Monday, 18 February 2013

Population White Paper: The Great Population Debate

The rocky road to future growth
The Population White Paper was a plan to secure Singapore's success, in the face of a serious demographic challenge. So what went wrong and how can things be put right?
By Jessica Cheam, The Straits Times, 16 Feb 2013

SOMEWHERE along the way in the White Paper's journey from policymakers to the people, there was a breakdown in communication.

The Government's population roadmap was a year in the making. Senior politicians declared it a national priority. Ministers and civil servants spent time seeking views from the public at townhall meetings and online.

Yet when the plan was finally unveiled earlier last month, the response was overwhelmingly negative. Many were shocked to read of further plans to grow the population to reach up to 6.9 million in 2030, when so much angst had been expressed about present-day congestion.

Many like National Family Council chairman Lim Soon Hock put it down to a gap in expectations between the Government and people.

"People wanted short- term issues to be solved before addressing the longer-term challenges of our population. I do not think the Government expected such a negative reaction. It must have come as a big surprise," he said.

Even some of the Government's own MPs had serious doubts.

Holland Bukit Timah GRC MP Liang Eng Hwa tells Insight: "When I read the paper, I felt it came across as all about the numbers. There are strong reasons for the White Paper, but many MPs felt it was misunderstood. Important issues such as reducing GDP growth, and how to support an ageing population, were not adequately aired. It was a communications issue and could have been done better."

Many felt the Paper, which is meant to guide policy, was rushed through Parliament, with just two weeks between its launch and its endorsement by the House.

Nominated MP Eugene Tan, a law lecturer at the Singapore Management University, says: "It was more a case of the Government appearing to want to bulldoze its way, treating the White Paper as an imperative rather than a basis to state its case and seek buy-in."

Framing the debate

DEPUTY Prime Minister Teo Chee Hean, in launching the White Paper last month, said the Government is focused on growing Singapore at a sustainable level, and pledged to plan ahead so that a high quality of life can be maintained.

Still, the projected population of up to 6.9 million by 2030 rankled. Two days later, National Development Minister Khaw Boon Wan reframed the 6.9 million figure as a "worst-case scenario".

Prime Minister Lee Hsien Loong backed Mr Khaw, saying in a Facebook post that 6.9 million is not a target but an aggressive scenario the Government must prepare and build infrastructure for, ahead of demand.

Ministers seemed to be searching for the most convincing way to present the population roadmap.

DPM Teo took yet another approach. He presented three scenarios in Parliament - of unbridled, moderate and zero growth. He emphasised that the Government proposed to take the middle path.

The White Paper outlines the serious demographic challenge facing Singapore as its population ages and fertility flounders at way below the replacement rate.

It recommends a slower rate of GDP growth at a range of 3 to 5 per cent to 2020, and 2 to 3 per cent from 2020 to 2030, compared to an average of above 5 per cent in recent years. The workforce would see growth of 1 to 2 per cent, down from an average of 3 per cent in the past 20 years.

Some 15,000 to 25,000 new citizens will be taken in each year to keep the population stable. The projected outcome of these policies would be a population of between 6.5 and 6.9 million by 2030 because of the uptake in new citizens and foreign workers.

These numbers were controversial from the beginning and on the second day of Parliament's five-day debate on the White Paper, Mr Liang proposed a change in the wording of the motion before the House.

The move was swiftly backed by Minister in the Prime Minister's Office Grace Fu, who oversees population matters.

Mr Liang gave Insight the back story to that amendment.

He says that at an internal PAP caucus before the debate, MPs raised concerns about key issues in the White Paper.

A group of backbenchers felt some key points needed to be put across and approached Ms Fu with the idea.

"We felt the Paper may come across too 'hard', in that it was all about numbers. We wanted to highlight the Singaporean core, and clarify the numbers. So that's how the amended motion came about."

Still, the debate struck Lee Kuan Yew School of Public Policy Senior Fellow Donald Low as "mechanistic and linear". He says that economics is not, and should not be, the only lens through which population policies are examined, analysed and debated.

