The potential growth rate of an economy depends on a number of factors. It depends on land, manpower, capital and knowhow. Growth in land can be achieved by more efficient use of the available stock. Singapore has a very defined constraint on land. Growth in capital is achieved by investment. Growth in manpower can be achieved internally or through immigration. Internal growth is something that is accelerated or decelerated very slowly, as we learnt in the 1970’s then in the 1980’s. Immigration is a quicker way of speeding up or slowing down growth in manpower. Growth in knowhow comes from investing in education, can be imported, or comes through investing in R&D.
Let’s look at growth in manpower through immigration. Let’s assume that we have optimised growth in all other areas. Growth through immigration is tricky. Singapore has limited land. To house 8 million, yes, 8 million, not 6.5 million people, will be difficult. But not impossible. Moving these people around, getting them from home to work, from work to play, this will require a feat of infrastructure development.
Less obviously, immigration imports cultural and social issues that are unpredictable. Importing people from abroad, however much intellectual or financial capital they bring, means opening up Singapore, potentially to an electorate, and if not an electorate then a population of stakeholders, unused to our unique style of democracy and social organization.