TR EMERITUS

By Patrick Bartha and P.R. Venkat from Wall Street Journal Singapore announced new steps to curb immigration as it tries to defuse one of its most contentious emerging political issues. The rich Southeast Asian city-state has for years admitted large numbers of foreign workers to boost its population and to stay competitive with China and other countries with deeper pools of cheap labor. But Singaporean citizens are increasingly dissatisfied with the policy, which they say causes overcrowding and depresses local wages. Economists believe an over-reliance on foreign workers also is keeping productivity levels down, jeopardizing Singapore's future growth. Responding to those concerns, the government said in its annual budget Monday that it will raise levies on foreign workers in phases, starting in July. By 2012, employers will be expected to pay an increase of about S$100 (US$71) in per-worker levies in the manufacturing and services sectors, while charges for construction workers could be higher. The government also will introduce some additional changes resulting in higher levies. Although relatively small in absolute terms, analysts say such costs are high enough to discourage some employers from hiring low-skilled workers from overseas, especially companies with big work forces in manufacturing and other industries, where profit margins are razor thin. It's unclear, though, whether the steps will placate citizens who feel the government hasn't done enough to keep Singapore's foreign-born population from growing too rapidly. Between 2005 and 2009, Singapore's population surged by roughly 150,000 people a year to five million—among their fastest rates ever—with 75% or more of the increase due to foreigners. Opposition leaders, including those in a new Reform Party created in 2008, have increasingly used the immigration issue to criticize the government, and may be getting some traction, analysts say. Historically, Singapore's opposition parties have had limited growth, in large part because of the government's ability to deliver solid economic growth and rising standards of living. Given popular dissatisfaction over the issue, the government needs "to look like they're doing something" on immigration, says Tim Condon, an economist at ING in Singapore. The government has signaled for some time that it is willing to limit immigration, but it is unclear how far it would be willing to go. Singapore already has an exceptionally low unemployment rate of 2.1%, so any move to restrict labor flows is likely to be unpopular among companies that need more workers. Singaporean officials have argued that the higher costs will ultimately force companies to become more efficient instead of counting on cheap employees. Read rest of article on Wall Street Journal  Read More →

Written by Our Correspondent Faced with a potential backlash from angry voters in the coming election over its disastrous "foreign talent" policy, the ruling party has been busy fire-fighting at all fronts lately to placate Singaporeans. After introducing a series of cosmetic changes to better "differentiate" citizens from PRs, ostensibly to get more PRs to take up Singapore citizenship to boost its flagging support base, the ruling party will be raising foreign worker levies over the next three years in a lame attempt to "limit" the inflow of foreigners. Under the new scheme, most Work Permit holders will have their rates raised by between $10 and $30 this year while those in manufacturing and services will see their levies rise by an average of $100 at the end of the three years. Levies for S-Pass workers will increase from the current $50 monthly to a maximum of $250 by July 2012. The shocking low rates to employ foreign workers is a key reason behind the influx of cheap foreign labor into Singapore over the last few years. (What is a levy of $10 - 30 for the employers when they can save a few hundred dollars by hiring foreign workers?) The hike in foreign worker levies is unlikely to deter employers from recruiting foreign workers as they can easily pass the cost to the middlemen or the workers themselves. For example, even if a company were to fork out $250 for each foreign worker on S-pass, they are still cheaper than employing Singaporeans. This half-hearted response by the ruling party shows that it was never sincere or serious in protecting the interests of Singapore workers. Foreign workers are allowed to compete directly with Singaporeans for jobs which can otherwise be taken up by them such as IT engineers, clinic assistants, accounts executives and other PMET positions. The quota for local workers can be easily met by getting earlier arrivals to take up Singapore PRs which are usually granted within a few months, thereby freeing up more slots for foreigners. In other countries like Australia and Britain, curbs are imposed even on the intake of skilled migrant workers. Levies were imposed on foreign workers such that they cost the same as locals to deter employers from hiring them. The ruling party should restrict the entry of foreign workers only in sectors shunned by Singaporeans such as the construction industry. A minimum residency period of 2 or more years should be introduced before foreigners are permitted to apply for Singapore PRs. The foreign worker levies should be raised by a few hundred dollars more to make it on par with the wages of Singaporeans. Companies which cannot cope without foreign workers should close shop or ship out. They should not be making profits in Singapore using cheap foreign labor at the expense of Singaporeans.  Read More →

Written by Our Correspondent Despite the desperate attempts of the PAP to entice mainland Chinese to take up Singapore PR and citizenship to boost the population of ethnic Chinese in Singapore, it appears that even the non-professional PRC workers are shunning Singapore. In a Gallup poll done in July last year among China college students, their top three immigrations are the United States, France and South Korea. Singapore was not even featured among the top five. Since the floodgates are opened, a large number of mainland Chinese have flocked to study and work in Singapore with some of them settling here eventually, but with China becoming more developed and prosperous, the number may decrease with time. Sichuan Daily News interviewed a PRC lady from the province who worked as a technician in Singapore. She had obtained "NITEC" certification here which enables her to take up Singapore PR. (read article here) However, she said she is not interested to stay on in Singapore and planned to return back to her hometown in China after picking up some technical knowledge and skills here. Singapore's strongman Lee Kuan Yew boasted that the government is very "selective" about who it gives PRs and citizenships to though it is strange that Singapore needs to import technicians as "foreign talents" from China. In other countries, only highly qualified professionals or rich businessmen are given PRs, but in Singapore, it is not unusual to see technicians, cleaners, construction workers and even prostitutes obtaining PR relatively easily. According to figures from the Home Affairs Ministry, every two out of three PR applicants are successful. There were more than 70,000 PRs in 2008 alone. There are some schemes which allow foreigners from certain places like Hong Kong and Taiwan to obtain Singapore PR without even setting foot here. Being a first world country, Singapore should be able to attract talented immigrants with relative ease, but they seem to prefer Australia, Canada, New Zealand and other democratic states though they have much tighter restriction on immigration. The PAP should seriously reflect on why even the mainland Chinese are not keen to settle down in Singapore permanently instead of throwing precious taxpayers' monies into the sea to make them feel "welcomed" here.  Read More →