Profound sociological questions about sense of national identity - even though mentioned by a handful of MPs in the debate - have not been adequately answered, leaving a big gap in the debate, he adds.

NMP Eugene Tan says the issues could have been better framed. "Framing was the elephant in the room. It was poorly done and that meant the Government was on the defensive from the word go."

As a result, the Government had to work hard to assure Singaporeans rather than use the debate in Parliament to mobilise people for the road ahead.

The White Paper also faced strong opposition from the Workers' Party and several Nominated MPs.

WP chairman Sylvia Lim accused the Government of getting its priorities "the wrong way around" in its quest to expand the population for the sake of economic growth.

WP proposed an alternative population projection of up to 5.8 million by 2030, and a more modest GDP growth rate of 2.5 to 3.5 per cent to 2020, and 1.5 per cent to 2.5 per cent from 2020 to 2030.

The Prime Minister sought to address many of these criticisms and concerns when he addressed the House. His speech moved many, especially when he spoke of the Singaporean identity.

PM Lee made a heartfelt promise to preserve the Singaporean core, and said the Government would never allow Singaporeans to be "overwhelmed by the sheer flood" of immigrants, even as he urged them to see things in perspective.

In full damage control mode, he also emphasised the amended motion, saying that the Paper charts the road till 2020 but there should be a review closer to that date.

He also said the population trajectory beyond 2020 has to be left to a future government and future Singaporeans to decide.

Political observers say this marked a big shift in position, with some saying the Government had to backtrack and effectively set aside its highly controversial projection of 6.9 million.

PAP's Mr Liang says PM Lee's speech, and the amended motion, assuaged Singaporeans' concerns to a certain extent.

At the end of five days of intense debate, the longest in the House in recent memory, all nine WP MPs opposed the White Paper, together with Non-Constituency MP Lina Chiam and NMPs Faizah Jamal, Laurence Lien and Janice Koh. All 77 PAP MPs present voted "yes".

The alternatives the Government has sought to bring opposing sides together but no clear consensus has yet emerged. As WP's Ms Lim sees it, "Each model has its own assumptions, which are not universally accepted nor immutable".

She cites the Government's assumptions on old age support ratios as one point of disagreement. "I think there needs to be more discussion and study on the sustainable old age support ratio, taking into account the savings and other economic resources available, and the experience of other countries," she says.

Senior research fellow Gillian Koh of the Institute of Policy Studies notes that there seems to be "little sympathy" for workforce growth even if it has been reduced, and the political mood is sour towards immigration and business.

"The trust gap is the greatest between the public and the political opposition on one side and business on the other side. The Government is trying to bridge this but to very little effect," she says.

Beyond Parliament, the debate rages on.

Former NMP and Wings founder Kanwaljit Soin wrote in The Straits Times recently that transformational thinking is required to mobilise the elderly population to continue contributing to society. This "positive ageing" concept counters worries of an ageing population increasing the dependency ratio and raising the tax burden of the workforce.

Former urban planner Liu Thai Ker, in a commentary published this week, said Singapore should plan for population growth, local and foreign, "at as slow a pace as possible".

He tells Insight: "We must accept population growth as a reality if we want to sustain our economy. But the growth rate in the last two decades was too high. We should grow at a rate that allows us to plan for such a number while maintaining a good-quality living environment."

Other more radical ideas that have emerged include one by Austrian demography expert Wolfgang Lutz, who said at a National University of Singapore seminar this week that Singapore may be looking at its population figures through outdated lenses. He said nations should set aside 2.1 as the desired population replacement rate and urged them to look at changing conditions such as rising education levels, lower mortality rates and immigration.

On- and off-line, citizens are carrying on the debate - with some softening their stance in the aftermath.

Former NMP Viswa Sadasivan said in a letter to The Straits Times Forum Page yesterday that the Government did the right thing by forcing citizens to address the issues."Even if key recommendations are rejected by the people, it need not be seen as a rejection of the Government but a serious call for better listening and greater accountability," he said.

