Singapore hangs out jobs-vacant sign

August 21, 2008
Singapore Democrats

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Megawati Wijaya
Asia Times

The government of this island state, seeking to keep the economy globally competitive, is driving a shift in the country’s population make-up. This carries with it the political risk that locals will object to the influx of white-collar foreign workers who in droves are taking up the island state’s highest-paying corporate jobs.

Now one out of every five residents in Singapore is a foreigner; six out of every 10 new jobs created last year went to expatriates; and a record 14,000 people gave up their home passports to become Singaporeans in 2007.

Those figures are indicative of the official red carpet rolled out to lure highly educated, ambitious and preferably wealthy foreigners to work and take up permanent residence in Singapore.

The government’s bid to lure so-called “talent capital” is driven by its new-economy ambitions, where innovation, cutting-edge research, niche marketing and techno-capitalism are seen by officialdom as the key to long-term economic and national success. Singapore has recently emerged near the top of the global finance industry, with its sovereign wealth funds taking up strategic stakes in some of the world’s most prestigious, but recently financially unstable, investment banks.

The country is also emerging as a regional hub for biotechnology, biomedical and alternative-energy industries. Whether the nation of nearly 5 million people will be able to sustain growth and profitability in those high-end industries will come down to human resources. And the demographic trends are not promising.

The local talent pool is constrained by a low fertility rate, which fell to as low as 1.24 in 2004 before rising last year to 1.29 as the state urged couples to have more children. That’s well below the 2.1 replacement level and means Singapore now faces a declining population growth rate in the absence of immigration.

Minister of Home Affairs Wong Kan Seng has been charged since 2004 with overseeing the national population committee, a state body tasked with both formulating and implementing measures aimed at curbing the declining birth rate and achieving a government-devised ideal population size and composition.

As those growth-promoting measures come up short, the government is now redoubling its efforts to lure top-notch foreigners to fill the the corporate corridors. The government first started to woo foreign talent in 1988, when it initiated the offer of permanent residency to qualified Hong Kong candidates. More than 60,000 were offered Singapore residency, but only about 5,000 took up the offer as of the early 1990s.

However, foreign acceptance rates are now firmly on the upswing, judging by recent immigration statistics. In 2006, new citizen acceptances were up to 13,200, nearly double the average annual figure of 7,000 over the previous four years. A number of factors are believed to be driving the positive migratory trend.

A survey by business consultants Mercer ranked Singapore this year as the city with the best quality of life in Asia, higher than both high-earning Hong Kong and Tokyo. The study considered factors that included the political and social environment, medical and health systems, public services, transport and housing.

Open-door history

Singapore was built on open immigration policies, said Gavin Jones, a scholar at the Asia Research Institute at the National University of Singapore. Established as a British trading colony in 1819, the island territory’s history and fortunes have been closely intertwined with waves of migration.

A fast-expanding economy coupled with open-door immigration policies drew in large numbers of immigrants, mostly laborers from China, India and the Malay archipelago, in the 19th century. That meant the population quickly grew from a few hundred in 1819 to half a million by a 1931 census.

After achieving independence from colonial rule, fertility rates hit 4.7 and in response the government launched intensive campaigns to reduce the national birthrate, including state-led family planning, induced abortions, voluntary sterilization and other incentives and disincentives aimed at reducing fertility.

Those sometimes heavy-handed measures were driven by government concerns about how the tiny island state would survive after its separation from Malaysia in 1965 and with the loss of its traditional economic hinterland and natural resources. Those slow-birth messages hit home, but by the 1980s the trade-geared economy was rapidly expanding and the government changed tack by encouraging Singaporeans to have more children to bolster the workforce.

Singaporeans today have a love-hate relationship with the new generation of well-heeled immigrants. While many say they appreciate the vibrant, cosmopolitan feel they bring to the local culture, at the same time they feel a tinge of insecurity over their rice bowls.

A poll carried in a local newspaper last year revealed that nine out of 10 Singaporeans feared losing their jobs to overseas professionals and hence opposed the government’s 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 with that of its own people.

The National Trade Union Congress (NTUC), a labor movement, recently gave Prime Minister Lee Hsien Loong feedback that local workers are increasingly worried about new immigrants taking away their jobs, reducing their wages and generally increasing workplace pressure on them. A hot debate also recently took place in the local Chinese daily Lianhe Zaobao, where some advocated implementation of pro-local policies.

