Need for foreign workers “strong” in S’pore

The China Post

Singapore’s economy is projected to slow down in the months ahead but many employers are not slowing their hiring of foreign workers.

Business is good, so contractors, manufacturers, and small and medium-sized enterprises that rely heavily on foreign workers told The Straits Times that they are puzzled by the Government’s forecast that the inflow will slow to around 80,000 this year.

The figure had been announced by Prime Minster Lee Hsien Loong.

It is a downward revision of the 100,000 estimate he had announced last month when he spoke of the need to let them in as the economy sizzles and demand for workers soars.

But the new figure, which is about half the number that flooded Singapore in 2007 and 2008, is not causing employers to loose sleep. The reason: It is not a cap on supply but a forecast of a flow that is determined by market forces.

Said Teo Siong Seng, president of the Singapore Chinese Chamber of Commerce and Industry: “It (the 80,000) could be a ballpark figure in view of a projected slowdown in the last quarter of this year, owing to the shaky recovery in the United States and eurozone debt problems.”

His response is typical of most of the eight employers and business groups that were interviewed.

But construction has projects lined up until the end of a ‘favorable’ year, so demand for foreign workers will remain strong, said Singapore Contractors Association president Andrew Khng.

The sector hires about 245,000 of the more than one million foreigners in Singapore’s workforce of about three million.

However, companies like Jason Parquet, a timber-flooring company, are holding back, wary of the higher foreign worker levies in the pipeline.

Said owner Jason Sim, 44: “I have frozen hiring this year and I don’t intend to renew the contracts of the foreign workers due to uncertainty in the economy.”

Of his 260 employees, 220 are foreigners.

Higher levies are inevitable, PM Lee had warned on Sunday, saying “it is necessary because we need to manage the inflow and not have an indefinite number.”

The foreign worker levy system was already tightened last month, with a tiered system of increasingly higher rates that make it very costly to hire plentiful foreigners, especially low-skilled ones.

The higher rates are part of a national drive to raise productivity growth to 2 to 3 percent yearly over the next decade.

Labor economist Hui Weng Tat believes an expected rise in productivity is probably an underlying reason for the Government’s confidence that the economy can do with fewer foreign workers.

PM Lee, in revising his figure, did not give any reason, saying only that “we’ve recalculated; maybe we’ll get by with a few less, perhaps 80,000 workers.”

When contacted, the Manpower Ministry said it “takes into consideration the global and regional economic outlook, as well as Singapore’s 2010 economic growth projection and labor market conditions, to give a broad estimate of the possible growth of the foreign workforce this year.”

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