Singapore's PM wants even more babies

SINGAPORE - Singapore Prime Minister Lee Hsien Loong has urged the nation to produce larger families and accept more immigrants to maintain economic growth, warning that the city-state's shrinking population presents a "major problem".

"To sustain our growth and prosperity, we need to have enough people living and working in Singapore," Lee, 54, said in a national-day speech on Sunday. He said he wants overseas Singaporeans to come home and called on older workers to retrain to take on manufacturing jobs.

Singapore, which has suffered three recessions since 1998, needs foreign manpower to fill posts created by the longest period of expansion in more than five years. The city should grow while it can, because an oil crisis would send energy prices soaring and put the economy into reverse, Lee said.

"It's quite an issue because we do have an ageing population," said Joseph Tan, an economist at Standard Chartered Bank in Singapore. "If you're not generating skilled people to take up the jobs, Singaporeans shouldn't get too hung up about foreigners coming in."

The number of Singaporeans over 65 will treble to 900,000 in 2030, when one in five will be past that age, Minister for National Development Mah Bow Tan said last week.

Singapore's S$193 billion ($192 billion) economy, Southeast Asia's fourth largest, grew at an annual 3 per cent pace in the three months ended June, the fifth quarter of expansion. The economy is likely to expand between 6.5 per cent and 7.5 per cent this year, the Government said this month.

Still, couples in the city can't reproduce fast enough to maintain the 4.3 million-strong population. Singapore, which needs to produce at least 50,000 babies a year, managed only 36,000 last year, Lee said.

"We must encourage families to have more children and also attract more new immigrants here," he said. Lee's invitation to former Singapore residents to return to the island state may be a reconciliation with those labelled "quitters" by former Prime Minister Goh Chok Tong.

In a speech in August 2002, Goh said "fair-weather Singaporeans will run away whenever the country runs into stormy weather. I call them 'quitters'. Fortunately, quitters are in the minority."

Lee, the son of Lee Kuan Yew, the founder of modern Singapore, said that Hong Kong, with a population of 7 million, was a more "vibrant" location than Singapore and had thriving retail and service industries.

Singapore is seeking more residents after creating 81,500 new jobs in the first half of this year, compared with 113,300 in all of last year. Older workers should retrain while the economy offers them the chance, Lee said. When the next crisis hits, it may be harder for them to find work, he said.

The war between Israel and Hizbollah in Lebanon drove oil prices up and raised electricity prices and bus fares in Singapore. Crude may climb to US$150 "if there is a blow-up," Lee said.

Lee's People's Action Party, which extended its 47-year rule at elections in May, has transformed Singapore from a trading outpost with no natural resources into the region's second-richest population by wooing investments from semiconductor makers.

Lee is trying to double visitors and triple tourist revenue by 2015.

Next month, Singapore will host the annual meetings of the IMF and World Bank, which are expected to draw 16,000 overseas delegates, including 400 finance ministers and central bank governors.

- BLOOMBERG