Benjamin Mak and Thng Yi Ren - Economic Society of Singapore

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Chart 2 This diagram shows a time-series correlation between rising immigration and labour productivity in Singapore. By fuelling growth through productivity while still promoting selective immigration, we can simultaneously improve the quantity and quality of factors of production, pushing Singapore‟s production possibilities frontier (PPF) outward, as seen in Chart 3. The outward shift of our PPF is likely to be significant because productivity increases in Europe have led to growth that is almost equal to that produced by factor accumulation in the past, as shown in Chart 4. Chart 3 This graph shows the change in Singapore‟s PPF with selective immigration and higher productivity. 8
Chart 4 This illustrates the extent of growth originating from factor accumulation and productivity gains witnessed in European businesses 18 . With greater labour mobility and productivity, Singapore companies will be well-placed to develop external wings reliant on the expertise of Singaporean labour and capital to succeed. The Government should support such efforts if it is serious about raising Singapore‟s growth in terms of Gross National Product which includes Net Factor Income from Abroad 19 , rather than merely in terms of GDP which has necessitated ever-increasing immigration. Although schemes like the “Loan Insurance Scheme (LIS)” 20 already help some firms get trade financing, the introduction of Singapore‟s own export-import (Ex-Im) bank would do much to further this goal. As an independent institution, it would facilitate „cross border financing‟ 21 and ease credit transfer for daily transactions for all firms. This is far more systematised compared to the status quo, where there are lags between the firm‟s application for and receipt of funding. While the Government now opposes an Ex-Im bank because of „insufficient economies of scale‟ 22 , this is outweighed by the structural advantages it possesses. Centrally, it is an „umbrella 18 Saari (2006). 19 A focus on GNP growth has already been made strongly by Singapore‟s Prime Minister Lee Hsien Loong since early 2010. See Popatlal (2010). 20 See Huang (2010). 21 Ibid., 22 See Huang (2011). 9
Page 1 and 2: "A New Nation of Immigrants Challen
Page 3 and 4: Introduction ‘The most superficia
Page 5 and 6: Myth 2: Foreigners steal Singaporea
Page 7: Strategies for the long run Perhaps
Page 11 and 12: Final thoughts Immigration looks se
Page 13 and 14: —. Study to set up possible expor

Benjamin Mak and Thng Yi Ren - Economic Society of Singapore

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