She’s the economic model that Small Island Developing States (SIDS) are supposed to follow. Every so often, one of us social and economic commentators will push for our nations to implement Singapore’s strategies. I’ve done it so often that I am now hesitant to use the country as a reference in my musings. This morning, though, is different.
Singapore’s fertility rate in 2025 was reported at 0.87 children per woman. For comparison, Barbados recorded 1.7 births per woman in 2025, according to the United Nations Population Fund. That’s it! What we have here is an economic point of no real return on its own. Plainly put, it’s the first time I am willing to admit that Singapore is a victim of its own success. This depends squarely, though, on how the island nation plans to integrate its population-growth strategy with productive technology. By that, I refer solely to Artificial Intelligence (AI) and Artificial General Intelligence (AGI). They are not “reproductive”, as you may be tempted to think.
Typically, the replacement level of a population is 2.1 children per woman. This essentially represents the number of children needed to replace a couple upon their deaths (with a bit of a rounding error). Societies with that number are thought to grow their populations organically, ceteris paribus, or all other things being equal. That caveat, for your information, is Latin that economists use when trying to control the complexity introduced by too many assumptions in our arguments. This simplification means that, here, we don’t factor in the effects of emigration or immigration just yet.
The fertility rate in Singapore is so low that, on its own, the country loses 50 per cent of its residents in one generation, or 25 years. Barbados, relatively speaking, is in a better position. We will lose 50 per cent of our population in four generations, or roughly 120 years. These calculations do not take into consideration the potential effects of high life expectancy and heavy dependence on immigration. Again, it is all ceteris paribus.
According to Indranee Rajah, Minister in the Prime Minister’s Office, the fertility issue cannot be addressed through policy measures alone. She believes that addressing it requires a total reshaping of “how marriage and parenthood are viewed and supported, how workplaces can evolve to better align work and family, and how everyone can play their part”. It is my strong opinion that the idea of work, in and of itself, is possibly the greatest determinant of the fertility rate.
Providing longer maternity and paternity leave has had mixed effects globally. It is a common view that those two measures have led to a “stabilisation” of the workforce. Critics, however, contend that such benefits mainly assist those who already planned to have children, doing little to encourage those who are laissez-faire about parenthood. My thinking has always leaned towards incentives designed to promote a successful replacement rate. These include shorter working days across all forms of employment; “healthy” minimum-wage increases and associated protections; national wage adjustments that are linked (or, in finance-speak, indexed) to inflation; and easier access to real-estate credit. This both leads to and benefits from stronger economic performance.
To my mind, this begins to create circumstances in which fertility improves as the country becomes an attractive destination for immigrants. Immigration is an easy short-term fix to the problem, and I also tend to support it. What is important is that we recognise, primarily, the pressures on physical and social infrastructure. Added to these is the likelihood of heightened foreign-exchange leakage for Barbados. An uptick in immigrants will mean greater potential for remittance outflows.
Policies intended to improve the path to residency and even citizenship can lead to larger, unplanned foreign-exchange leakages. They may be noticeable in SIDS such as Barbados, but less so in Singapore. This distinction is important. Foreign workers will often maintain links and loyalties to places where they spent a substantial part of their lives. I respect this outlook, so I believe, once again for us, that a government has to plan for it.
Our economic policy is driven by the need to protect the value of the Barbados dollar by fixing it to the US dollar. Foreign-exchange shortages, particularly if they deepen, make it challenging for the Central Bank of Barbados to defend the value of our currency. Protecting it has depended more on tax policy intended to curb consumption than on productivity or deliberate export diversification. Ironically, the latter will need to be our focus if the country continues to pursue the immigration strategy to which we seem committed. Greater productivity and exports will bring more foreign exchange to our resource-stricken nation. Immigrants will send some of that money to their families abroad. There is nothing wrong with this, and we should at least plan for it.
Singapore is a very difficult country to move to. By all accounts, it has decided to pursue a new path similar to the one Barbados is on. We will see Singapore become very open to immigration. It is, however, a country known to be strategic and adept at measuring the performance of its economy. Economists there seem to look at a wider range of success factors than we do when it comes to driving major economic change. In that sense, I expect its new immigration policy to place a hard limit on the number of people seeking to live there. Beyond the country’s size, I think this approach will be heavily influenced by advances in AI and AGI.
There will soon come a time when SIDS begin to recognise that they do not need the population sizes they think they do. This could present as much of a threat as an opportunity, depending on how well we prepare for it in the English-speaking Caribbean. Part of me doubts that we will, though, even if we eventually try. I say this because Anthropic, one of the AI behemoths, just introduced the Model Hardware Standard (MHS). MHS allows AI, for the first time, to speak to hardware such as robotic arms, simplifying the use of this technology across vocations.
Effectively, this means that “blue-collar” workers are not as safe from advances in AI as we thought they were just three months ago. Somehow, I expect Singapore to exploit this, while we in the region fight against it entirely. My take is that, within a few years, the use of foreign workers to support construction booms in the region could dwindle. Then again, I doubt that this will happen, even though the potential disruption and its benefits will be clear from the likes of Singapore. I am willing to take bets on this.