Tiny Singapore risks economic gloom without big baby boom

SINGAPORE Thu Aug 30, 2012 5:12pm EDT

1 of 2. Babies lie in cots at a maternity ward in Singapore in this March 29, 2007 file photo.

Credit: Reuters/Vivek Prakash/Files

SINGAPORE (Reuters) - History suggests Singapore will enjoy a welcome baby boom in this Year of the Dragon, the most auspicious for births in the Chinese zodiac.

But after 25 years of state-sponsored matchmaking and fertility-boosting campaigns, the government's attempts to arrest a sliding birth rate are falling flat, with potentially profound consequences for the wealthy Asian city-state.

The calls to conception are now urgent and constant to citizens whose fertility ranks last among 222 nations in the U.S. Central Intelligence Agency's World Factbook.

Faced with dismal statistics like that, the government has begun a review of population and immigration policy and says it plans new measures to encourage births by the time it publishes the results of its consultation early next year.

The message to have more babies is all the more pressing as resentment builds over an influx of foreigners who now make up more than a third of the population of 5.2 million, a factor that is eroding support for the long-ruling People's Action Party.

"We have a problem. The long-term trend is down but we cannot give up," Prime Minister Lee Hsien Loong said in a speech on Sunday about the nation's future. "We need to create the right environment, the right social environment, the right ethos so that Singaporeans want to settle down and have kids."

Social and economic engineering is nothing new in Singapore, where a firm government hand helped to steer a small island with no natural resources into one of the world's most affluent countries in a little over a generation.

But the relentless drop in the birth rate reveals the limits of that influence in what has been described as a "nanny state".

For a global trade and financial center like Singapore, its extremely low fertility rate has implications for economic growth, tax revenues, healthcare costs and immigration policy as the number of elderly people looks set to triple by 2030.

There are now 6.3 Singaporeans of working age for every senior citizen. By 2030, the ratio will be closer to 2:1.

At current levels, the birth rate implies that the local population will fall by half within a generation, said Sanjeev Sanyal, a Singapore-based global strategist at Deutsche Bank.

"Even to attract a pipeline of good quality foreign talent, you need socio-political continuity and stability that can only be provided by a robust anchor population," he said.

WORK/LIFE BALANCE

If there were any doubts about the government's blatant message, the mint maker Mentos put out an advertisement urging married Singaporeans to do their civic duty on the evening of the August 9 National Day festivities.

"I'm talking about making a baby, baby," went the video's rapped lyrics, accompanied by hip-thrusting animated hearts. "It's National Night, let's make Singapore's birthrate spike."

Not long ago, Singapore had the opposite problem.

From the mid-1960s, with post-war baby boomers hitting child-bearing age, the fears were that a population surge would threaten the development of the newly independent nation.

With the slogan "Stop at two", the government penalized big families, legalized abortion and rewarded sterilization. It was so effective that, by 1987, the policy was reversed and the slogan became "Have three or more if you can afford it".

Conspiring against more births are powerful contraceptives in the form of intense career pressure, long work hours, small apartments, waiting lists for nursery care and soaring prices.

"Work/life balance is what everybody's after," said Evonne, a marketing professional in her 30s, adding she and her husband plan to have one child. "If you don't want kids, no matter what the government throws at you, I don't think you really care."

The 2010 census showed Singaporeans are marrying later than a decade earlier. In the age group 30-34, a key time for career, 43 percent of men and 31 percent of women were not married.

For women in their 40s who were or had been married, those with only one child rose to 19 percent from 15 percent.

The issue is acute for the ethnic Chinese who make up 74 percent of Singapore's citizens and permanent residents, a majority that has ebbed from nearly 78 percent in 1990. Statistics show ethnic Chinese are having fewer babies than the Malay and Indian communities and are more likely to be single.

Officials have sought to balance the call for more children with a message that the country must remain open to immigration to provide the labor and expertise needed for future growth.

Not all are convinced, as many Internet posts show.

Gilbert Goh, who runs a support group, Transitioning, for the unemployed, decried "relentless messages sent out by the government to accept foreigners" because of the low birth rate.

"Besides seemingly solving the whole birth rate issue here for our government, foreigners also are brought in to solve a bigger issue for employers -- cheap hard-working labor," he wrote on his website.

Simmering anger over immigration is widely believed to have contributed to the People's Action Party's unexpected loss of seats in last year's parliamentary elections.

SINGAPORE "WILL FOLD UP"

Saying it recognizes concerns about jobs, living standards and social cohesion, the government has put tighter controls on the number of foreigners it lets in, particularly lower-skilled and lower-wage workers.

In July, it put out a paper for public input on ways to encourage Singaporeans to marry and have families as part of its review of population and immigration policy.

The paper -- "Our Population Our Future" -- set out a troubling scenario for an ageing society if birth trends persist, including a less vibrant economy, an exodus of major companies and a shrinking number of workers and consumers.

To encourage parenthood, the government gives out baby bonuses of up to S$4,000 ($3,200) for each of the first two children, rising to S$6,000 for the third and fourth. It also matches deposits made into a Child Development Account.

The Social Development Network, part of a government agency, offers free romantic advice by its "Dr Love" and oversees the activities of private dating agencies.

To reverse the trend, Lee said on Sunday, changes in social and workplace attitudes are needed, along with more support for families with housing and affordable, accessible childcare.

If women were having at least two children, that would mean a rise in the population. But at a fertility rate of 0.78, according to the CIA, the number of Singaporeans is waning.

The government has different data showing women, on average, giving birth to 1.2 babies in a lifetime -- down from 1.87 in 1990 and 1.42 in 2001 and far below the replacement rate.

The city-state is not alone. Hong Kong, Taiwan and South Korea also have very low fertility rates and many of the same cost, space and career pressures.

Among Southeast Asian neighbors, Thailand's fertility rate of 1.66 is below replacement but the populations are growing in Indonesia (2.23), Malaysia (2.64) and the Philippines (3.15).

Lee Kuan Yew, the country's founding leader and father of the current prime minister, warned in August that Singapore "will fold up" unless it reverses the drop in the birth rate.

"Do we want to replace ourselves or do we want to shrink and get older and be replaced by migrants and work permit holders?" said Lee, who launched the "Stop at two" campaign in 1966.

Some hope for a zodiac-linked baby boom that is borne out by government figures. Births rose in previous Dragon years in 1976, 1988 and 2000, but those were only minor spikes in a steady decline in Singapore's fertility rate from 3.07 in 1970.

The government is promising new measures to encourage births and help families but unless career and cost pressures change dramatically, there may be little effect.

"Can Singaporeans be persuaded to have more children?" was the survey question during a recent television panel discussion on the birth rate. Channel News Asia's telephone poll may not have been completely scientific, but the answer was clear -- a resounding 74 percent of respondents said "no".

($1 = S$1.25)

(Editing by Jason Szep and Nick Macfie)

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