Singapore prides itself on being one of the world’s most dynamic financial hubs and its government policies have all along placed a great emphasis on the importance of economic growth. Human resource, infrastructure and business friendly incentives have been the core of Singapore’s government policies. While each key aspect has gradually evolved alongside rapid global digitalisation, its human resource policies have impacted its citizens the most. (Blog,2015) “ Singapore’s growth in labour shortage is the most challenge task as of yet, and the re-establishment of the economy for coping with such demands will take some time,” the Monetary Authority of Singapore’s (MAS) managing director said on Tuesday (Sept 6) (Gov, 2016). As the number of people in the workforce decreases, there are two main reasons which contribute to this.
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Firstly, as Singapore’s total fertility rate (TFR) has dropped to 1.16 in 2017, it is the lowest recorded figure since 2010 and the second lowest figure ever. Meanwhile, statistics show that 1.16 mark is continuing with a declining trend since 2014 (1.25), 2015 (1.24) and 2016 (1.20) (Ong, 2018). This means that not only the number of people in the workforce will definitely continue to decline, but it also means that Singapore’s population will no longer be able to sustain itself. In the long run, the number of workers in the workforce will shrink even more.
Secondly, as technology advances, the life expectancy of people increases too. According to the latest World Health Statistics report by the World Health Organisation (WHO), the average life expectancy in Singapore was 83.1 years in 2017 (Today, 2017). As Singapore’s retirement age is at 62 years (MOM, 2018), there will be lesser workers in the economy and a greater number of older people whom will need medical care and attention.
With this lack in number of workers in the workforce, many companies, be it local or foreign, will choose to operate overseas, especially when there is a lack of skills and talents locally. The overall output of Singapore will also decrease as there are fewer worker and unless productivity per worker increases greatly, this would result in a lower Gross Domestic Product (GDP). With a economy that is not as competitive as before, over time it may cause a decline in economy growth. When this happens, Singapore’s tax revenue will begin to decline as well. This means that not only will the country be unable to sustain it’s current spendings, we will not have enough resources to care for an ageing population either. (Ho, 2018)
This is why foreign workers are needed in Singapore. “There are trade-offs. If we have no foreign workers, our economy suffers, our own lives suffer. We have a lot of foreign workers, the economy will do well,” Prime Minister Lee Hsien Loong said (Chang,2015). The White Paper published by Singapore government in 2013 that details a possible population trajectory of 5.8 million to 6.0 million by 2020 and 6.5 million to 6.9 million by 2030 (Mti, 2013), has caused unhappiness among citizens. Citizens claim that not only will foreigners take their jobs, but also use Singapore’s infrastructure that was paid by their taxes. However, they do not understand that the immigrants supplement our shrinking population, and help to build a stronger and more sustainable Singaporean core. These immigrants brings with them their diverse talents, skills, experiences, and knowledge. Diversity in our population supports innovation and entrepreneurship, and adds to our strengths as a society and economy, helping us to adapt to rapidly shifting global trends and rising competition. Taking in immigrants who are in the younger age groups also helps to make up for the smaller cohorts of younger Singaporeans and balance the shrinking and ageing of our citizen population.
Skilled foreign talents are needed in our economy as the growth of new industries is leading to a need for workers with certain skills such as cyber security and artificial intelligence. While Singaporean’s are being taught the relevant skills needed, some time will still be needed before the supply of local workers with the right skills will be able to meet the high demands. Apart from that, many industries such as info-communication technology are fast-moving and market demand can shift quickly in response to advances in trends and technology.
While skilled foreign workers are greatly encouraged by the Singapore government to become permanent residents as they also add to the vibrancy of the economy by bringing with them new skills and abilities, which in turn helps spurn growth and grows the economic pie (Seah, 2017). In a paper which analysed data from OECD countries in the 1990s, it has been found that immigration is likely to help with locals’ wages and employment instead of reducing job opportunities (Docquier, Ozden and Peri, 2013). In the long run, the intake of talented workers could very well lead to increased productivity. Locals will then stand to gain from this since their wages will increase with the increase productivity (Seah, 2017)
Foreign talents play a very important role in sustaining Singapore’s future economy and our population. Without them, there would be many dire consequences such as lack of manpower and decreased overall productivity, leading to economic stagnation.
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