Immigration surge is no solution to population ageing

Tan Jee Say says relying on immigrant numbers to reverse population ageing, as Singapore proposes, is a poor solution. Hong Kong has got it right by seeking growth elsewhere

PUBLISHED : Saturday, 30 March, 2013, 12:00am
UPDATED : Saturday, 30 March, 2013, 3:30am

The inter-relationships of population, economic growth and quality of life have aroused intense debate as cities compete with each other to become mega cities. But this rush is taking place at a time when societies are not ready for it. I know this personally, as I spoke only a month ago at a public protest rally in my own country against a proposed population increase of 30 per cent, most of whom would be immigrants.

It was Singapore's largest protest gathering, of about 4,000 to 5,000, very small by Hong Kong standards but huge by the standards of Singapore's post-independence history. The event was particularly newsworthy, given Singaporeans' well-known reputation as a docile people. But Singaporeans are no longer docile.

There is only so much you can do to people. When you not only squeeze their pockets and violate their physical space, but also deprive them of their sense of identity, you must expect a strong response. If such a policy were to be pushed through anywhere else, the reaction from the people would be monumental. Hong Kong's streets would easily see a turnout of half a million. In mainland China, it might even spark another cultural revolution.

But there is really no need for people in mainland China and Hong Kong to take to the streets. Your planners have a more sensible approach to solving the twin problems of an ageing population and a low fertility rate - by tackling the root causes. Instead of increasing the population substantially with young immigrants, Hong Kong has taken the opposite attitude of restraint.

It is fixing its basic infrastructure, which has come under severe strain with an influx of 34 million mainland tourists a year. Simultaneously, it is pushing its economic frontier outwards by integrating more deeply with southern China so as to reduce the pressure on the city's infrastructure.

As for the problem of ageing, I am sure mainland women will continue to deliver babies in Hong Kong and if the babies make Hong Kong their permanent home when they grow up, particularly those with Hong Kong residents as fathers, they will keep the population young.

Mainland China goes further than Hong Kong's restraint, with its one-child policy. But it has become too successful and, if it continues, will worsen the problem of population ageing. Why are the Chinese authorities not abolishing it? I believe that, like Hong Kong, mainland China wants to improve its infrastructure first.

The flow of migrant workers into the cities is straining the existing infrastructure. One solution is to reverse the flow of migrants, but infrastructure in the countryside is not ready. The situation is further complicated by the hukou system. The longer-term solution is to expand the economic frontier, like Hong Kong, far beyond the big cities. The sooner this succeeds, the earlier the one-child policy can be relaxed further. Then China can even reverse its population ageing and low fertility.

Political leaders have always been obsessed with population numbers. There is a verse in the Bible, "in the multitude of people is the king's honour, but in the want of people is the destruction of the prince". Huge populations are a symbol of power. Rulers can raise large armies to subjugate their enemies. Today, wars are no longer necessary to salvage food and other resources from foreign territories.

But "wars" have not ended; they have taken a new form in domestic battles between political parties contesting for power. They come in the flow of immigrants who can vote once they become citizens. They tend to vote for the government of the day. In the run-up to the presidential election in the US, large numbers of Asian and Hispanic immigrants were registered as voters.

In Singapore, the 130,000 people who became new citizens since 2001 voted in the 2011 general election, representing 6.3 per cent of the total vote. Obviously, the authorities see in this multitude of new citizens the preservation of their power!

A multitude of people is also a source of economic power. It helps boost gross domestic product growth. But an increase in the workforce depresses wages unless they are held up by a minimum wage. Mainland China and Hong Kong have a minimum wage regime, but not Singapore. That's why wages of low-income workers in Singapore have gone down, widening the income gap between rich and poor.

In a market economy, able workers will be hugely rewarded, leaving behind an underclass that needs help to cope with the pressures of life. There must be a robust safety net that will give them a decent living wage and free or cheap access to health care, education and transport. The key to sustaining this overall package is productivity growth, not an increase in immigrant workers.

Over time, too many old people and too few babies will lead to a population decline. The solution is to raise the birth rate aggressively. We have to give all the incentives that women need to have more babies. They must have confidence in the future for themselves and their children to grow up in stable and financially secure families. Can the world afford it? It can if it sets its mind to it. Many countries have shown that with the right package of benefits in place, they can raise their fertility rate to replacement or near replacement rate.

When he was officially appointed China's new president recently, Xi Jinping spoke of his China dream and a renaissance of the Chinese nation with a higher standard of living. By improving China's infrastructure and expanding the economic frontier far beyond the big cities, he will raise the standard of living substantially in due course.

Together with a generous package of family allowances, this will instil confidence in people to have bigger families. A confident, strong and peaceful China will be good for the world. I wish the president and the Chinese people early success in achieving their China dream.

Tan Jee Say is an opposition politician in Singapore who contested the general and presidential elections of 2011. He was previously a senior civil servant, banker and fund manager. This is an edited excerpt from his lecture at Peking University HSBC Business School last Monday