[SINGAPORE] Singapore's population will reach a significant turning point this year: the first cohort of baby-boomers - those born between 1947 and 1965 - will turn 65 and start retiring.

This will pile considerable pressure on the working population and have stark implications for businesses as the country stares at a scenario where more people leave the workforce than enter it.

That's why Singapore may need between 20,000 and 25,000 new citizens every year from now until 2025 if it is to keep its citizen population size stable and mitigate the impact of an ageing population and low fertility rate.

But even with a large number of new citizens coming in, the number of working-age Singaporeans supporting each elderly citizen (the so-called old-age support ratio) could still fall dramatically if the country's fertility rate does not rise.

An Occasional Paper released by the National Population and Talent Division (NPTD) yesterday highlighted that the key factors that determine Singapore's citizen population demography are its total fertility rate (TFR), life expectancy and migration.

Based on these variables, the paper modelled the Singapore citizen population under five scenarios, A to E - ranging from a hypothetical Singapore where the TFR is at the desired replacement level of 2.1 and with no immigration, while the next four scenarios assume the current level of TFR of 1.2 with varying immigration levels at zero, 15,000, 20,000 and 25,000.

Under scenario B, where there is no immigration at the current TFR, Singapore citizen deaths will exceed births by around 2025 plunging the country's citizen population into a decline, the paper noted. Further, a longer life expectancy here means that Singapore's citizen population is ageing and its median age will increase from 39 years in 2011 to 45 by 2025.

Then there is the baby- boomer factor. As the first cohort starts retiring in 2012, the citizen workforce will start to shrink. By 2020, there will be more people exiting the work age band of 20 to 64 years than entering it.

The paper pointed out the severity of this problem as the ratio of citizens entering the workforce to those exiting it is expected to shrink from 2.2:1 now to 0.7:1 by 2020, reflecting a significant decline. This translates to a total of 900,000 people leaving the workforce in 2030 compared to the 340,000 in 2011 - a more than 2.5 times increase - and 1.87 million working-age citizens left in 2030 compared to the 2.12 million last year.

This creates enormous pressure on the workforce in 2030 to support the aged population. Under scenario B, the number of working- age Singaporeans needed to support one elderly citizen declines dramatically from 6.3 in 2011 to 2.1 in 2030.

Under scenarios C, D and E (which assume immigration of new citizens at 15,000, 20,000 and 25,000 respectively), the decline of old-age support ratio is mitigated slightly but still experiences a more than half decline in the best-case scenario. With as many as 25,000 new citizens being added in scenario E (the largest projected intake in this modelling exercise), the old-age support ratio still declines substantially to 2.4 by 2030, reflecting the possibility that other factors such as birth rates and employment for older aged Singaporeans will need to play a more critical role than they currently do if the burden on future workforces is to be reduced further.

Nevertheless, the paper shows that the entry of new citizens into Singapore will supplement the shortfall in births and mitigates the decline in population, while also slowing down the decline in the pool of working-age citizens while slowing down the rate of ageing.

From 2007 to 2011, Singapore granted between 17,000 and 21,000 new citizenships. According to an NPTD spokesman, the majority of new citizens from 2001 to 2010 were from Asia, with 49.4 per cent from Southeast Asia and 42.1 per cent from other parts of Asia. The remaining 8.5 per cent comprised new citizens from other regions such as the Americas, Oceania and Europe.

"We will continue to ensure that we take in immigrants who are of good quality and able to integrate well into our society. We assess applications holistically on a set of criteria that includes the applicants' family ties to Singaporeans, economic contributions, qualifications, age, family profile, length of stay in Singapore, and their commitment to sinking roots in Singapore," the spokesman said.

These criteria are reflected in the citizenship selection process thus far as from 2005 to 2010, about 55 per cent of new citizens were aged 30 years and below while 73 per cent naturalised within 10 years after the issue of their first long-term pass.

The release of this paper informally kick-starts discussion on Singapore's population that is expected to feature prominently this year.

"As announced by Deputy Prime Minister Teo Chee Hean during the Committee of Supply Debate, NPTD is comprehensively examining our population goals and policies, with a view to releasing a White Paper on Population by the end of the year. Information released in the Occasional Paper can help to facilitate studies and discussion in the lead-up to the White Paper," the spokesman added.

"We have started with focus group discussions with different segments of the community, to gain a better understanding of the various views on population-related issues. From the middle of the year, we will engage members of the public through various avenues, including dialogues and online channels to discuss these issues holistically."