Written by Lucas Xi Kun Wang
Over the past 200 years, Singapore has grown to become one of the world's wealthiest nations. With a GDP per capita of USD 88,000, it is among the top five countries globally, but what exactly has made Singapore so successful?
Immigration is an aspect that has played a central role in shaping the journey to a vibrant and prosperous economy. Today, of Singapore’s six million population, roughly 40% are immigrants. The nation’s meritocratic, skill-set-based immigration programs, including the Employment Pass (EP), target professionally trained and highly skilled workers. Encouraging an inflow of diverse skills and talents, helping to strengthen and fill the missing gaps in a range of sectors within Singapore’s economy, from finance and technology to healthcare and engineering. Many EP holders also become permanent residents and citizens. The constant influx of migrants supports Singapore in maintaining a strong labour force, one of the four fundamental factors of production, and meeting the demands of a growing economy.
The impact of immigration extends past labour market dynamics and culturally diverse workforces. Immigration plays a key factor in Singapore’s appeal to multinational corporations. This has been particularly beneficial in attracting Foreign Direct Investment (FDI). According to Singapore’s Economic Development Board (EDB), several multinational corporations have chosen to establish their regional headquarters for Asia Pacific in Singapore due to their strategic location and robust infrastructure. This includes Google, with over 3000 employees, and Thermo-Fisher Scientific, a multi-billion dollar scientific instrument company, with more than 2000 employees.
Much of Singapore’s population growth is contributed by immigration. With the constant inflow of new settlers every year, Singapore also effectively battles socio-economic problems, like the concern over an ageing demographic. At an all-time low fertility rate of 0.97 (children per woman), Singapore is almost 60% below the global average of 2.4. Increasing numbers of young working-age people, therefore, helps to reduce the growth of the age dependency ratio.
However, as a small nation, Singapore must ensure it maintains sustainable rates of immigration. An overflow of migrants could cause strain on public services and give rise to tensions between locals, particularly in terms of employment opportunities. Since 2009, the Singapore government has tightened in on immigration laws and introduced frequent policy updates, aiming to balance economic development with social harmony.
Singapore has made significant progress in terms of nation-building over the past years, with immigrants being a cornerstone in driving economic-growth and shaping the rich cultural diversity. It is therefore difficult to envision Singapore reaching its current global prominence, in both economic and social terms, without the contributions of immigrants. While many challenges remain, the city-state’s ability for adaptation and innovation ensures its role as a model for other nations that are navigating through the complexities of the 21st century.
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