Silver tsunami & dwindling workforce can destabilise economies, says Lee Yi Shyan
Senior Minister of State for National Development and Trade & Industry Lee Yi-Shyan has painted a sobering picture of an ageing population and shrinking workforce.
Speaking in Parliament on the Population White Paper and Land Use Plan, Mr Lee pointed to the experience of Asian neighbours like Japan and Taiwan as examples of how the silver tsunami and dwindling workforce can destabilise economies.
Mr Lee said low fertility and a lack of immigration have caused the Japanese workforce to shrink since 1996.
Declining population and workforce means less consumption, and reduced demand for real estate.
Land and property prices in Japan have fallen by more than half since the peak in the 1990s, evaporating the life-long savings of many individuals and corporations.
He said the Japanese government has so far resorted to domestic borrowing to finance its social expenditure.
Now, its public debt has risen to 220 per cent of GDP.
And there are going to be fewer younger people and profitable Japanese companies to tax and borrow from.
As to why it didnt increase its working population to maintain a vibrant economy, Mr Lee said Japan couldn't build a concensus to allow immigration to boost its workforce.
Turning to Singapore, Mr Lee questioned if the young would find the heavy burden of supporting a larger pool of seniors physically and financially unbearable.
Would this be sustainable with an old-age support ratio shrinking to 2.1 in 2030?
To make things worse, Mr Lee said competition for talent would intensify.
Mr Lee also cited China and Taiwan as examples as to why it makes sense for Singapore to maintain a sustainable and stable population while it's still young and external conditions are favourable.