Some others remain sceptical. There are groups, for example, that support the opposition National Solidarity Party's call for a referendum on the population issue.

What is clear is that Parliament may have passed the White Paper but the public debate on it is far from over.

The way forward

PAP backbencher MPs like Mr Seah Kian Peng are pinning their hopes on the amended motion, which he says deserves more attention.

He hopes Singaporeans read it, and take note of its emphasis on a strong Singaporean core, the need to moderate the flow of immigrants and calls on the Government to resolve current strains on infrastructure and to build ahead of demand.

"There is no reason why one should not support such a proposal," he says. What worries him are not alternative views but the tendency of some to engage in destructive discourse which is neither responsible nor reasoned.

Front-line civil service officers, for example, have endured abuse and threats, he notes, as anti-establishment sentiments have swelled in recent times. But Mr Seah also recognises that there are lessons for the PAP - and it comes down to good communication: "There needs to be some genuine and consistent exchange both of views and of convictions - a national view of how to take collective action."

Mr Liang says backbencher MPs have been and will be meeting ministers as part of their regular dialogues, to further understand the challenges and concerns arising from the White Paper.

"We are concerned... but we will work with the Government to see how we can strengthen that Singaporean core, and to take care of Singaporeans," he says.

With the recent fallout, all eyes are on how the PAP will recover from its missteps and work to win back public trust and confidence.

The Government also needs to continue the work of explaining and convincing Singaporeans of the serious demographic challenges ahead due to rapid ageing and falling fertility, which need society to work together to tackle.

Veteran PAP MP Charles Chong acknowledges that the Government has yet to win many hearts on the White Paper. But, he says, "Politics is about winning hearts and minds. The jury is still out on which is more important".

Dr Gillian Koh of the Institute of Policy Studies says of the whole debate: "Politics is the art of the possible, and for Singapore's sake, I hope we find more political leaders who seek to bring convergence."

Whether there is consensus on the Paper or not, one thing that political observers agree on is that the level of discourse needs to be elevated to one that is constructive.

Dr Koh says: "I hope we will leave this discourse about slapping each other behind us. It is a sure way to make the tone of politics and public life in Singapore an unhappy one. We can do better."


“An ideal population size is not an arbitrary figure, it’s related to how well you plan the environment. We need to sit the planners down and carefully examine all the options we have. I feel that 6.9 million... is not a big increase ultimately. What will our population be in 100 years’ time? We want Singapore to last forever, and if we do not look long-term beyond 2030, then our option to cater for further population growth is substantially reduced.”
- Former urban planner Liu Thai Ker, director of RSP Architects Planners & Engineers


“The pent-up feelings of Singaporeans over the last few years of overcrowding and strains on public infrastructure set the background for an emotive sitting. To me, one significant observation was the fact that we have evolved a unique Singaporean identity which Singaporeans believe is worth defending – the elusive ‘Singaporean core’. I believe WP’s stand on what constitutes the Singapore core resonated with many Singaporeans. Singaporeans are also not comfortable with the vision the Government has for a dynamic economy resulting in huge population growth, as they believe they would be staring at more stress and a lower quality of life down the road.”
- Workers’ Party chairman Sylvia Lim


“We have different points of views but it cannot be a matter of calling a referendum and calling that process ‘decision making’. We cannot abdicate our responsibilities as leaders in that way. At the same time, there is no way to achieve governance if public decisions are continually challenged and each step requires a lot of energy to overcome intractability. We have seen how this has hamstrung governments even now, when hard decisions need to be taken, whether it is gun control or financial reform.”
- Deputy Speaker of Parliament and Marine Parade GRC MP Seah Kian Peng


“It is going to be an uphill task for the Government to convince the public until emotions subside and until positive results are seen. I am heartened that it has made clear that the issues in the White Paper are not something cast in stone but something that should continue to be discussed and evaluated as we go along. My hope is that more viable solutions would be surfaced as we continue to discuss with all stakeholders and that the Government would be receptive enough to quickly change course when a better alternative is evident regardless of its origin.”
- Joo Chiat MP Charles Chong

A difference in approach, and not just numbers
By Janice Heng, The Straits Times, 16 Feb 2013

EVEN as the People's Action Party (PAP) and the Workers' Party (WP) traded comparison tables and barbed comments in Parliament, a casual onlooker might be forgiven for wondering just what they were disagreeing over.

