Singapore’s open-door immigration policy for foreign labor is closing amid persistently high unemployment in Europe and the United States. The island state has recently relied on foreign talent to propel its competitiveness but local politics and global economics have motivated a tightening of immigration rules.
One in three of Singapore’s five million people is a foreigner. Last month, the government adjusted the rules on qualification for permanent resident (PR) status, which can be granted under a number of categories, most relevant for foreigners being those covering (i) investors and entrepreneurs, and (ii) professionals and skilled workers.
For investors and entrepreneurs, the government raised the minimum investment required to qualify for PR status. Under the city’s Global Investor Program (GIP), foreigners aiming to become PRs will need now to fork out at least S$2.5 million (US$1.9 million) in Singapore-based investments, more than twice the previous $1 million requirement.
Their registered companies must now report an annual turnover of $30 million, up from $10 million previously. The GIP scheme was first implemented in 2004 to ease the way for foreign entrepreneurs to establish and run businesses here. A parallel Financial Investor Scheme offers a package of incentives, including PR status, to attract foreigners with net worth of $20 million or more.
Professionals applying for PR status or citizenship now also face more stringent eligibility criteria, including higher minimum incomes and residential requirements, several said, telling this correspondent that they recently received one-year PR renewals instead of the five years many received before 2010 and the 10 years commonly given prior to 2008.
One foreign professional who has worked in Singapore for six years said his PR status was recently extended for only one year. “It feels that the government has decided not to extend my PR after it expires next year and for the time being has only given me a grace period to look for jobs elsewhere outside Singapore,” he said.
Others, it appears, will be given stay-or-go ultimatums. During a National Day rally event last month, senior minister Goh Chok Tong said the government might consider offering citizenship to select PRs and not renew the PR status of those who decline the offer.
“In the past, we could just give you permanent residence without taking up Singapore citizenship. Moving forward, we are going to approach some of them to take up Singapore citizenship. If they don’t, then their PR will be not renewed. That’s a better way,” said Goh. As not all countries recognize dual citizenship, opting for Singapore citizenship could pose a difficult dilemma for some PRs.
Goh said that of the 500,000 PRs currently in Singapore, “maybe 50,000 can be selected to become Singapore citizens, the rest can be PRs contributing to the economy.”
Goh’s comments raised hackles in expatriate circles. A day after his comment, a thread on the website ExpatSingapore ran under the header: “Singapore to expel 10% of permanent residents”. Goh later hedged his statement, saying that the 10% figure mentioned was “only for illustration purposes” and that his comment was a “general observation to illustrate the point that the government would be managing the inflow of PRs and would encourage some of those who are already here to become Singapore citizens.”
The changes mark a significant policy reversal. As recently as 2008, the government recruited foreign white-collar workers to fill up vacancies in its various high-end industries, including the finance, biotechnology, biomedical, and alternative-energy sectors. Low levies on foreign workers also made it easy for companies to hire low-cost unskilled foreign workers to work in manufacturing, construction and service industries.
But the global financial crisis has resulted in sharp competition for well-paid jobs and with many companies in retrenchment mode a divide has opened between locals and foreigners. In 2008, a poll carried in a local newspaper revealed that nine out of 10 Singaporeans feared losing their jobs to foreign professionals and opposed government efforts to attract more of them. Nearly 43% said in the same poll that they believed the government was more concerned with the welfare of foreigners than its own people.
The National Trade Union Congress (NTUC), a local labor movement, has publicly told Prime Minister Lee Hsien Loong that local workers are increasingly worried about new immigrants taking their jobs, reducing local wages and generally increasing workplace pressures. The local Chinese daily Lianhe Zaobao has gone a step further through advocating the implementation of pro-local policies.
Local over foreign
The government has apparently taken onboard that nationalistic advice. In July, foreign levy rates on work permits for low-skilled workers were raised by between $10 to $30. The levies are scheduled to continue rising through 2012 to around $100 per worker for foreign manufacturing and service sector workers.
Rates for first- and second-tier labor were raised to $100 and $120, up from the previous standard rate of $50. Those rates will rise as high as $250 by 2012. The purpose of the higher levies is to encourage Singapore companies to rely less on foreign workers and upgrade their productivity, Finance Minister Tharman Shanmugaratnam said.
Singapore’s trade-geared economy has boomed its way out of crisis. Gross domestic product (GDP) grew 18.8% year-on-year in the second quarter and 10.3% in the third quarter. The government has forecast GDP growth this year will hit between 13% to 15%, a dramatic uptick from last year’s 2% shrinkage.
Yet the local-versus-foreign debate has not subsided and has become fodder for the political opposition to hit the People’s Action Party (PAP)-dominated government. Locals vent their frustrations anonymously in online forums, often blaming foreigners for the country’s 2.2% unemployment rate, declining local wages, inflated residential rental rates, and stretched public resources such as health care facilities.
An article in the Straits Times last month underscored local perceptions that foreigners are fickle, fleeing the city-state during times of crisis and arriving in waves for economic booms. Alvin Yeo, a member of parliament, recently echoed those nationalistic views: “Among the local community, they are saying: ‘These [PRs] are treating Singapore as a hotel.’
“We citizens live here. If anything happens, we can’t go anywhere else. But PRs have the best of both words: they can pack up, go back to their own countries,” said Steve Chia from the opposition National Solidarity Party. “[Only] if they take up citizenship, they’ll cut their ties to their home countries and sink roots here.”
Brian Dalby – a British PR who has been in Singapore for 16 years, wrote to local paper putting the other side of the case. He said that despite “a deep respect” for Singapore and that he contributes “fully to the economy”, he cannot erase the identity, relationship or culture from the country of his birth, Britain. He must also remain British to keep its pension. “While I desire to take on Singaporean citizenship, I have no desire – nor can I financially afford – to renounce my British citizenship,” he said.
Tighter immigration regulations are already taking effect. Last year, 132,200 foreigners applied for PR status, but only 59,500 were approved. That was a significant dip from the 79,200 who were given status in 2008. Over the 12-month period from April 2009 to the end of March this year only 46,300 foreigners were granted PR status.
“I think we should consolidate, slow down the pace,” Prime Minister Lee said at a National Day rally in August. “We can’t go on like this, increasing our population 100,000, 150,000 a year indefinitely. We should give Singaporeans time to adjust.”
Striking a similarly nationalistic note, Home Affairs Minister Wong Kan Seng said in parliament last month that the government must “ensure the number of PR is not going to be significantly large and overwhelm the Singapore citizen population”.
At the same time, the cost of being a foreigner in Singapore has risen substantially. On top of existing citizen-only privileged policies in housing, childcare, and education, the government has recently raised the school fees for PRs and other foreigners, widened the gap between healthcare subsidies for citizens and PRs to 20%, and excluded PRs from buying new Housing and Development Board (HDB) flats and from receiving government housing grants and state subsidies for property upgrades.
With general elections expected within the next six months, some see the government’s pro-local policies as part of the PAP’s election strategy.
“The timing for fine-tuning may be coincidental to be near the election time. But this is also because the Singapore government always gathers information from the public,” said Yohanes Eko Riyanto, an associate professor at Nanyang Technological University’s economics department. “They know about the [locals’ unhappiness with] foreigners in competition for jobs and realize they must deal with it soon before the situation gets out of hand.”