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By Amy Tan
SINGAPORE (Reuters) – Singapore’s worst downturn in four decades has taken a toll on foreigners working in the city-state, with a record number leaving the island as companies cut headcount and generous expatriate packages evaporate.
“People are leaving and they are leaving in very big numbers,” said Bill Cain, managing director of Santa Fe Relocation Services.
The firm with U.S. and European clients moved 800 families into Singapore in the 11 months to November. That compared with 1,400 for all of last year.
As of November, his group had moved 1,200 out of the city-state, nearly neck-and-neck with 1,300 last year.
“The older expats with the big all owances are leaving,” said Cain. “There is a trend towards younger (workers) and singles, primarily Australians, who are coming up on cheaper packages.”
According to recent state data, the number of foreigners living in Singapore for at least a year fell 3.4 percent to 785,400 between June 2001 and this year.
The exodus was the largest for the past 10 years.
The figures include both expatriates and low skilled foreign workers such as maids or construction workers, but state data did not provide a breakdown of the types of workers leaving.
The number of foreigners in Singapore has steadily increased over the past decade thanks to an open-door policy towards skilled foreign labour. The year 1999 was the only exception when 18,200 foreigners left after the Asian financial crisis.
MOVING WITHIN ASIA
The city state, which struggled out of its worst recession in four decades in the second quarter, is home to numerous multinational companies.
The Japanese are the biggest expatriate community in Singapore with more than 20,000 people based in the tiny state of 4.1 million. There are about 16,000 Americans in Singapore.
“Banks and other companies across the board are cutting down. They are trying to cut costs and expatriate names glow if they are on a full package,” said Jacqueline Palloway, director of No Stone Unturned, which offers specialised services to the expatriate community.
“Companies are just not giving out the same packages as they were two years ago. They are capping allowances,” said Cain.
But those made redundant in Singapore were not necessarily moving home to the United States or Europe.
“A lot of business is inter-Asia. A good majority is just re-shifting and aligning,” Cain said.
He said between 10 to 20 percent of the expatriates were leaving Singapore for China.
The exit of the expatriates with large housing allowances is adding to the misery of local property owners who have endured four straight years of falling housing prices.
“The expat story has been an issue. With firms downsizing, you have people leaving and this has put pressure on the rental market which is already in the doldrums,” said an economist who did not want to be identified.
But some expect the expatriates to return eventually.
“I’m sure they will return but it will probably take a while because it’s not just Singapore that foreign investors will look at, it’s the region as a whole,” said the economist.
“Singapore will suffer from the fact that its located within Southeast Asia where there are increased security concerns related to Indonesia and the Philippines,” he said.