Asia’s demographics make foreign workers critical

For Asia’s most prosperous societies, Covid-19 has exposed a big vulnerability: People simply aren’t having enough babies to replenish their aging populations. It’s foreign workers that make these countries function.
That’s why pulling up the drawbridge to halt further spread of the disease and protect domestic businesses would be perilous. Even Japan and South Korea, often seen as hostile to outsiders, have been coming to terms with their reliance on employees from abroad in recent years. In Singapore, long open to immigration, foreigners make up about a third of the workforce, be they be bankers, kitchen staff, bus drivers or mail handlers.
Not only is the region’s economic health at stake, but also its legacy as a big winner of globalisation over the past few decades. The International Monetary Fund forecasts global gross domestic product will shrink 3% this year, easily exceeding the decline of 2009. Trade, the lifeblood of many Asian economies, will fall 11%. Growth in this engine of world commerce would sputter without immigration.
Fertility statistics across the region are grim. In Singapore, the number of children per woman sank to a record low 1.14 in 2018. Korea’s rate recently slipped below 1, the lowest in the Organization for Economic Cooperation and Development. Japan is at 1.4; Hong Kong at 1.3 and Taiwan at about 1. The rate at which a population can replace itself is 2.1.
Singapore has worked hard over the past two decades to encourage couples to have more children, introducing measures such as paid maternity leave, childcare subsidies, tax breaks and one-time cash gifts. The government also picks up most of the tab for in vitro fertilisation treatment. Live-in nannies, many of whom are Filipino and Indonesian, provide affordable and readily available help. Yet the fertility rate has remained stubbornly low, as Poh Lin Tan of the National University of Singapore wrote here.
Now, this demographic hurdle is colliding with the coronavirus. While the country won early plaudits for efforts to contain the pandemic, infections have more than trebled since the start of April to 3,699 as of April 15. Many of the new cases are linked to dormitories housing foreign workers.
Until Covid-19 struck, more than 200,000 low-wage migrants — almost 4% of the population — lived in 43 dormitories, many of which were overcrowded. In one, workers said rooms were infested with cockroaches, rubbish was piling up and toilets were overflowing, the Straits Times reported.
These workers make Singapore tick, serving in key industries like construction, logistics and transportation. At least 15 of their housing units have been identified as virus clusters and eight have been declared isolation areas, the Straits Times reported. In an effort to contain the outbreak, the government has shifted some essential employees to offsite facilities, including repurposed hotels, convention centers and military barracks. Officials are increasing testing and warned that infections may rise further.
The government has stressed it will take care of foreign workers, improve hygiene where they live and appreciates their contribution to the local economy.
—Bloomberg

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies.
Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America