Between 2005 and 2009, Singapore’s population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners. Immigration continued in 2009 despite expectations it would collapse because of the global recession.

At the same time, though, foreign workers have driven up real estate and other prices and made the city-state’s roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore’s gap between rich and poor.

Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living.

On Temasek Review, a Web site dedicated to Singaporean affairs, one writer recently warned Singaporeans would be “replaced” as “3rd class citizens” by foreigners, while another said that immigration “will emerge as the single most important issue” in Singapore’s next general election, due by 2011.

Singapore’s Expat Surge Fuels Economic Fears
By PATRICK BARTA And TOM WRIGHT asia.wsj.com JANUARY 12, 2010