The rapid foreign influx has been blamed for last year’s soaring property rental rates, which for private units rose 31.2% in the year to mid-2007. Local property agents ERA and Propnex said that in the first quarter of 2007, apartment prices for the island state’s three most popular suburbs rose by more than 10%.

Rents have recently stabilized, but average salaries haven’t risen fast enough for many to afford housing. One local renter said rising rentals means young Singaporeans are now unable to afford their own places and live independent of their families as a previous generation of upwardly mobile Singaporeans did. “Those were the good old days,” she said, referring to the not-too-distant past.

Member of parliament Siew Kum Hong believes that Singaporeans still see low-skilled immigrant workers as a greater threat than white-collar executives. He argues that highly skilled foreigners are taking jobs that Singaporeans are unable to fill, either because of inadequate skills or insufficient numbers.

On the other hand, low-skilled foreigners are willing to work for lower pay and represent a more direct threat to a wider cross-section of Singaporeans. He believes the greater resentment will build up against what he refers to as “mid-level foreigners”. “They will be seen as standing in the way of lower-income Singaporeans who want to upgrade themselves and move up the salary ladder,” Siew said.

Immigration as politics

Opposition parties have used the immigration issue to attack the People’s Action Party-led government, which they strongly criticized at the general election in 2006 for its inability to rein in the rising cost of living. The PAP won those elections resoundingly, but the opposition continues to play up the growing sense of vulnerability among the electorate.

Workers’ Party chairperson Sylvia Lim has asked for “clarity and calmness” in deciding immigration policies, while noting that Singapore’s workers have been hit by both the pressure of globalization and the government’s liberal immigration policies. She claimed that Singaporean employers often employ foreigners in place of locals because they are simply cheaper to hire. “Lower income Singaporeans cannot afford to have their wages depressed further,” Lim said.

The government rejects those opposition claims. Foreigners “are not here to steal our jobs, but to help us enlarge the economic pie”, Prime Minister Lee said in a national day rally on Sunday, in celebration of the country’s 43rd year of independence. It marked a repeat of the same assurances he gave to Singaporeans during a May Day rally this year.

Minister Mentor Lee Kuan Yew, the prime minister’s predecessor and father, said last month that Singapore was previously an Asian society made up of ethnic Chinese, Malays and Indians, but that now “we’ve got a real rainbow spread”. But some say the color analogy is blurred as high-end foreign talent moves in and local labor looks to move abroad.

Official statistics estimate 150,000 Singaporeans, or 3.3% of the population, now work or live abroad. In a 2006 survey, 53% of young Singaporeans said they would consider emigration. Last month, Home Affairs Minister Wong confirmed that an average of 1,000 Singaporeans had given up their citizenship to move abroad every year over the last three years, with many of the departures coming from the same high-end industries the government is bidding to attract foreign talent.

How wide the government is willing to open the door to high-end immigration is an open political question. Mentor Minister Lee recently said: “If we have more immigrants than genuine Singaporeans, you become a different people. We must have that core, at least 65% of people born and bred who understand this place, who are part of this society and who know how we got here and why we must do these things.”

That issue came to light during the Beijing Olympics, where Singapore won its first ever silver medal last Sunday. The moment of national pride was compromised for some as the winning table tennis team of Li Jiawei, Wang Yuegu and Feng Tianwei were are all China-born athletes recruited under Singapore’s Foreign Talent Sports Scheme.

In that nationalistic vein, opposition politician Lim questions the issue of rootedness among new Singapore immigrants, many of whom she claims see the country as merely a place to jumpstart their careers but not a final home destination. Local resentment towards foreigners is also fueled by them not having to take part in national service, said Jones at the Asia Research Institute, referring to the compulsory two-year military and national defense training that is otherwise compulsory for male Singaporeans and second-generation permanent residents.

Despite those rising resentments, minister for national development Mah Bow Tan projected last year that Singapore will need another 1.5 million people over the next 50 years, boosting the population to 6.5 million, to attract the investment needed to sustain and support current levels of economic growth.

Whether future waves of immigrants to Singapore will find its standard of living as desirable as the new class of arrivals is debatable. Singapore already ranks third in the world – after Macau and Monaco – in terms of population density, with about 6,500 people per square kilometer. That ratio will tighten if and when the Singapore squeezes an additional 1.5 million people within the island’s 707 square kilometers.

Says parliamentarian Siew: “To be honest, I am not sure if I would like to be around to live in a Singapore that will be so crowded.”

http://www.atimes.com/atimes/Southeast_Asia/JH21Ae01.html