The fallacy of “growth at all costs” (part two)

The fallacy of “growth at all costs” (part two)
Thursday, 14 May 2009
Rajiv Chaudhry / Writer

In this four-part series, Rajiv contends that Singapore’s current economic model of high growth, which has served the nation well in the past, is unsustainable for the future as it will undermine Singapore’s ability to provide a high standard of living for its people.

In Part One, he highlighted two problems with Singapore’s economic model: the lack of land and resources, and an overheated economy with a skyrocketing GDP and ballooning population growth. In Part Two, he examines the consequences of exponential population growth.

If Singapore continues to grow at even half the pace it has in the past, its economy in 20 years’ time will be worth over S$400 billion[i], even if the current crisis wipes 20% off the 2008 GDP figure.

This will place it in the same league as the one now occupied by the UAE, Thailand, Ireland, Finland and South Africa[ii], currently ranked between numbers 32 and 36 in the IMF’s list of the world’s largest economies. All these countries have vastly larger land masses than Singapore.

To sustain an economy of that size, the population will need to be at least between 7 and 8 million[iii], possibly larger. The long-term population planning parameter of 6.5 million mentioned by the Minister of National Development, Mr Mah Bow Tan last year[iv] would therefore appear to be an underestimated figure.

Since the government has acknowledged that citizens are not replacing themselves, let alone contributing to an increase in the workforce, the extra workers needed to support an economy of that size will have to come from one source: imports.

Stresses on Singapore’s infrastructure

To contain these extra numbers, housing density will rise. Fifty to 60-storey HDB blocks will become common; private apartments will become smaller and the government will actively explore the use of subterranean space for daily activities. The children of these new immigrants will need to go to school, so more schools will have to be built; they will fall sick so more hospitals will be needed. There will be pressure on restaurants, stores, libraries and every type of facility and public resource.

The Minister for National Development also mentioned in a speech in 2007[v] that by 2015 Singapore aims to double the number of annual visitor arrivals to 17 million (2008 visitor arrivals numbered 10.1 million), so some 30,000 more hotel rooms will need to be added to the current total of just over 39,000 rooms[vi].

Singapore will turn into a rabbit warren with underground hutches.

Our roads, already strained and carrying the world’s most expensive cars, will become even more congested. We will become accustomed to seeing the kind of gridlock we thought occurred only in Bangkok, Jakarta, Taipei and Kuala Lumpur. Shopping centres will become crowded, with people jostling for service. Keeping these places litter-free will be a major task. Public transport will see the kind of rush-hour traffic we think occurs only in Tokyo, London and New York.

As for greenery, the government has already bulldozed most of the primary and secondary jungle on the island, including the large mangrove forest in Punggol[vii]. It is only thanks to the foresight of 19th century colonial administrators that we have the central catchments containing the last remnants of primary Malayan forests on this island.

So Singapore, already the second most densely populated country in the world[viii], will become even more densely built upon. Its roads, occupying some 12%[ix] of its surface area and approaching the 15% occupied by housing, cannot be expanded by much more. Highways and other facilities will be built underground instead.

Increasing social tension

Most damaging of all, the social fabric of this country will be stretched to the limit. In 20 years, the pool of citizens will probably rise to about 3.5 million. Singaporeans will then comprise some 45-50% of the population; roughly one in two persons here will be a foreigner (for the purposes of this article, I use the word ‘citizens’ to refer mainly to those born in Singapore).

Singapore has always been an immigrant society. However, between 1819 and 1965 or in 146 years its population rose from less than 10,000[x] to 1.88 million. Immigrants of all descriptions — Europeans, Indian, Arab, Malay, Javanese and Chinese — were absorbed into the social fabric. Note, the average rate of immigration during this period was about 13,000 persons per year.

We are now talking about a completely different order of immigration[xi], which sees a wholesale influx of people whose value systems and language are, arguably, sufficiently different from those of Singaporeans and will give rise to tensions and strains in our society. It is one thing to absorb people “in small doses” where the new immigrants are given time to assimilate into the host country.

It is quite another to throw open the doors to a large inflow of people. Where such large-scale immigrations have taken place, for example in Germany under their “Guest-Worker” programme (resulting in some three million Turks settling in the country). Social problems have been created that remain unresolved to this day.

From 1961 onwards, Germany welcomed mainly poorly-educated Turkish “guest workers” into the country to provide unskilled labour. No attempt at social integration was made. It was intended that the workers would work for a while, then return home. The problem was: They stayed and multiplied. Today, issues of second-class citizenship, nationality and integration plague Germany where there are large immigrant enclaves, resulting in social stresses and security challenges, particularly in relation to the Muslim affiliation of Turks.

In Singapore’s case, the government is trying to better manage the issue. Nevertheless, the sudden influx of a large number of immigrants in this land-scarce country can cause a “pressure-cooker” effect where social stresses, cultural clashes (even though the immigrants may come from similar racial groups) and resentment at jobs being taken away can build up. Socio-economic problems are likely to mirror the multiplier effect of exponential population growth through immigration.

Singapore would do well to review its policies with a hard-headed look at what has happened in other countries supporting rapid population growth through immigration.

End of part two.

See also: Singapore’s Great Population Leap


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[i] GDP in 2008 was S$257 b; a 20% deflation will reduce the economy to a size of about S$200 b. Since the economy grew 4 times between 1990 and 2008, it is reasonable to assume a larger economy will grow at a slower pace. Even if it only doubles in size over the next 20 years, Singapore will have a S$400 b economy. If the crisis had not taken place, the 2008 GDP would have doubled to over S$500 b in 20 years time, assuming the same pace of growth.


[ii] IMF’s 2008 list of world GDP rankings - http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

[iii] Hong Kong with a population of 7 million has a GDP of S$310 billion. (NB 90% of Hong Kong’s GDP is accounted for by the service sector. If manufacturing had a higher share, an even larger population would be needed to support it). Singapore’s projected GDP of S$400 b would need at least a one-third larger population to supprt it than Hong Kong’s current population.

[iv] http://www.mnd.gov.sg/ search by population policy or Master Plan 2008

[v]http://www.mnd.gov.sg/ search by population policy or Master Plan 2008 ; http://www.mnd.gov.sg/publications/planningforgrowth/brochure.pdf

[vi]http://www.singstat.gov.sg/stats/themes/economy/ess/aesa122.pdf

[vii]It is ironic that, having destroyed nature’s work, the Ministry of National Development is now spending millions to create artificial ‘wetlands’ in the new Punggol and Serangoon reservoirs to attract water and migratory birds

[viii]http://en.wikipedia.org/wiki/List_of_countries_by_population_density - Monaco is the most densely populated country followed by Singapore. Hong Kong ranks third.

[ix]LTA Land Transport Master Plan at http://www.lta.gov.sg/ltmp/LTMP.html, page 20 item 2.1.1

Singapore - A Pictorial History by Gretchen Liu


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