Which foreign-worker policy are you talking about?

February 7, 2012
Singapore Democrats

This post is at least a year old. Some of the links in this post may no longer work correctly.

Singapore Democrats

The PAP’s immigration policy of allowing foreign workers into our economy enmasse is very much on the lips of Singaporeans. But really, which policy are we talking about? Of late we have come to learn that there are, in fact, two.  

Is it the one that was announced in February 2010 by Finance Minister Tharman Shanmugaratnam or the one asserted by Prime Minister Lee Hsien Loong in November 2011? The two are diametrically opposite.

Policy #1

Mr Tharman’s policy was crafted by the Economic Strategies Committee (ESC) which he led. It was announced prior to his Budget statement in February 2010.

In essence, the Minister said that Singapore had become over-reliant on foreign workers and the mass importation of foreign labour was causing our productivity to lag. In response, he announced that the Government would increase the foreign workers’ levy in order to reduce the number of foreigners that our workforce hired.

This was implemented by the then-Manpower Minister Mr Gan Kim Yong who, in his Parliamentary speech in March 2011, revealed that

the strong economic growth last year had spurred the demand for foreign workers and about 53,000 foreigners were added to our workforce…we have to further moderate their demand if we want to keep the foreign share of the total workforce to around one-third (1/3) in the long term and encourage our employers to invest in productivity.

As the Finance Minister announced earlier, my Ministry will further increase foreign worker levies in 6-monthly intervals up to July 2013. Some have also asked why we are raising the levy so soon. We need to make these painful adjustments now rather than later.

Policy #2

In November 2011, the Government did a 180 on the policy. Now Mr Lee Hsien Loong said that for the economy to continue to grow at a strong pace, Singapore needs “more workers, more skills, more talent. The more you tighten the inflow, the slower growth is going to be and that’s something Singaporeans will have to understand.”

Minister of State for Manpower Mr Tan Chuan-jin confirmed this reversal in policy when he announced last week that Singapore had taken in 85,000 foreign workers in 2011 (up from 53,000 in 2010).

Why the reversal?

Why was the policy jettisoned so abruptly? Was the Finance Minister overruled by the Prime Minister? Why did the Ministers for Manpower say one thing and then do another? Why was there no announcement when the policy was reversed (compared to the publicity that was made when Minister Tharman came up with his ESC announcement)?

The answer lies in the dates. Clue: Messrs Tharman’s and Gan’s announcements were made in February 2010 and March 2011. The PM’s reversal was made in November 2011. Anyone?