Some have advocated for zero net immigration and no increase in share of foreign workers in the workforce, while others argue that it is necessary to expand the labour force here to sustain economic growth. Yet, Singapore can achieve only two out of these three objectives and must make balanced choices in addressing this demographic trilemma, said managing director of the Monetary Authority of Singapore Ravi Menon. Speaking at the IPS Singapore Perspectives forum on Monday (Jan 22), Mr Menon added that Singapore’s demography alone does not dictate its destiny, as he spelt out how the nation can sustain its economic dynamism in the face of demographic change. Below is an edited excerpt of Mr Menon’s speech.
I will focus my presentation on the economic implications of demographic change: what it means for economic growth and economic dynamism. The two are different.
My presentation will centre around two broad themes.
First, I will describe our demographic trilemma – the constraints and the choices we need to make.
Second, I would like to argue that demographics is not destiny – why economic dynamism is not a numbers game and how we can remain dynamic amidst this demographic challenge.
Let’s start with the total fertility rate, or TFR.
By the way, we must be one of the few countries in the world where most people know what TFR stands for! It is indeed an existential issue for us.
The TFR is the starting point of all demographic analysis. Singapore has had a sustained decline in its TFR. Our TFR fell from around 1.8 in the 1980s (which is already below the replacement level of 2.1) to about 1.3 in the early 2000s. This has weighed heavily on resident population growth as seen from the relatively close correlation with the TFR.
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