Singapore goes back to its
roots
John Burton
Financial Times
2 Aug 07
http://www.ft.com/cms/s/ad489ffc-4045-11dc-9d0c-0000779fd2ac.html
Gautam Banerjee is the type of foreigner Singapore wants to
attract. The Indian-born accountant left London after university in
the early 1980s and moved to the city-state, where he became a
citizen in 1990.
Now the head of PwCAsia, he was appointed by the government to
serve as a non-voting parliamentary member to promote the interests
of Singapore's growing immigrant population. "We need to get
overseas talent to sink roots here," he says.
Singapore wants a lot more people like Mr Banerjee. Its birth rate,
once one of world's highest, is flagging. Young, educated
Singaporeans are emigrating to seek better-paying jobs or more
freedom from restrictive rules at home. If present trends continue,
the local population could begin to shrink by 2020.
Singapore's leaders view the situation with alarm. A declining
population would result in economic stagnation. Their solution is
to admit many more foreigners with the goal of increasing the
population to 6.5m from 4.5m in the next 20 years.
The main focus: attracting skilled workers from China and India,
the countries that provided the waves of immigrants who helped to
turn Singapore from a 19th-century swamp into the financial centre
it is now.
If foreign-born permanent residents are included, Singapore has
Asia's largest population of foreigners as a proportion of its
residents. They make up more than a quarter of its population and a
third of the workforce. Since 1990 the foreign population has
expanded by 7.4 per cent annually to 1.2m against a 1.1 per cent
rise for all Singaporeans.
While Singapore seeks to lure skilled workers with an eye to the
future and competing with rival Hong Kong, the reality is that most
of those who have arrived in recent years are a rotating underclass
of cheap labour from the Philippines, Indonesia and
Bangladesh.
Of the 670,000 foreigners working in Singapore, 87 per cent are
employed in low-paid jobs as construction workers or domestic
maids.
As the government chases skilled workers, "state policy is opposed
to long-term immigration [of unskilled foreign workers] and
directed at ensuring that this category of migrants remains a
transient workforce", says Brenda Yeoh, a geographer at the
National University of Singapore.
Maids and labourers normally receive work permits for one or two
years, cannot bring in spouses or children, are forbidden from
marrying Singaporeans and are deported if they are pregnant.
The government is hoping to change the foreign population mix by
attracting more educated workers needed to fill jobs in service
sectors such as private banking and finance, biotechnology and
education. It wants many of them to become citizens or permanent
residents, with the goal of having 240,000 of them gain this status
in the next five years.
To do so, the government is trying hard to shed Singapore's dull
image in favour of a global city with buzz. It has eased strict
rules governing nightlife and will soon open two of the world's
most expensive casinos. The development of cultural activities, is
receiving attention after years of neglect. "Singapore is selling
itself as a lifestyle centre" to attract more middle-class workers,
says Christine Ong, the Singapore country head for UBS, the
investment bank.
The focus on foreign talent has provoked a backlash, with the
income gap widening to its greatest since independence in 1965. A
newspaper poll found 43 per cent of Singaporeans believed the
government cared more about foreign professionals than the local
population, with their biggest worry the loss of jobs to
outsiders.
Officials say the influx will help job creation by developing
service industries and start-up companies that can hire local
workers. But some economists suggest that Singapore should cut the
number of low-skilled foreigners to promote local hirings and
higher wages. As one of the most densely populated countries, the
addition of 2m people threatens to strain resources.
It is likely to increase Singapore's dependence on imported food
and water, while raising prices for housing, transport and public
services that would undermine the government's strategy of making
the city-state cost competitive. Housing prices, for example, are
already expected to go up 30 per cent this year while rents for
office space in the prime business district have doubled in the
past year.
The biggest challenge that Singapore may face in the long term is
to maintain the social stability that the government has always
prized. "Foreign labour policies might be tightened if political
stress emerges in the future," says Chua Hak Bin, regional
economist at Citigroup in Singapore. "Such a risk cannot be
dismissed as foreigners could reach half of the total
population."
