Today state media announced that Singapore’s population had risen to 5.92 million, a 5% jump from the previous year and an over 4% jump from the previous high of 5.7 million in 2019.

Obviously this was overwhelmingly driven by immigration since the number of citizen births fell to around 30,000 while the resident Total Fertility Rate in 2022 fell to 1.04 from 1.12 in 2021. While the number of resident deaths was still less than citizen births (presumably because of the long standing high rate of conversion of PRs into new citizens), in the absence of immigration the resident population would have already started to decline or be on the verge of doing so. Meanwhile the median age of the resident population at 43 is now substantially higher than the UK (40) or US (38).

The jump in population, most of which was in the non-resident labour force which rose by 13% to 1.77 million, obviously was a big factor in staving off recession by boosting GDP growth. 203,000 of the total increase of 281,000, or 72% were in this category. Assuming most of the additional population went into the labour force (which is defined as those over 15 who are employed plus the unemployed who are looking for work) , over 90%, then the boost to the total workforce was over 7%. Yet GDP grew by only 2.2% over the same period meaning that productivity or value added per worker fell by about 5%.

Increasing the workforce and the population has always been the PAP’s go-to solution to generate growth without any rise in the underlying productivity of the factor inputs. By doing so they bamboozle gullible Western governments and media into believing the PAP’s disinformation and that Singapore’s growth record is exceptional. As I’ve said in too many articles on my blog to list here (see here for just one), the use of foreign workers to try to compensate for the fact that the local labour pool was largely exhausted began in the 1990s. This is now happening again with the rise in population coming mostly from a sharp rise in the nonresident workforce which has exceeded prepandemic levels.

Showing positive GDP growth, despite shrinking value added per worker and a squeeze on real disposable incomes, while other economies are barely growing or shrinking, allows PAP to claim that they’ve been managing the economy successfully and bamboozle you into believing that you must be getting richer and therefore should vote for them at the fast approaching election. However other countries with shrinking labour forces could actually have higher growth rates of value added per worker even if GDP growth is negative. A good example of this is Japan. Recently Singapore state media carried an anecdotal comparison of purchasing power between Japan and Singapore which showed that Japanese workers were better off.

A growing population also has benefits for the PAP in other ways too. Increasing the population puts pressure on housing and land prices which feeds through into the value of land reserves. While the Government’s financial reserves are likely around $3 trillion, the land it owns is worth several times that number and this increases every time an HDB breaks a new sales record. The Government can use the excuse of rising property prices to divert yet more money from the Budget into housing subsidies, both to CPF and HDB, which flow back into the reserves when land is sold to HDB and private developers, without having to spend anything on things that would actually increase the welfare of Singaporeans.

And of course an elastic supply of labour, imported from foreign sources, keeps a lid on wages while bolstering the profits of the state companies which employ many of these workers. The lack of a minimum wage and the easy availability of workers allows the Government to tout its so-called (Un)Progressive Wage Model as protecting workers when it’s in fact institutionalizing low wages at a third to a half of the UK minimum wage. This keeps domestic consumption below 40% of GDP whereas in most Western countries it’s over 60% and in the US around 70%.

The one benefit of increased population is the increase in domestic demand. This leads to higher tax revenues through mechanisms like GST and collections from rising residential and commercial rents. But the PAP doesn’t share the gains with Singaporeans, other than a small fraction which it claims fully offsets the GST increases paid households. Furthermore the offsets are only for a strictly limited period and come in place of the far more generous help extended to citizens of other rich countries to deal with rising costs. When the PAP disingenuously announce that Singapore has successfully avoided recession, Singaporeans should understand how that happened and ask the Government to demonstrate how it has benefited them. In 2013 the PAP announced a White Paper on Population with a target of 6.9 million by 2030. It now looks as though that will be exceeded by 2026 at the current rate of expansion. I wrote about it here ten years ago It remains as relevant as ever because the PAP strategy is never to give up on their goals but only to back off for a while and then go on with the same strategy once they think the fuss has died down. What’s happening now suggests that even the bogeyman of a stealth target of 10 million by 2030 no longer looks wide of the mark. Giving the PAP a blank cheque via an electoral supermajority has never been a wise strategy.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam