Yahoo! Newsroom – 1 Mar 2013
An economics professor has spoken up to dispel what he perceives to be misconceptions on immigration and Singapore having a bigger population.
Among these, says Nanyang Technological University’s Winsemius Chair Professor of Economics Ng Yew Kwang, are the ones that make people oppose the idea of a larger population for Singapore — congestion, as well as the depletion of existing resources and the crowding out of locals.
“These views are largely based on fallacies, on mistaken ideas,” said Ng, who spoke as a panellist on Thursday evening at a forum by the Economic Society of Singapore on the government’s new budget.
“When you are in a crowded MRT or congested on the road, it’s natural to say that if the number of cars is halved, if the number of passengers is halved, then how nice would it be,” he said.
“So people then blame congestion... this is mistaken. I think we should also think, if each person pays the same tax, same amount to spend on the road, if we halve the number of people, then the width of the road will probably also be halved, then you’re going to have more congestion, not less.
“And with half the number of people, you can’t have so many MRT routes, and the number of bus frequencies would also be very small,” he added.
Turning to capital investment and resources, Ng argued that development and technological advancement is more likely to take place in a densely-populated city, as opposed to the sparsely-populated countryside.
“And on the same earth, is it the sparsely-populated Africa or the most densely-populated continent Europe that has higher per capita income? And the spectacular scientific and technological advancements and the industrial revolution, did it take place in sparse Africa or did it take place in the densely populated Western Europe? So the anti-population (argument) is fallacious.”
Turning to the argument that a country’s per capita resources decrease with a larger population, Ng responded that immigrants “cannot take away the resources that are owned by Singaporeans and the Singapore government without payment”.
“In fact, with more people coming in, the higher demand pushes up the prices of things owned by locals, and pushes down the input price of immigrants, and make locals better off. Seen in another way, with more people coming in, the local people have more people to cooperate, supplement them and increase their productivity — this is true even in the absence of economies of scale and in the presence of pollution and congestion,” he added.
Therefore, said Ng, the intensified measures to curb the influx of foreign workers in this year’s budget are “not only bad for Singapore but also bad for Singaporeans”.
“It’s like a tax on imports of services, and this is against free trade, which is good for Singapore,” he explained, adding that even though his view is very unpopular he felt he had to say it “because it is the correct view”.
Asked later on about the negative impact of lower-skilled foreign workers crowding out lower-income Singaporeans who compete for the same jobs, Ng acknowledged this, but maintained that the overall impact for Singaporeans as a whole is still a good one.
“If you have immigration of low-skilled workers then it’s good for Singaporeans as a whole, but it’s bad for unskilled Singaporeans because it depresses the wage rates,” he said. “Then it may be bad in terms of happiness and welfare terms. I’m still in favour of an immigration policy, but then it has to be supplemented by help to the poor.”
Ng said he would elaborate further on his views at the ESS’s next forum on Monday, where he will join other panellists to discuss the government’s controversial population white paper.
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