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Singapore Accepts Slower Growth

Friday, June 06 08:19:12

Singapore is willing to accept slower growth as a trade-off for social stability as it aims to keep down the number of foreigners working in the city-state, Finance Minister Tharman Shanmugaratnam told Reuters.

Over the past decade, Singapore's economy has expanded by a 6.4 percent annual average. Tharman said that he would be happy if Singapore grew 3 percent a year, as long as growth was driven mainly by gains in productivity.

"Three percent growth is good growth," he said during an interview on Thursday.

High past growth has brought rising numbers of foreigners to work in wealthy Singapore, which in turn has spurred discontent among citizens angered by the strains put on infrastructure and services.

Between 2000 and 2013, Singapore's population rose to 5.4 million from 4 million, with foreigners accounting for the bulk of the 35 percent increase.

Unhappiness about inflows of foreigners helped an opposition party gain ground in the 2011 general elections as the People's Action Party, which has ruled Singapore since independence in 1965, won only 60 percent of votes, its worst showing to date. The next election must be held by January 2017.

Tharman, who is also a deputy prime minister, said the government accepts a slower growth rate as the cost of ensuring the country retains its national identity, combats over-crowding and keeps the ratio of foreign to local workers at around one-third.

"We are never going to be Dubai, we are a country with a social ethos that we take very seriously," the 57-year-old finance minister said.

The number of foreigners in Dubai is larger than that of locals, a result of its aggressive economic growth strategy.

At the end of 2013, there were 1.32 million foreigners in Singapore who held employment or work-passes, around 38 percent of the total work-force.

In 2010, Singapore launched a 10-year plan to restructure its economy, aiming to increase productivity and cap the ratio of foreigners in the workforce at around one-third. The plan aimed to raise the productivity rate by an average of 2 to 3 percent a year, though it actually fell in 2012 and 2013.

In line with the plan, the government has imposed regulations to curb hiring of overseas workers in some sectors. (Reuters)