At first glance, the differences in both proposals may not seem great: a percentage point or two less growth here, some 5,000 more new citizens there.

The headline figures for total population seem furthest apart, with the Government's 6.9 million versus the WP's 5.8 million. Yet the Government has made it clear that its figure is a "worst-case scenario" and meant only for planning purposes.

"There appears to be no consensus on the 6.9 million figure, but the fact of the matter is that the Government is hoping that it wouldn't be 6.9 million, and the opposition wants the figure to be substantially lower than 6.9 million," says National University of Singapore sociologist Tan Ern Ser.

Even the WP's proposal of freezing foreign worker numbers, labelled "drastic" and "risky" by the PAP, might have been misconstrued.

WP Non-Constituency MP Gerald Giam tells Insight his party was not advocating an absolute freeze.

The cap applies only if the resident workforce - citizens and permanent residents - grows by 1 per cent a year, to yield an overall workforce growth of 0.6 per cent.

If that target cannot be met, then the labour pool will still be topped up with additional foreign workers.

In his parliamentary speech, Mr Giam said: "We should strive to keep our foreign labour force constant between now and 2020, depending on our success in growing the local labour force."

Later, when queried by minister S. Iswaran about whether his party wanted a freeze on foreigner numbers, he said it did not see a need for more foreign workers "except if we cannot attain that 1 per cent growth in resident labour force".

Still, does this all mean there is little to choose between the Government's proposal and the WP's? Not so, say economists.

The absolute numbers may not look too far apart. But in reality, the differences are substantial - in the short term and in their implications for the Singapore that will result.

Take the WP's goal of 0.6 per cent overall workforce growth, compared with the Government's intention to grow it by 1 per cent to 2 per cent till 2020, and 1 per cent thereafter.

To the layman, the gap might seem small. But Lee Kuan Yew School of Public Policy Senior Fellow Donald Low points out that the Government's figure is about double the WP's - a "stark difference".

And the reliance on domestic rather than foreign workforce growth will make a Singapore which is tougher on companies.

National University of Singapore economist Hui Weng Tat thinks the WP plan "cannot be immediately implemented, as (it is) too drastic for some businesses", though it could be a feasible stretch target over the next 15 to 20 years.

Wages will have to rise, and business costs will thus go up, says Mr Low. But the pace of economic restructuring will also be accelerated. "The incentive for firms to raise productivity will be sharpened," he adds.

But more than that, the WP's proposal aims at a Singapore with slower growth - and even small changes in growth rates can be significant.

"One percentage point is not a big difference if you are growing at 5 to 7 per cent, but it is quite big if you are growing at 1.5 per cent," says Bank of America Merrill Lynch economist Chua Hak Bin.

Asset prices could fall, and the opportunities and diversity of jobs will shrink, he adds.

For Singapore Management University economist Hoon Hian Teck, slower growth means higher unemployment, a link that he thinks "seems... to not have been fully grasped" in the debate so far.

The historical data for Singapore shows that below a certain gross domestic product (GDP) growth rate - about 6 per cent, he says - the unemployment rate gradually increases. Even shifting to an era of 3 per cent to 4 per cent GDP growth, similar to the Government's plan, is likely to lead to a period of rising unemployment rates, says Professor Hoon.

"Since holding a steady job is such a fundamental component of a good life... it is a mistake to think that choosing higher economic growth necessarily means neglecting the good life," he adds.

Seen this way, the key choice in the population debate concerns jobs: whether to limit foreign worker inflows and live with higher unemployment, or absorb more workers and enjoy a tighter labour market.

Mr Low, however, does not share that perspective.

