TR EMERITUS

Written by Our Correspondent Foreigners, PRs and new citizens are flocking to free language classes organized by Community Clubs sponsored generously by Singapore taxpayers to help them "integrate" into Singapore society. In 2008, foreigners, permanent residents and new citizens made up 55 per cent of participants in English classes and 47 per cent in the Chinese ones, a People's Association (PA) spokesman said. Minister for Youth Development, Community and Sports Dr Vivian Balakrishnan unveiled a $10-million Community Integration Fund in October last year to make new immigrants and PR feel "welcomed" and "happy" in Singapore. The fund will be used to organize events for the newcomers as well as to provide free language classes for those who are unable to speak English and has already been tapped on by various grassroots organizations including a Residents' Committee in Yew Tee, to hold free weekly conversational English lessons for new immigrants from China, Myanmar and Vietnam. The Straits Times reported a Myanmar national Yin Yin Oo, 26, who has been an accounts executive in Singapore for more than a year, saying that she was at the 'intermediate' level in reading and writing, but needed help with spoken English, so she signed up for the classes at the community club. It is not known how she managed to get a job in Singapore in the first place if she needs "help" with spoken English as there are more than qualified Singaporeans around to be "account executives". Unlike other countries like Australia and Canada which require prospective immigrants to pass an English proficiency test before they are even allowed to work there, Singapore has no such rules. Due to the ruling party's lax criteria for immigrants, even English iliterate PRC construction workers, masseurs and cleaners are given Singapore PRs and citizenships. According to a Wall Street Journal article on 13 January 2010, the relentless influx of foreign workers "has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore's gap between rich and poor." Singapore has the highest income-gap among the thirty most developed countries in the world. Though it is the second richest nation in Asia after Japan, its citizens have a low domestic purchasing power comparable to other first world countries. (read UBS report here) A recent report by the International Labor Organization revealed that Singaporeans work the longest hours among Asian countries, more than the Japanese, Koreans and Taiwanese, but are paid less than them. The median monthly pay of an average Singaporean worker is only $2,600 compared to $180,000 for a Singapore minister. It has hardly increased over the lat decade. Singapore's octogenarian strongman Lee Kuan Yew dismissed the importance of the widening income gap at a ministerial forum last year on the grounds that it "matters little" so long the government continues to create jobs for Singaporeans. Despite the increased competition faced by Singaporeans from foreigners in every sphere of life, the ruling party does not appear to care much as long as Singapore’s economy continues to grow. (A substantial portion of the PAP ministers’ multi-million pay package is pegged to Singapore’s GDP growth). In a recent interview with National Geographic magazine, Lee said it is a “good idea” that Singapore has welcomed so many Chinese immigrants as they are more “hard-driving” and “hard-striving” than the locals. “If native Singaporeans are falling behind because “the spurs are not stuck into the hide,” that is their problem,” he was quoted as saying in the article “The Singapore Solution.” by Mark Jacobson. [Source: National Geographic]  Read More →

Written by Our Correspondent A recent editorial published by the respected international newspaper Wall Street Journal claimed that the relentless influx of foreign workers in Singapore has helped to depress the wages of ordinary Singapore workers leading to a lower quality of life. (read article here) Due to the ruling party's myopic immigration policies, the number of foreigners has increased to 36 per cent of Singapore's population, up from 14 per cent in 1990. "Between 2005 and 2009, Singapore's population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners," Wall Street Journal reports. The influx of cheap foreign labor helps to keep GDP growth impressive since they help to cut business costs and create new demands for good and services in the short run. A significant proportion of Singapore ministers' exorbitant salaries is pegged to Singapore's annual growth rates - the higher the growth, the more money they bring home. Prime Minister Lee Hsien Loong earns an estimated $3 million dollars a year, more than 6 times the annual salary of U.S. President Barack Obama. Even a Singapore minister earns more than the most powerful man in the world and Singapore has a land mass of only 0.000073 per cent of the United States. Wall Street Journal estimates that "a third or more of Singapore's 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations." However their arrival has depressed the wages of blue-collar workers, exacerbating Singapore's income gap between the rich and the poor. Singapore has the highest income-gap among the 30 most developed countries in the world as measured by the Gini Coefficent, comparable to some third world nations like Kenya, Russia and Tunisia. A long-term devastating effect of the mass immigration is that it appears to contribute directly to the decrease in labor productivity as companies continue to depend on cheap imported labor to keep their profit margins instead of innovating to make their businesses more efficient: [Source: Wall Street Journal] "Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living," said WSJ. In an interview with Mr Kenneth Jeyaretnam, an economist by training and the Secretary-General of the Reform Party, he opined that immigration has "kept our economic growth high but, at a tremendous cost." Another economist, Choy Keen Meng from NTU added that "relying on foreign labor to help boost growth is unsustainable" and that a "better model would involve the reining in immigration and accepting that Singapore is becoming a more mature economy like the U.S. or Europe, with a long-term growth rate of 3% to 5% a year." But then, a decreased growth rate will hurt the pockets of Singapore ministers who have been justifying their astronomical salaries on the grounds that they have "delivered" economic growth to Singapore when GDP figures can be easily popped up artificially by increasing the intake of foreigners without translating directly to a higher quality of life to its citizens. Though Singapore is able to lose billions of dollars of national reserves from investment losses suffered by its two gigantic sovereign wealth funds GIC and Temasek Holdings, Singaporeans receive few social welfare benefits from the ruling party which has won 11 consecutive elections by overwhelming margins since first assuming power in 1959. Wall Street Journal recounts the plight of 58 year old Singaporean Lee Ah Lee who makes 850 Singapore dollars a month (about US$600) clearing tables in a cafeteria, saying that the flood of immigrants has made it hard to make ends meet by pushing down blue-collar pay in Singapore. Despite rising unhappiness and resentment among Singaporeans at its pro-foreigner policy, the ruling party is adamant that the influx of foreigners will continue to increase Singapore's population eventually to 6.5 million people. At the rate the ruling party is replacing native Singaporeans by their new pets from China, India, Vietnam, Malaysia, Indonesia, Myanmar, Bangladesh and even Nigeria, many Singaporeans may end up like Lee Ah Lee in their twilight years, finding themselves replaced by "foreign talents" and have no choice but to continue working till they drop dead and die to finance the hefty housing loans of their over-priced HDB flats built by the ruling party.  Read More →

