Why Singapore Needs More Babies

Bigger baby bonus, longer maternity leave and higher tax relief. These are some of the new and improved measures designed by the Singapore government to tackle the plunging birth rate. The issue received extensive media coverage and Singaporeans gave mixed opinions regarding the solutions proposed. So why the huge fuss? I will explain two critical reasons in this post - economic and social.

Singapore is facing an ageing population now. In about ten to twenty years time, many workers will reach the retirement age. A fresh group of workers are needed to occupy the vacant job positions. Furthermore, companies and factories located in Singapore rely heavily on the country's manpower. The economy will slow down if there is a shortage of skilled labour supply in the future. Since the population is mainly made up the white-haired (in the future) who depend on their Central Provident Fund (CPF) balance, the demand for goods will start to decline. They are most likely to save for the future, then use it to purchase goods. An economic slowdown begins.

Besides this, Singapore is also an export-driven economy. This means that the country depends on foreign countries to exports its locally-produced goods to drive the economy. Many companies outsource to Singapore due its pro-business environment and skilled workforce. Without the next generation of young workers, the factories in Singapore may suffer a low productivity rate. The older workers are not skilled enough to use the new and advanced technologies invented in order to increase productivity. The producers need fresh graduates who are ready for work. Retraining can help solve this problem, but the costs incurred are just too costly for small or private firms. With low birth rates, a shortage of skilled labour emerges and factories may start looking elsewhere for the better and more productive workers. Producers are not able to enjoy economies of scale and cut costs, leading to high prices. Singapore will find it more difficult to compete in the global market. If this situation do happen, the country's export-driven economy suffers and the balance of trade continues to deteriorate.

Social reasons are also contributing factors that push the government to solve the low birth rate problem fast. Singapore's population may fall tremendously if the birth rate continues to go south. However, the economy needs to be continuously fuelled with productive workers. Thus, the government may have to turn their heads to immigration. So what is the problem with immigration? The government struggled to maintain racial harmony during its first years of independence with the presence of racial riots and more. It is still improving its legislation to suit the cultures and beliefs of the three main races here - Chinese, Malay and Indian. Our leaders consistently remind us not to take the current racial harmony for granted; instead, we must put every effort to strengthen it.

An exodus of foreign workers to Singapore may complicate things here. For example, the Westerners are generally more open to racism. Racism is widespread in many Western countries which still practice complete freedom of speech and expression. They may bring along the culture into Singapore and perhaps challenge the legislation here. For example, anti-Muslim sentiments are still prevalent in Australia, especially among the youngsters. If the foreigners come with their families into Singapore, the intolerant behaviours may also be imported into the island. Preserving racial harmony may get more complicated than ever.


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