Foreign labour critical for S'pore
There are limits to the growth of the local workforce in Singapore, and this will in turn hold back economic growth for the country unless foreign workers continue to be allowed in, the Ministry of Trade and Industry (MTI) has warned.
Its occasional paper, released this week, follows the National Population and Talent Division’s July paper on population issues.
“What we’re trying to do in this occasional paper is focus on the trade-off, or the relationship between population and economy,” Minister for Trade and Industry Lim Hng Kiang told reporters ahead of the release yesterday. According to the MTI paper, the local workforce will start to shrink in eight years, or 2020. This is because the number of working-age Singaporeans exiting the workforce will exceed those entering it.
One way to solve the problem is to get more locals to enter the workforce. A rise of one percentage point in the resident labour force participation rate – which is the proportion of working-age locals in jobs or looking for jobs – would add 30,000 workers.
But this cannot go on indefinitely, said MTI. Of local working-age men, for example, 92.1 per cent are already in the workforce – one of the highest participation rates in the world.
Moreover, Singapore’s population is ageing, added the ministry. If not managed well, this could lead to lower innovation and productivity.
MTI also pointed out in its paper that the problem of how to deal with an ageing and shrinking workforce was not unique to Singapore. Germany is trying to attract skilled foreign workers and Japan is looking to relax foreign worker policy.
