify with society and have no will to act for it. When society doesn’t contribute to its members, people don’t feel obligated to invest in it. When everybody acts for his own sake only, competition gets destructive and society becomes inefficient. The role of society is decreased and the advantages of social life disappear. Stress causes personal damage to everyone, but also to society as a hole. It reduces the efficiency of people at work, it causes morbidity, absence from work and high medical expenses. It reduces the economic efficiency of the society.” And this is the state that Singapore is in now.

In the book, “Standing on the Sun: How the Explosion of Capitalism Abroad Will Change Business Everywhere”, the author, Christopher Meyer and Julia Kerby, also say, “That the environment of global commerce is undergoing major change is no secret.” Indeed, in an article by the Harvard Business Review, Meyer and Kirby talks about how, “Capitalism, as it is practiced in rich countries, has taken two brilliant ideas too far. The first is return on equity (ROE), one way of measuring value creation that has managed to eclipse many other, and broader, ones. The second is competition, which has come to be seen as an end in itself rather than as a tool for promoting growth and innovation.”

However, all is not lost. Meyer and Kerby believes that, “capitalism evolves, and even now it is evolving into something new.” They describe how it “requires only a belief that capitalism can evolve and center on new pursuits.” One mode of thinking they propose is to think about “what if the pursuit of financial gain is not really the heart, much less the soul, of capitalism? What if it’s really centered on the pursuit of value?” Meyer and Kerby talks about how, “we humans have the ability to create incentives for bad choices that do not contribute to the long-term health of our enterprises (and that) the problem is reinforced when large bonuses result in prestige for individuals, rather than in increases in some harder-to-trace sense of overall value. The more this feedback loop self-reinforces, the harder it is to change.”

Indeed, Moor says that, “the new social system must be something between the two ends of capitalism and socialism. What will replace capitalism must be closer to the optimal point – the point of balance between individuals’ interest and society interest. It will be a society with enough freedom and competition to make economy work and enough limitations to keep society healthy and stable. Competition must be free enough to make it worthwhile to work, to initiate and to invest efforts in productive busyness, but limited enough to make everyone feel secure and to avoid concentration of too much power in the hands of individuals. Such a society will limit the economic gap between its members. It will support its weaker members, and put a limit to the amount of property that a single person is allowed to possess. It will develop mechanism that will assure efficient and sensible use of natural resources and will see that economical interest will not damage the long term interests of society.”

Thus, at the heart of the matter of the debate of our population policy is this – our population policy is tied to our economy and Capitalism. As long as the economic system is one which favours competition, at the expanse of the rich over the poor, and over excesses rather than efficiency, our system will continue to be one which requires an over-burgeoning population to feed the needs of capitalism.

But as the articles have shown, the shape and form of capitalism is beginning to change. However, this requires individuals to also recognise the value of the human worth, and not just of economic production and goods, so that we are able to reimagine our economy, and actually, our society. This will also mean that we will then learn to value the human being, and our people differently, so that we will prioritise their well-being differently.

What Can PAP Do? What Can You Do?

Now, then the question is – what can the government do? Honestly, PAP jumped the gun. They needn’t have announced the population paper. The form of capitalism is changing. In fact, the shape of Singapore’s economy is changing. Since last yea, the government has shifted its focus towards slowing down the growth of the number of workers, in the hope that they could look into increasing productivity to compensate for the slower growth in workers.

The effects of this won’t take effect anytime soon. We need to give it a few more years to take effect. However, increasing productivity by itself is not enough. As the articles above have shown, we need to reimagine how the economy and Capitalism will change. Even if we don’t actively find a way to change it, the form of capitalism is already changing. So, if the government had waited a few years, they would have a better idea on how to imagine the shape of things to come. Could the government held on and released any white papers in the next two to three years instead? Which is why I still cannot get it my head around why the government believes that they had needed to release this white paper on population so urgently. Perhaps it is to let companies and employers know that even as Singapore cuts down on the amount of labour, there are plans for sustained population growth, so as to ensure economic stability – so as to ensure that Singapore stabilises business sentiment, and maintain its ranking as one of the top-tier financial centres.

Though, at the end of the day, this paper has thrown up more questions that answers. On a broader structural level, the shape and form of our economy will change – this is a change that will occur on global level, and Singapore will move with it. On a local level, it would do well for Singaporeans to learn to adopt a broader perspective towards understanding the shape of things to come, and widen our perspectives about understanding Singapore. It also means taking a more proactive approach towards understanding the change that is to come, so that we will be prepared to manage the change that is to come.

When 2030 comes, will population be the issue that we have to tackle with? I would say it will probably not be the main issue. Between now and then is another 20 years. In the next 10 to 15 years, I would think we would expect more surprises to come in the form of the change of our economy, and the shock that that will bring us. Population growth and changes will be tempered by the effects of the changes to the economy. By then, our bigger problem is – how can we consolidate ourselves to ready ourselves for the new state of the economy?

Advertisements

One comment

  1. Pingback: From the Punggol East By-Election, Singapore Perspectives 2013 to the Population White Paper 2013: Part 1 | The Heart Truths

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s