By Patrick Barta and Tom Wright from Wall Street Journal, 13 January 2010 For years, this rich city-state has marketed itself as one of the world's most open economies. But as Singapore recovers from recession, its residents are questioning a key part of the country's economic model: its long-standing openness to foreigners. Singapore has thrown open its doors to bankers and expatriates in recent years, making it easy in many cases to establish residency and hastening the country's emergence as an Asian version of Dubai. It also welcomed low-skilled laborers from Bangladesh and other developing countries to help man construction sites and factories. The goal was to capture more Asian wealth and offset Singapore's low birth rate with immigrants, spurring economic growth. But the push has also fueled discontent, turning immigration into a red-hot political issue in a country where dissent is still tightly controlled by the government. Between 2005 and 2009, Singapore's population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners. In-migration continued in 2009 despite expectations it would collapse because of the global recession. The influx helped boost Singapore's economy in the short run by creating new demand for goods and services and helping manufacturers keep labor costs low. Developers built apartments and posh shopping centers for the new arrivals. By some estimates, a third or more of Singapore's 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations. At the same time, though, foreign workers have driven up real estate and other prices and made the city-state's roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore's gap between rich and poor. Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living. Lee Ah Lee, a 58-year-old who makes 850 Singapore dollars a month (about US$600) clearing tables in a cafeteria, says the flood of immigrants has made it hard to make ends meet by pushing down blue-collar pay in Singapore, which has no legal minimum wage. Sitting nearby in a drab apartment block built by Singapore's Housing Development Board, a state-owned body that constructs and sells subsidized housing, 79-year-old Lee Kwang Joo says low-skilled foreign workers are often housed in corporate dormitories, meaning they have no housing costs and can survive on lower pay. On Temasek Review, a Web site dedicated to Singaporean affairs, one writer recently warned Singaporeans would be "replaced" as "3rd class citizens" by foreigners, while another said that immigration "will emerge as the single most important issue" in Singapore's next general election, due by 2011. Immigration "kept our economic growth high but, at a tremendous cost," says Kenneth Jeyaretnam, the secretary-general of Singapore's Reform Party, a small opposition party founded in 2008. Relying on foreign labor to help boost growth is unsustainable, adds Choy Keen Meng, an assistant professor of economics at Singapore's Nanyang Technological University. He says a better model would involve the reining in immigration and accepting that Singapore is becoming a more mature economy like the U.S. or Europe, with a long-term growth rate of 3% to 5% a year. Singapore, unlike many of its neighbors, has a reputation for reliable public services and minimal corruption. Its openness to foreign investment is one reason why gross domestic product is expected to rebound to 4.5% this year, according to the Asian Development Bank, from a contraction of 2.1% in 2009. Still, Prime Minister Lee Hsien Loong, speaking at a Singapore university in September, said there was a need to be "mindful of how quickly our society can absorb and integrate" new arrivals, and vowed to curb immigration. The government is also studying immigration as part of a wide-ranging review of the city-state's economic model launched in 2009. Results of the review, due this month,are expected to include steps to diversify Singapore's economy and reduce its reliance on exports to the United States and Europe by boosting domestic consumption, among other things. Yet people familiar with the government's plans say it is unlikely to press for deep cuts in immigration, and will aim to find other ways to restore productivity growth. Singapore remains committed to a long-term goal of increasing the population to 6.5 million, though it would do so by prioritizing high-skilled residents as opposed to blue-collar workers. Immigration "is not a weakness, it's a strength," said one person familiar with the long-term economic planning process. "People want to come here, why not make use of that strength?" Serious cuts to immigration could also generate a backlash from other interests—notably the factory owners and real-estate developers who rely heavily on foreign arrivals. Many employers complain that local Singaporeans, accustomed to a higher standard of living than most other Southeast Asians, are unwilling to take on menial jobs, and are likely to resist further tightening of foreign labor supply. - Wall Street Journal  Read More →