Jan. 29 (Bloomberg) -- Singapore said it will boost its population by as much as 30 percent by 2030 with more foreigners in the country as it competes with other Asian nations that have younger labor forces.
The island’s population may reach as much as 6 million in 2020 from 5.3 million now, and the number of people in the country smaller than New York City may increase to 6.9 million by 2030, the government said in a white paper released today. Gross domestic product growth may average 3 percent to 4 percent annually up to 2020, and the economy may expand 2 percent to 3 percent a year in the following decade, it said.
Record-high housing and transport costs, public discontent over an influx of foreigners and infrastructure strains are weakening approval for the only party that has ruled Singapore since independence in 1965. Prime Minister Lee Hsien Loong’s government is under pressure to placate voters without disrupting the entry of talent and labor that helped forge the only advanced economy in Southeast Asia.
“Our population and workforce must support a dynamic economy that can steadily create good jobs and opportunities,” according to the report published by the National Population and Talent Division. “Many Asian cities are modernizing rapidly, and catching up. Singapore must continue to develop and upgrade to remain a key node in the network of global cities.”
The island’s population has jumped by more than 1.1 million since mid-2004, stoking social tensions as the government used immigration to make up for a low birth rate. The fertility rate was about 1.3 children per woman in 2012, and the government said today it doesn’t expect an improvement to replacement levels of 2.1 in the short term.
The government will take in between 15,000 and 25,000 new citizens and grant about 30,000 permanent-resident permits annually, it said today in the white paper called “A Sustainable Population for a Dynamic Singapore.”
“Our dependence on foreign workers is not going to be an issue that is going to be solved overnight,” said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. “It’s a multi-year process and the government should push ahead in order to make a clear stance to businesses that there’s no U-turn when it comes to the foreign worker policies.”
Ranked the easiest place to do business for seven straight years by the World Bank, Singapore is competing with lower-cost neighbors such as Malaysia and Indonesia for foreign investment as an uneven global recovery hurts demand for exports.
The government is trying to reduce the island’s reliance on cheap labor and has raised foreign-worker levies and salary thresholds to slow the inflow of non-Singaporeans. The overseas labor clampdown has pushed up manpower costs and driven the jobless rate to a six-quarter low.
The growth rate of Singapore’s workforce will slow to 1 percent to 2 percent a year through 2020, from an average 3.3 percent in the past three decades, today’s report showed.
The government “paid a political price” with the strains on its infrastructure as a result of a bigger population, Lee said yesterday. His party lost two by-elections after returning to power in May 2011 with the lowest share of the popular vote since independence.
The government will add new trains to the subway fleet from 2014 to 2016, it said today. It is also investing in two new rail lines and extending three existing ones, it said.
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