Republic could fall behind in world's fastest growing region: Shanmugam
By Tham Yuen-c, The Straits Times, 5 Sep 2013
FACED with a low replacement rate and a fast-ageing population, Singapore risks becoming in future the slowest growing country in the world's fastest growing region, said Law Minister K. Shanmugam last night.
Speaking to some 300 students at the Singapore Management University Ministerial Forum, he painted a stark picture of how demographic trends combined with rising costs and external competition could cause Singapore to fall behind its neighbours in ASEAN.
"All our neighbours will be growing faster and we will be growing slowly," he said. "When you look for jobs, and in neighbouring countries, salaries are rising much faster, then the best and the brightest will gravitate out, and whoever is left behind simply can't compete internationally, and your economy is dragged down."
This, he said, could have implications on how the country supports its growing number of retirees. Citing statistics to back up his point, he said that by 2030, each retired person will be supported by just two working adults, down from the current six.
For the working population to better support this larger pool of retirees, he added, the country's economy must continue to grow.
Therefore, the Government aims to bump up the number of citizens who, as professionals, managers, executives and technicians (PMETs), hold higher-paying jobs.
For now, there is one PMET worker for each non-PMET worker. By 2030, the Government hopes the ratio will go up to 2:1. This means growing the number of PMET workers to 1.25 million from the 850,000 now. To do that, the country needs foreign workers to do the lower-skilled jobs, said Mr Shanmugam.
The projected population of up to 6.9 million by 2030 in the Government's White Paper took that into account. Many of the foreigners would be work permit holders who would be here only if there were jobs to be done, he said.
"If Singaporeans need to have jobs at the top or near the top... then you need a base of people who will do the other jobs. If you don't have a foreign worker population to support the base, how do you become middle management? Who's going to work for you?"
Besides the challenges Singapore faces from its neighbours, the region also presents opportunities, said Mr Shanmugam who is also Foreign Minister.
Talking about an integrated ASEAN, he said that Singapore could aim to be a hub that attracts talent and capital and provides services for the region, as New York does.
The minister was also asked questions by students on the haze, foreign affairs, education, population and freedom of speech.
One student asked to be invited to the next ASEAN ministerial meeting on the haze so he could contribute his ideas.
To that, Mr Shanmugam quipped: "You send me an e-mail setting out what your suggested solution is, and if you can, then I will invite you to the next forum."
How S’pore can grow as hub of integrated ASEAN
By Kok Xing Hui, TODAY, 5 Sep 2013
By Kok Xing Hui, TODAY, 5 Sep 2013
Becoming the New York of an integrated ASEAN region is “a vision that will transcend all the difficulties that we have”, said Law and Foreign Affairs Minister K Shanmugam.
Speaking at a ministerial forum at the Singapore Management University (SMU) last night, Mr Shanmugam said that an integrated ASEAN will have a Gross Domestic Product (GDP) of US$2.2 trillion (S$2.8 trillion), bigger than that of India.
A GDP this size will make ASEAN the ninth-largest economy in the world. As the hub of this region, Singapore will be able to “grow out of your size and … somehow transcend the factors that limit you”, he said.
Mr Shanmugam noted that an economically-integrated ASEAN is “not entirely within our hands” and would depend on the region’s stability.
The minister said Singapore faces the internal challenge of an ageing population as well as the external challenges of an increasingly competitive world fuelled by globalisation and technology.
In 2030, the Republic will have two working adults supporting each senior citizen, compared to the 6:1 ratio right now. At the same time, the increasingly competitive world will see other countries stepping up to offer services in industries key to Singapore, namely aviation, maritime, finance and petrochemical, he noted.
He reiterated the need for foreign workers in Singapore, as the Government plans to increase the ratio of Professionals, Managers, Executives and Technicians (PMETs) to non-PMETs in Singapore from 1:1 to 2:1. “If you don’t have a foreign worker population to support the base, how do you become middle management?” he asked.
The minister also said that while people often compare Singapore to the Nordic countries and Europe where welfare is more extensive, “actually we’re far more socialist that those countries”.
The top 20 per cent of Singaporeans pay 80 per cent of the total income taxes, creating a system which taxes at the top and transfers it out, he said. He also pointed to the Goods and Services Tax, of which 84 per cent is paid for by the top 40 per cent of Singaporeans and foreigners.
After Mr Shanmugam’s one-hour speech on the internal and external challenges facing Singapore and the opportunities present, students posed questions ranging from having more women in Parliament to the projected costs of supporting the aged population in 2030, and ways to change the education system to help Singapore remain competitive.
On having more women in Parliament, the minister said it was not an issue of women not being able to do the job, but that today’s social and family structure makes it “more difficult for them”.
He added that men experience these challenges as well, noting that he would be going to his constituency after the dialogue ended at 9.30pm, before returning home to clear emails around 11.30pm, while having to start early the next morning.
When asked if societal values could change such that students do not “chase grades”, he responded: “My answer to you is if people see that the economy has opportunities outside of being on a very narrow track, then the values will change. So we have to create such an economy.”
Yesterday’s forum was the second one organised by the SMU Apolitical association.
It was attended by almost 300 tertiary students from local universities, junior colleges and polytechnics.
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