He acknowledges that slower growth could lead to higher unemployment, but sees nothing "fundamentally wrong" with slowing down as long as the growth that is achieved is of higher quality and the result of restructuring.

He notes that GDP growth per capita is basically equal to productivity growth, and hence likely to be the same under both proposals, as they assume the same productivity growth rate.

The difference, he says, is that the WP's model allows for growth that is "distributed a lot more evenly", because of the upward pressure it puts on wages. The gains from growth can end up in the pockets of firms, workers or the Government, as profits, wages and taxes respectively.

(* Mr Low has clarified that in his comments, he was not speaking about the WP's model specifically but about an alternative growth model which he has separately argued for in the past.)

"The current model of growth that we have is one that is driven largely by profits," says Mr Low. But under the WP's plan, a larger share will go to wages, he argues.

Whether one takes an optimistic view or a cautious one, the WP's plan is not just the Government's plan with the numbers tweaked. It takes a different approach.

But Dr Chua is sceptical about whether the WP's slower growth model can even achieve its stated productivity targets, and hence the high-quality growth Singapore needs to stay relevant. "I think the experience of most countries would show that productivity growth is related to the age of the population," he says. "Maybe Singapore will buck this trend, I don't know. But this is what experience shows."

Why 6.9 million was too much information
Major policy shifts eclipsed by uproar over population projection
By Rachel Chang, The Straits Times, 16 Feb 2013

IN THE wake of the parliamentary debate on the Population White Paper, People's Action Party (PAP) politicians probably feel like they have been hit by a truck.

Some think that they had actually anticipated the national fu-rore and therefore scheduled the White Paper for the Monday after the Punggol East by-election.

But the chain of events was so unfortunate that it is unlikely that it unfolded by design.

It is hard to imagine any senior politician wanting to be caught on the backfoot, clarifying that the paper contained a "worst-case scenario" and beseeching the people to trust them.

It is hard to imagine any government wanting to contain backbench backlash by accepting an amendment to a parliamentary motion, or, before a vote on the most important document in recent years, having to apologise for a footnote.

It was all topped off with the Prime Minister, after being praised for not leaving the controversial issue to his successor, effectively leaving it to his successor by promising that the Government will not decide on a population size beyond 2020.

What happened over the last two weeks is a real pity, because the bulk of the document is worthy of praise. For starters, it is a policy roadmap that directly responds to, and embeds the lessons of, the difficulties of recent years.

The two key criticisms of the Government's population policy have been that the pace of economic growth - and consequently, the influx of foreigners - has been too intense, and that the infrastructure was not readied for the surge. This resulted in a myriad of problems, from high housing prices to wage stagnation, all of which took a toll on Singaporeans' lives and convinced them that high economic growth is not in their interests.

The White Paper marks policy shifts on both those fronts:

First, the pace of growth and intake of foreigners will be substantially less - only a third - than that of the previous three decades. Second, the Government will now build infrastructure ahead of demand.

The latter, especially, is a major political shift. For years, PAP ministers have been pointing to the costs of "white elephant" infrastructure, and invoking the "ghost towns" of the late 1990s, when blocks of flats stood empty after demand disappeared overnight due to an economic crisis.

Finally, the Government is acknowledging that the holding costs of empty flats and deserted train stations are more than compensated for by the benefits of slack in the infrastructure.

Whatever is lost when blocks of flats stand empty is more than earned back in the flexibility to respond to population surges - and in the goodwill that accrues when Singaporeans feel peace of mind.

All of these should have been welcomed by critics and supporters alike - the former for being vindicated, the latter for the evidence that the ruling party is not hopelessly wedded to dogma. But instead, they were all but drowned out by the uproar over the 6.9 million figure.

In the interests of better and more fruitful political discourse, let us engage in a thought experiment. What would the Population White Paper experience have been like if the population projections of 5.8 million to 6 million by 2020, and 6.5 million to 6.9 million by 2030, had not been included in the document?

For those who have actually read the White Paper, that would mean taking out the three pages that comprise Chapter 4: Population Trajectories.

