Wednesday, January 26, 2011

Benefits of Economic Growth Not Shared Widely

As I have written earlier, the anecdotal evidence that I come across suggest that there is a bifurcated economy here in Singapore, which the largest share of the benefits of growth not going to the average citizens who form the bulwark of the economy.

Today, I came across a news story on this issue written from a Japanese perspective, published by the Yomiuri Shimbun:

Like many other developed countries, Singapore is dealing with demographic changes, hitting a record-low birthrate of 1.22 in 2009--even worse than Japan's. But the multiethnic city-state is more accepting of foreigners than Japan. Indeed, it relies on migrant workers to keep its economy rolling. Currently, foreign workers make up about one-third of Singapore's total workforce.

But growth has not come without a price.

The surge of foreigners has created a backlash to the government's open-door policy. Local residents have increasingly voiced anxiety that migrant workers compete with them for jobs, housing and public transportation.

Given that the Japanese themselves face a demographic collapse, it's not surprising that our problems have found some resonance with the author of the article. The article highlighted the policy dilemma between needing foreigners to support growth and the demands of Singaporeans to have a larger share of that growth through a more reasonable pace of importing foreigners.

Apart from the foreign labour dependence issue, the article also covered the issue of Singaporean brain drain. Interestingly, the impression that I got from the article was that the children of Singapore's elite citizens, who arguably have benefited most from the country's growth, have increasingly chosen to move abroad. To me, this speaks volumes about how the elite think about the country's long-term prospects, and if we tie it back to the issue of 'hope and faith' in the country, it is not hard to see why the birth rate is so low, as I have previously argued.

The full article from Yomiuri can be found here.

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