S’pore growth not so rosy for common folk

January 27, 2011
Singapore Democrats

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Ayako Hirayama
Daily Yomiuri

This is the first installment of a two-part series about issues in Southeast Asia, a region that has attracted increasing attention from Japan as a promising market and rapidly growing political partner. The first installment looks at Singapore’s open-door policy and one of its apparent results, brain drain.

Xu Yuan Shao was not satisfied with his life in Singapore. Year after year, his frustration grew with the city’s crowds, shallow materialism and limited career prospects.

So instead of waiting for the government to provide a solution, he took action. He left.

“Residing overseas will definitely broaden our horizons,” said the 28-year-old, who started a new career as a coordinator for international relations at the Kagoshima prefectural government in September. “I think this is especially important for Singaporeans, who are highly shielded by our government.”

Singapore has been heralded by many as a model of success. Lauded for its graft-free business climate and highly developed infrastructure, it has successfully branded itself as a clean, safe and prosperous Asian commercial hub that has attracted both foreign firms and migrants. As the government intended, foreign workers have helped buoy the city-state’s economy.

According to a Gallup global survey released in August, Singapore ranked for the second consecutive year as the country most attractive to migrants. If everyone who wanted to move there could, its population would triple, the survey showed.

“I would agree that Singapore is probably one of the best places in Asia to live, work and play, but that is only true for the rich and the financially sound,” said Xu, who is also known by the name Kennard. “Ask the common folks who are trying to make ends meet, I wonder if they even think there is room in Singapore for ‘play.'”

In the past decade, Singapore’s workforce has grown significantly, increasing by more than 820,000 since 1999. Although the global recession slowed employment, the country saw its working population rise to about 3.03 million in 2009, up 3.1 percent year-on-year, government statistics show.

Like many other developed countries, Singapore is dealing with demographic changes, hitting a record-low birthrate of 1.22 in 2009–even worse than Japan’s. But the multiethnic city-state is more accepting of foreigners than Japan. Indeed, it relies on migrant workers to keep its economy rolling. Currently, foreign workers make up about one-third of Singapore’s total workforce.

But growth has not come without a price.

The surge of foreigners has created a backlash to the government’s open-door policy. Local residents have increasingly voiced anxiety that migrant workers compete with them for jobs, housing and public transportation.

The government has responded to public sentiment by vowing to slow down the inflow of foreign workers, and has taken steps to reduce dependence on low-skilled outside labor, such as by raising levies on employing foreign workers.

There are “social and physical limits to how many more we can absorb,” Finance Minister Tharman Shanmugaratnam was quoted as saying in a local newspaper last year.

But despite such gestures on the part of the government, Singapore is still in need of cheap labor as commercial development is booming. Last year, huge casino resorts opened that reportedly cost more than 10 billion dollars to build, while numerous residential and other construction projects are well under way.

Manu Bhaskaran, chief economist of Centennial Group in Singapore and a regional newspaper columnist, said the government is faced with a policy dilemma.

“In the short term, the economy is at full employment with labor shortages, pushing wages up and threatening a surge in inflation. So it might seem that allowing more foreign workers would alleviate inflation risks,” Bhaskaran said. “But in the longer term, if the government keeps allowing foreign workers in, the political backlash will grow and there will be no incentive for companies to upgrade and find ways to economize on labor.”

Bhaskaran warned of unintended effects of the open-door policy, such as lowering the wages of local workers.

“It is not easy to make the right policy decision. I think policy should be focused on the long term,” he said. “I would argue for continued restrictions to slow the rate of growth of foreign workers in Singapore.”

In the meantime, young Singaporeans like Xu are increasingly seeking employment overseas, with some not intending to return.

“An inflow of foreign workers has beneficial consequences to Singapore, but too large a number can cause disruptions,” said Kwan Chang Yee, who has lived in Scotland for five years for postgraduate study. The population density, he said, has moved above the level he finds personally tolerable.

Some people argue the brain drain can also be linked to the government’s autocratic style of managing society. Singapore’s media outlets, for instance, have to obtain licenses and renew them every year, a system many critics have said leads to media self-censorship.

P.N. Balji calls the system “sophisticated control” of the media. The director of the Asia Journalism Fellowship program at Nanyang Technological University and a former deputy editor of The Straits Times, Balji said journalists are hired by people who are pro-government and the news is “indirectly dictated by the government.”

Balji, whose daughter went to study in Toronto and has no plan to return, said, “As Singapore tries to bring in foreign talent, its own talent is looking for greener pastures elsewhere.”

“My daughter told me she chose not to return because of the lack of physical and political space in Singapore,” he said. “When I asked if she doesn’t miss family and friends back home, she replied family very much so. As for her friends, she said most are living overseas.”

Hirayama visited Singapore as part of a fellowship program with the Asia Pacific Journalism Centre.

http://www.yomiuri.co.jp/dy/world/T110125005275.htm