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The Financial Times
Singapore will seek on Monday to reassure multinational companies that plans to tighten immigration curbs will not affect the city state’s openness to relocation by white-collar expatriates.
A review of economic strategy, chaired by Tharman Shanmugaratnam, the finance minister, has concluded that growth in the number of resident foreigners must be slowed in response to growing concern among locals.
Foreigners make up about 34 per cent of the country’s population of 4.99m, following a long period of high economic growth up to 2008 during which Singapore accepted up to 100,000 people each year.
In a report to be presented on Monday, the review committee will say that the focus of reductions in the flow of foreigners must be on relatively unskilled blue-collar immigrants, who work mainly in the service, construction and transport industries, rather than on workers concentrated in the financial sector and professions such as law and accountancy.
“The report will make it clear that we remain open to highly skilled, talented people,” said a person familiar with the report. “This cannot be about Singapore letting up on openness.”
The committee is understood to have accepted that the reduction in blue-collar immigration will raise costs for multinational and local companies, requiring a significant improvement in productivity growth to maintain international competitiveness.
The report, by a mixed group of government officials and business people, is technically a series of recommendations to the government, which will respond during debates on the budget, due to be presented on February 22.
However, the review committee includes several ministers in addition to Mr Tharman, and its members are understood to be confident its recommendations will be accepted in full.
The economic strategy report will confirm that Singapore’s long-term rate of economic growth is likely to fall to below 5 per cent a year from 8 per cent to 9 per cent a decade ago, as disclosed in the Financial Times in September.
The forecast decline in growth is in part a result of slower growth in the workforce caused by lower immigration and a fall in the birth rate to less than two children per woman, the rate at which population numbers are self-sustaining.
The report will propose a campaign to increase productivity, including government financial support for companies seeking to upgrade the skills of their existing workforces.
The report will also call for action to encourage more Singapore-based companies to expand overseas, and for a campaign to increase the city’s attractiveness to tourists and professional immigrants.
According to the latest government figures, only about 3.25m of Singapore’s 4.99m people are citizens, with 480,000 foreigners living in the city as permanent residents and 1.26m on short-term visas.