What's the big deal, you say. We are already so crowded! We don't need any immigration. We just want to maintain the true, blue core.
Can we?
Let's take a look at Japan, a country that is very resistant to immigration, where citizenship is based on the principle of jus sanguinis, that is, acquired through shared blood and not by location of birth. Closely associated with this principle are the Japanese theories of ethnic distinction espoused in the nihonjinron literature. Such is the distinction that even Japanese Brazilians who returned to Japan have difficulty integrating because of their cultural differences.
Well, the population of Japan is on the rapid decline and that is a fact. Between 2012 and 2014, it has lost more than half a million people.
In May this year, an interim report released by the Sentakusuru Mirai, or “deciding the future,” panel ( appointed under the cabinet’s Council on Economic and Fiscal Policy), chaired by Japan Chamber of Commerce and Industry head Mimura Akio warned that by 2060, the Japanese population will fall from the current 127 million to 87 million and by 2110, it will be just 43 million, a third of what it is today.
Not only that, 40% of the 87 million will be 65 or older. And 41.3% of the 43 million in 2110 will be 65 and older.
That's an incredible shrinking and hyper-aged population. In fact Unicharm Corp. (8113)’s sales of adult diapers in Japan exceeded those for babies for the first time in 2011. And Japan's total fertility rate at 1.41 births per woman is HIGHER than Singapore's 1.19.
So where are we? Do we have a population so large as Japan as to take comfort in numbers, if at all there is any comfort in numbers?
At our current birth rate and assuming no immigration, by 2050, we will have an inverted population structure, just like Japan, where the proportion of older people will be greater than the proportion of younger people.
The effect of a population decline will be felt in the labour force. That goes without saying. A smaller proportion of younger people means a smaller workforce.
In the case of Japan, the rapid population decline means the size of the workforce will drop by 40% from 65.77 million in 2013 to 37.95 million in 2060 in a worst case scenario. Such a rapid decline in the size of the workforce means that the country will have great difficulty maintaining positive growth as indicated in the report.
Japan is a country that is highly resistant to immigration. The Japan Times reported in 2013 that the percentage of foreign residents is just 1.54% of the population in Japan.
Franco Modigliani won the Nobel Prize in Economics in 1985 for his "Life Cycle Hypothesis" which states that the spending and savings pattern of people are predictable over the course of a lifetime and these patterns are mainly a function of age demographics. In other words, the health and robustness of an economy are determined by age demographics.
More specifically, it means that the basic health of an economy is driven largely by the number of its citizens who are in the peak of their spending years. Countries with a large percentage of elderly people and a small proportion of productive workers will have a smaller productive output and a larger demand for social services. Obviously this will tend to drag down the economy.
Our citizen population today is 3.34 million. With controlled immigration rate, the citizen population is projected to be between 3.6 million and 3.8 million in 2030. This is a projected increase of between 260,000 and 460,000 over a period of 16 years, with the increase coming from BOTH births and new citizens. On average then, the population will increase by around 16,250 and 28,750 per year, assuming linear increase. Do these projected increases look very big to you? The planned intake of new citizens is just about enough to prevent the population from shrinking. Take away the controlled intake of new citizens and where will we be?
Can we be highly resistant to immigration like Japan?
We are 3.34 million. Japan is 127 million. Japan's TFR (total fertility rate) is 1.41 while Singapore's is 1.19. When our population starts to shrink, it will shrink faster than Japan. The Japanese can perhaps settle for 40 million and make do with a much diminished economy and domestic market. Can Singapore settle for a much reduced population and survive on a domestic market?
To believe that we will be different from Japan and we can defy the odds of an ageing and declining population and maintain a true blue core at current birth rates without immigration is like believing that we can defy gravity.
In any case, what is that true blue core?
