Monday 6 February 2012

Shrinking population will hurt economy, says Mr Lee Kuan Yew

By Rachel Chang, The Straits Times, 4 Feb 2012

FORMER prime minister Lee Kuan Yew yesterday sounded a note of caution about Singapore's diminishing population, saying it would slow down the economy.

Calling the task of increasing the country's population its 'biggest challenge', he said that when he became prime minister in 1959, more than 62,000 babies were born in that year, from a population half Singapore's current size.

The population now stands at 5.18 million, with citizens forming 3.26 million.

But last year, only about 36,000 babies were born.

'I hope the Year of the Dragon, which Chinese believe brings good luck and fortune, will see more babies born,' he said. 'However, the trend is downwards. We will have to depend on immigrants to make up our numbers.'

Speaking at a Chinese New Year dinner for his Tanjong Pagar GRC at Queenstown Primary School, Mr Lee said that to have babies is 'a personal matter'.

'But collectively for the nation, it has considerable consequences.'

He sketched the dire state of fertility in Singapore. The total fertility rate of the population was 1.2 last year, far below the replacement rate of 2.1.

The education of Singaporean women and their ability to earn as much as the men have altered the social behaviour of both sexes.

'It has led to late marriages. Women can wait to choose husbands who they feel are better than them, earning more and can help raise the family together.'

Since getting pregnant means losing out at work, he said many women defer marriage or worse, stay single.

Mr Lee noted that 44.2 per cent of men and 31 per cent of women between the ages of 30 and 34 are single.

Pointing to the stagnation of the Japanese economy as a result of their hostility to immigrants, he said such a stance is a choice that 'we in Singapore cannot afford to make'.

'The Japanese have large reserves and can withstand slow growth for a long time,' he said. 'Like it or not, unless we have more babies, we need to accept immigrants.'

Mr Lee also weighed in on the economy in his brief address, in Mandarin and then in English, at the dinner attended by 2,000 Tanjong Pagar GRC residents.

Singapore's economy began to slow in the middle of last year, he said. And should the euro zone come apart because of Greece, the worldwide repercussions can be substantially avoided only by countries such as China and India.

They can boost domestic consumption among their huge populations to offset slowing exports, he added.

'We must be grateful that in spite of these troubles, we can expect to make 1 to 3 per cent growth this year, compared to 4.8 per cent last year,' he said.

But this will have an impact on median incomes, which grew 1 per cent last year.

'It is difficult to say what it will be this year, but with the slowing of the world economy and our declining exports, we must expect less growth,' he said.

While the economy is not likely to shrink, Mr Lee said, 'slow growth could mean less pay increases'.

After his speech, he tossed yusheng with the other MPs from Tanjong Pagar GRC before leaving the event early as he was feeling under the weather.

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