Bloomberg, 15 Feb 2013Singapore may well serve as a case study for what happens when leaders try to offset slowing economic growth with immigration and increased birth rates. There are lessons that Japan or Italy would do well to study. All of it is turning into a political liability for Lee, the son of Lee Kuan Yew, who is regarded as the father of modern Singapore.
The real question, as public angst rises, is whether the opposition is justified. Former United Nations demographer Joseph Chamie says it is. To Chamie, the view that it’s almost always better to have more and more people is the human equivalent of what Bernard Madoff did with money, something he calls “Ponzi demography.”
The human-pyramid scheme works like this: Population growth, either through births or immigration, boosts demand for goods and services, increases borrowing, boosts tax revenue and adds to corporate profits. Everything seems grand and leaders take a bow. It’s a bubble, though, and it eventually bursts when population growth stalls. Incomes top out, high debt crushes consumption and investment, the need for public assistance rises, environmental degradation increases and angry people take to the streets.
As households are left to pick up the tab once Ponzi demography runs its course, government leaders issue dire warnings about economic decline if the flow of fresh talent stops. This will sound familiar to Singaporeans as Lee’s People’s Action Party sketches out a dystopian future without adding wealthy bankers and low-income workers to the nation’s ranks. Full story
