SINGAPORE: The Ministry of Trade and Industry (MTI)
has made a strong case for Singapore to continue with its
calibrated immigration policy as the country faces the prospect of
an ageing population.
The ministry outlined three broad approaches in a
paper on population and the economy, released on
Tuesday.
Firstly, MTI said Singapore should continue to raise
productivity through business restructuring and retraining of the
workforce.
Secondly, the country should also work towards raising the resident
labour force participation rate. However, the ministry said there
is a limit to this.
While a percentage point increase in the labour force participation
rate will add about 30,000 resident workers to Singapore's labour
force of 3.2 million, it is not possible to continually increase
the figure by one percentage point every year.
That is because the percentage of economically active Singaporeans
between 25 and 64 years old is already high -- at 80.7 per
cent.
Then there are those who will not enter the workforce due to family
and other care-giving priorities.
"Nonetheless, we should continue to strive to ensure that those who
wish to work can do so, and to introduce suitable policies that can
help residents to remain economically productive, no matter what
their personal circumstances may be," said MTI.
The third strategy is to have a calibrated level of immigration and
foreign manpower -- both for high-skilled and low-skilled
workers.
Trade and Industry Minister Lim Hng Kiang said foreign manpower is
needed to complement Singapore's resident workforce, and support
the construction, health and social services sectors.
He said foreign manpower is also needed to anchor and build up new
sectors in Singapore -- such as the biomedical and aerospace
industries.
Mr Lim said: "If you train Singaporeans to fill up the sector
before you launch the sector, you may lose the opportunity, and you
take too long.
"So our strategy is to bring the sector in, allow the companies to
hire foreign talent, workers, and meanwhile we train Singaporean
workers to fill up the jobs. If you tell Rolls Royce, wait until we
train all the workers and technicians, I think we would have missed
the investments."
The paper goes on to explain the role of foreign manpower in
Singapore.
The ministry estimates that by 2030, the number of Singaporeans who
are professionals, managers, and executives (PMEs) as well as
technicians and associate professionals (TAP) will rise.
So there will be a continued need for foreign workers in
low-skilled jobs to complement the resident workforce.
High-skilled foreign manpower will also help companies as they
restructure to meet the needs of the new economy because the skills
and capabilities that new industries need may not always be
immediately available in the Singaporean workforce.
The paper said having a "readily-available foreign manpower with
the necessary skill sets" allows Singapore to anchor these emerging
industries, while the country develops the pipeline of Singaporean
workers.
MTI added that foreign manpower also helps to cushion Singaporeans
from unemployment during downturns. This was seen during the
recession years of 2008-2009, as well as post-911 and the SARS
period.
The foreign workforce also contributes to Singapore's taxes. The
ministry said while foreigners currently account for about 20 per
cent of all income taxpayers, they contribute more than 25 per cent
of Singapore's total personal income taxes.
Foreigners living and working in Singapore also add to the GST tax
base. "Their tax contributions increase the fiscal resources for
government to meet various public expenditure needs, including
social programmes and transfers to maintain a progressive fiscal
system," said MTI.
The ministry said calibrating the inflow of foreign manpower will
be a delicate balance.
An overly liberal access to low-skilled foreign manpower could
depress wages for low-skilled jobs or encourage businesses to rely
on cheap labour instead of making productivity improvements.
Too much high-skilled foreign manpower may lead to Singaporeans
feeling a sense of displacement. The physical infrastructure, which
is being ramped up, may also be placed under stress in the
immediate term.
However, the ministry explained that an overly restrictive foreign
manpower policy will have a detrimental impact on both the economy
and society. "We may have a less vibrant economy, with fewer job
opportunities and lower wage growth," it said.
It added that there are trade-offs Singaporeans have to bear in
mind when considering the appropriate level and pace of foreign
manpower inflow.
"We have pursued economic growth not for its own sake, but for the
opportunities and benefits that a vibrant economy brings," said the
ministry.
The latest report comes as the government launches a national
conversation on the future of the country.
The National Population and Talent Division is also putting
together a white paper on population policies, due out early next
year.
- CNA/al