Singapore 'will have to ease immigration laws to stay competitive': EIU

Curbs on immigration will hurt business: EIU
Govt will have to lift curbs, given low birth rate and productivity
By Rachel Chang, Assistant Political Editor, The Straits Times, 18 Mar 2015

DESPITE Singapore's moves to tighten immigration in recent years, the Economist Intelligence Unit (EIU) yesterday said it believed the rules would have to be eased in the future for the country to stay economically competitive.

This is because efforts to incentivise family formation and boost productivity among businesses have proved disappointing, the research unit said in a new report.

"In the long run, the changing population profile and the need to remain competitive will lead the Government to ease its immigration laws," said the 10-page special report on the state of affairs in Singapore in its 50th year of independence.

Given low unemployment, continued restrictive labour practices will "hurt business efficiency, as well as Singapore's competitiveness and reputation for openness", it said.

The report, released yesterday, also highlighted the challenge of political succession in Singapore, citing in particular its readiness for a "post-Lee Kuan Yew future".

The EIU noted that the PAP remains popular with the majority as it has managed to deliver "rising prosperity and far-sighted policies".

Overall, the report struck a largely positive note on Singapore's prospects, predicting "the tiny island city-state will retain its allure".

"It will continue to consolidate its position as a financial services hub, enhance its tourism infrastructure, strengthen its manufacturing base, aspire to become Asia's liquefied natural gas hub and deepen its diplomatic engagement."

Sounding an optimistic note, the report said: "Years of prudent policymaking will ensure that Singapore retains its competitive edge and continues to draw business from across the world."

It also pointed to the discrepancy between the "huge majority" of 81 out of 87 seats controlled by the People's Action Party (PAP) and its 60.1 per cent share of the vote at the 2011 General Election. It said that in the long term, the "mismatch" between the PAP's parliamentary dominance and its declining popular support "seems politically unsustainable".

"Besides trying to alter its governing style, the PAP may also support modest electoral reforms, but wholesale changes are unlikely," it said.

Political observer Zulkifli Baharudin yesterday disputed that the "mismatch" between the PAP's parliamentary representation and its share of the popular vote was a pressing concern among Singaporeans.

"It's not the political structure in Singapore that people have issues with, but economic and social issues. They want to know that their views are being heard by the Government," he said.