Which foreign-worker policy are you talking about?

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Tuesday, 07 February 2012

Singapore Democrats

The PAP's immigration policy of allowing foreign workers into our economy enmasse is very much on the lips of Singaporeans. But really, which policy are we talking about? Of late we have come to learn that there are, in fact, two.

Is it the one that was announced in February 2010 by Finance Minister Tharman Shanmugaratnam or the one asserted by Prime Minister Lee Hsien Loong in November 2011? The two are diametrically opposite.

Policy #1

Mr Tharman's policy was crafted by the Economic Strategies Committee (ESC) which he led. It was announced prior to his Budget statement in February 2010.

In essence, the Minister said that Singapore had become over-reliant on foreign workers and the mass importation of foreign labour was causing our productivity to lag. In response, he announced that the Government would increase the foreign workers' levy in order to reduce the number of foreigners that our workforce hired.

This was implemented by the then-Manpower Minister Mr Gan Kim Yong who, in his Parliamentary speech in March 2011, revealed that

the strong economic growth last year had spurred the demand for foreign workers and about 53,000 foreigners were added to our workforce...we have to further moderate their demand if we want to keep the foreign share of the total workforce to around one-third (1/3) in the long term and encourage our employers to invest in productivity.

As the Finance Minister announced earlier, my Ministry will further increase foreign worker levies in 6-monthly intervals up to July 2013. Some have also asked why we are raising the levy so soon. We need to make these painful adjustments now rather than later.

Policy #2

In November 2011, the Government did a 180 on the policy. Now Mr Lee Hsien Loong said that for the economy to continue to grow at a strong pace, Singapore needs “more workers, more skills, more talent. The more you tighten the inflow, the slower growth is going to be and that’s something Singaporeans will have to understand."

Minister of State for Manpower Mr Tan Chuan-jin confirmed this reversal in policy when he announced last week that Singapore had taken in 85,000 foreign workers in 2011 (up from 53,000 in 2010).

Why the reversal?

Why was the policy jettisoned so abruptly? Was the Finance Minister overruled by the Prime Minister? Why did the Ministers for Manpower say one thing and then do another? Why was there no announcement when the policy was reversed (compared to the publicity that was made when Minister Tharman came up with his ESC announcement)?

The answer lies in the dates. Clue: Messrs Tharman's and Gan's announcements were made in February 2010 and March 2011. The PM's reversal was made in November 2011. Anyone?

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Comments (14)

Tue 07 Feb 2012 1:20 PM | charisma288

From the PM speech, it has already spell out the mindset of our govt who do not want to improve ppl living, so that they can continue to pursue high GDP for their self interest. In other words, if you are poor, don't blame the govt and take it as your fate.

This is similar to China whereby the income gap between the rich and poor is very wide and the govt do nothing to improve the living of the poor.

Wed 08 Feb 2012 2:29 AM | Buwakasha

charisma288, almost invariably, the government is the cause of the widening income gap between the rich and poor to begin with due to intervention in the economy through central planning, tax and monetary policy. Asking the government to improve the living of the poor is like asking the fox to guard the hen-house. We should not assume that the government is some kind of benevolent being to be there to give handouts and aid to people. Remember, the government has nothing, everything the government has, it has to take from the people first.

Wed 08 Feb 2012 9:17 AM | quantum

How would the invisible hand narrow the income gap, Buwakasha?

Wed 08 Feb 2012 5:23 PM | charisma288

Buwakasha, by controlling the economic system, this is how they drive up cost for high GDP and for their million$ salaries.

Thu 09 Feb 2012 2:43 AM | Buwakasha

"How would the invisible hand narrow the income gap, Buwakasha?"

By allowing economic freedom and true competition in the market. If everyone have the same opportunity to do the stuff that our government does, take for example, public transport, which is a government controlled monopoly, everyone will have a chance to compete for customers, i.e. commuters. We would not have to depend on the MRT to SBS to provide for public transport, there would be more transport companies, they will be better at innovating new and cost effective ways to provide transport services to people thus improving employment opportunities. Right now, these companies are all government controlled, they make the rules, they prevent competition and they set the prices. Bottom-line, if there is more economic freedom, there will be more economic opportunities for the people and less wealth transfer from the poor to the rich.

Thu 09 Feb 2012 2:47 AM | Buwakasha

"Buwakasha, by controlling the economic system, this is how they drive up cost for high GDP and for their million$ salaries."

Exactly. So why do you expect the govt to improve the living of the poor? They take from everybody to enrich themselves. Why do you expect them to do otherwise?

Thu 09 Feb 2012 11:46 PM | quantum

If free competition is that good, why is there such a wide income gap in USA, Buwakasha?

Fri 10 Feb 2012 11:56 AM | Buwakasha

"If free competition is that good, why is there such a wide income gap in USA, Buwakasha?"

Your question does not make sense. Free competition is good, but it has nothing to do with wide income gap in USA. You are assuming that there is economic freedom in USA. That's not true. In fact, if you look at the world's economic freedom index (http://www.heritage.org/index/ranking), Singapore ranks higher than USA. That is not to mean that things are that good in Singapore. It is not, as the SDP has clearly pointed out, but it is worst in USA. The people in the US are clearly sick and tired of corporatism as seen by the TEA party and occupy wall street movements.

Sat 11 Feb 2012 11:18 PM | quantum

I thought the antitrust laws in USA is there to ensure free competition, Buwakasha?

Sun 12 Feb 2012 10:32 PM | Buwakasha

"I thought the antitrust laws in USA is there to ensure free competition, Buwakasha?"

That is the intention, but laws usually have unintended consequences. Antitrust laws in effect does the exact opposite, i.e. it prevents free competition.

Sun 12 Feb 2012 11:34 PM | quantum

The US antithrust laws were used to break up the Standard Oil. Aren't they effective, Buwakasha?

Mon 13 Feb 2012 12:22 PM | Buwakasha

"The US antithrust laws were used to break up the Standard Oil. Aren't they effective, Buwakasha?"

They are effective in breaking up Standard Oil, but what's the point in that? Where's Standard Oil now? Who benefits from that? Antitrust laws are used by competitors to pressure the government in destroying their opponents. Those companies that have major influence in government (by buying their politicians through campaign contributions) have that power and those that don't do not. Microsoft didn't use to lobby congress and when they got hit by antitrust lawsuits, they learnt their lesson. The point is, that is not a free market, that is corporatism and it does not benefit the consumer.

Mon 13 Feb 2012 1:10 PM | quantum

So are you saying that a free market is one that should allow for the creation of a monopoly like Standard Oil, Buwakasha?

Wed 15 Feb 2012 5:22 AM | Buwakasha

"So are you saying that a free market is one that should allow for the creation of a monopoly like Standard Oil, Buwakasha?"

No, but monopolies are always almost created by government through taxes, regulation, licensing, etc. In the rare instance they do not, then the only reason they could exists is that they produce the best product at the best price such that none of the competitors could compete with them. If they at any point in time fail to do so, then they will lose their monopoly status. Bringing in antitrust lawsuits to break them up does no good to the consumers. A good example is the internet. Do you want to use the power of government to break it up?