I would argue that the document would have been essentially the same, minus the sound and fury over a number that succeeded in defining the debate without being real or particularly significant.

Hear me out.

One of the points National Development Minister Khaw Boon Wan made during the past two weeks was that for the average person going about her day, there is little sense of the total population of which she is a part.

One does not interact with 6.9 million people in one day, one interacts with at most 200 or 300.

But when one cannot get into a crowded train, for example, it begins to feel like whatever the number, it's too many.

Importantly, this can arise in small populations or in big ones. This is a truism of urban planning and a key message that the Ministry of National Development tried to get across: Dense cities are not the same as unliveable ones.

Government planners are confident that they can, through innovative urban solutions and more efficient use of land, cater comfortably to a population much larger than Singapore's current size.

They may or may not succeed. The point is that in the grand scheme of things, the overall population size is actually a tangential piece of information: 5.3 million could seem like too many, and 6.9 million could actually seem like a comfortable fit.

But to give people a number millions more than what the population now is - at a moment of unanimity that it is currently "too many" - smacks of misjudgement.

I am not arguing for duplicity. It is imperative that the White Paper reveal the targets which the Government can control, and is working with.

The growth of the foreign workforce, productivity and gross domestic product targets are all essential pieces of information.

If these figures had been front-and-centre, then there could have been the same rigorous national and parliamentary debate over whether they are the right ones to aim for, minus the note of hysteria and anger.

These components do add up to an estimated population size, but with so many assumptions and variables along the way that the final figure should not be allowed to eclipse everything else.

For example, the White Paper's calculations were based on the current total fertility rate of 1.2. But what if it goes up? What if it goes down? What if technological breakthroughs bring about a leap forward in productivity? What if labour force participation rates spike? What if life expectancy climbs, or drops?

As any of these unforeseen and uncontrollable factors move, so lurches the population size.

This could have better illustrated if the White Paper had presented scenarios of a TFR of 1.2, a TFR of 1.5 (the Government's near-term goal), and a TFR of 2.1, which is the replacement rate.

While the National Population and Talent Division did put out an occasional paper last April charting how the citizen population would change under various TFRs, the Population White Paper could have expanded on this by pairing these scenarios with a variety of productivity growth rates.

The most optimistic of these scenarios would allow us to drastically tamp down on the growth of the foreign workforce.

The various scenarios not only would have illustrated just how contingent the population projections are, but also how important it is to get cracking on the twin national goals of economic restructuring and baby-making.

The key message from the Government should then have been that whatever the scenario, it is readying the infrastructure for many millions more than what we currently have - so that Singaporeans will never feel so under siege again.

Perhaps this seems like a call to be dishonest with the people, or disingenuous with the figures.

A long-standing criticism of the Government is that it is tight-fisted and non-transparent with information, so shouldn't we welcome the fact that it was open about that 6.9 million figure, rather than squirrelling it away, or labelling it a scenario for "year X"?

But I think that's a simplistic interpretation of how a mature electorate deals with its elected government.

I am a proponent of more information - but the numbers we should desire are real ones, such as the number of employment passes we give out, how many prisoners we send to the gallows, or how much we have in the national reserves. The 6.9 million is simply not in the same category.

The Government should also refrain from telling itself that what happened with the White Paper was the necessary fallout from doing the "right" thing. The PAP likes to believe that it would rather go down in flames having governed well, than "pander" to populist pressures. Like martyrs, it will take the political hit for the long-term benefit of the country.

Ironically, the Government actually was doing the popular thing in making those strategic planning shifts that many have been calling for for years.

Yet, not only did it earn no extra goodwill, but also the political rancour actually grew. This was not inevitable and it's important to examine why it happened and how it could have been avoided.

On voters' part, they should appraise the Government not on its means - working estimates and projections - but whether it succeeds in achieving its ends. In this case, that is to deliver on the high quality of life that the PAP says it can achieve. In 2030, that should be the only yardstick by which the Population White Paper is judged.

It's a shame that that "6.9 million" seems likely to be its legacy instead.

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