Sunday, February 3, 2013

Population White Paper: Thoughts in a Nutshell

It's difficult to know where to begin a discussion on the recent Population White Paper, because there are so many facets to this policy. So instead, I thought I would share some of the best things I have read, written by friends who are much more thoughtful than I.

The White Paper sure has some great pictures!

Firstly, I think Gaurav Keerthi has framed the issue very nicely.
Population forecasting makes 3 key assumptions: (1) fertility, (2) mortality, and (3) immigration. It is not true that fertilityand mortality are fixed - a government can implement policies that are more family friendly to raise fertility or (in China's case) reduce fertility by restricting families to just one child. Mortality is a factor of medical standards. Immigration is famously controlled by the government. So all 3 factors can be varied, but it is true that immigration is the easiest to control and more responsive lever to pull. 
As economies develop, fertility reduces and mortality reduces. This link is so well-known that it has its own name: "Demographic-Economic Paradox". So as we develop further, it is almost inevitable that we will shrink as a Singaporean core. 
Why does the government have to care about a shrinking population? As we shrink, there will be fewer working age Singaporeans and more elderly to take care of. This will put a big drain on resources (personal as well as government) and is difficult to sustain. Also, our economic growth will reduce and the government may not be able to afford building new hospitals and paying for top-quality doctors because the workforce is smaller (and as a natural result, fewer companies may be here). These are all assumptions, but they have merit and are likely to apply to Singapore too. 
In order to continue having the level of infrastructure and development that we have, the government is eager to ensure that the working population size remains large enough to sustain corporate activity. 
However, there are many who feel that the societal costs of this may outweigh the economic benefits. It is difficult to quantify the "societal" costs, hence the debate tends to be had on emotive terms by most people. Nevertheless, there is merit and the concept of "externalities" is worth researching further to understand this. 
There is unlikely to be a right economic answer in this debate. However, many are arguing about what process should be used to derive the answer, as well as the answer (and the assumptions about fertility/mortality/immigration) itself.
It is noteworthy that the NTPD has greatly simplified all these factors for us in putting out their current proposal. The question perhaps is whether they have oversimplified it.

Secondly, I agree with Yawning Bread that the white paper appears prematurely fixated on maintaining growth of 2-3%. I am disappointed because I thought it was a very refreshing approach to help Singaporeans understand the tradeoffs of the choices we make using the approach of alternative futures (i.e. the IPS Prism Scenarios).

There is also the ongoing Singapore Conversation. But before we finish conversing, there is already a proposal on the table. In parallel to this, "NPTD embarked on a year-long public engagement effort to gather the views and suggestions of Singaporeans"In fact, the summary of feedback they received seems to indicate that GDP growth is low on most peoples' priorities. (Of the feedback themes, "Economy and Workforce" only comprises 12% and even within this, there is no mention of GDP in the summary.) Again, are we jumping the gun by putting this upfront as a key consideration?

If we are trying to maintain "a strong Singaporean core", shouldn't this be about having more Singaporeans by birth rather than new citizens? Perhaps we should also consider policies allowing more parents to become fulltime caregivers, to promote an increase in birthrates rather than rely on immigration. Many parents decide not to have kids because they cannot balance work and family, or because they do not want to outsource them. This would come at the expense of our GDP of course, and this is one of the alternative scenarios we should consider. Today, most almost all the policies are centred around helping dual income couples manage childcare options for their children. For example, instead of just child-sick leave, why not have spouse-sick leave? Why not promote flexible work options for stay-at-home mums? Can the government provide a maternity leave-equivalent for such mothers?

In the words of The Economist, "the government now has to show not only that it can run Singapore’s economy but also that it can answer the question: what and whom is its success for?"

I should also add that I do not endorse everything Yawning Bread has written. In particular, his suggestion of draconian tax policies which seems designed to open a future debate on whether singles should be allowed to have children. "Marriage should not be a pre-condition. Married or single, everybody has to raise 1.5 children." A separate LGBT agenda perhaps?

So what is wrong with being focused on GDP?

Lastly, here is a thought- provoking quote form Soon Sze Meng, amended from a 1968 speech by Robert Kennedy. It is good to reflect on the GDP as a useful national goal at all.
"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross domestic product ... if we should judge Singapore by that - counts increasing expensive housing and cars, and more air conditioning to cool our shopping malls. It counts tuition for our children and the counseling services to comfort them. It counts the destruction of our mangrove swamps and the loss of our heritage buildings due to more high rise. It counts bankruptcy filing cost for those who lost everything in the casinos, and funeral services for those who lost their lives in senseless accidents. It counts Rolex watches and Prada bags, and the advertisements which promotes material wealth in order to sell more branded goods to us.

"Yet the gross domestic product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the ties of our extended family and the strength of our friendships; the belief that all have equal opportunity to succeed or the integrity of our leaders. It measures neither our work ethics nor our respect for all races and religions; neither our shared grief nor our shared happiness; neither our compassion for the poor and disabled nor our devotion to national service; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about Singapore except why we are proud that we are Singaporeans ."
There has been a lot of outcry and debate over this population paper. I hope it helps us come together, rather than dividing us. It would be useful, I think, to clearly paint the picture of a Singapore without continued GDP growth to see if we can stomach it.