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Singapore juggles global talent vs local jobs under COVID threat

Lee warns against turning inward but new policy raises cost of foreign hiring

Singapore's leaders are under pressure to protect jobs for citizens without missing out on foreign talent.   © Reuters

SINGAPORE -- Simmering discord over Singapore's skilled foreign workforce resurfaced this week, as lawmakers gathered to debate policies for the first time following the competitive general election in July.

Prime Minister Lee Hsien Loong on Wednesday stressed in parliament that the city-state remains open to overseas investors, even as his government tightens rules on hiring of non-locals. After immigration emerged as one of the hottest issues in an election that saw the opposition make unprecedented gains, Lee is walking a fine line -- attempting to reassure citizens hit by the COVID-19 pandemic without scaring off businesses.

"We may be under stress now, but we cannot afford to turn inwards," Lee said. "We will adjust our policies to safeguard Singaporean jobs, but let us show confidence that Singaporeans can hold our own in the world."

The government in August announced that it was raising the minimum monthly salary required for companies to obtain a work permit for foreign professionals, known as an Employment Pass, to 4,500 Singapore dollars ($3,300) from SG$3,900.

The bar was set even higher for expatriates in the finance sector, at a SG$5,000 minimum salary. This is the first time the Manpower Ministry has imposed an elevated benchmark for a specific sector.

The goal is to prompt companies to seriously consider giving jobs to Singaporeans after the coronavirus triggered layoffs. "Many Singaporeans are feeling anxious and pressured about their jobs," Lee explained. "Their sense that foreigners are competing with them for jobs is palpable. Some feel unfairly treated when they see foreigners replacing them or taking up good jobs ahead of them."

On Monday, freshly minted Leader of the Opposition Pritam Singh, whose Workers' Party gained a record 10 spots in the 93-seat parliament in the election, questioned why the government had allowed some companies to fill the majority of their positions with expats. He suggested that the Manpower Ministry publish names of employers that do not abide by rules on international employment and seek clarification on how they intend to ensure fair hiring.

"The government needs to raise its signature in this regard, especially since the issue is such a hot-button one, often generating a lot of heat but very little light," Singh said.

Opposition parties have frequently challenged Lee's ruling People's Action Party -- the only party that has governed the country since independence in 1965 -- by questioning the PAP's stance on foreign workers. During this year's campaign, rumors swirled that the government wanted to increase immigration and raise the population to 10 million, from about 5.7 million.

Since the polls, social media chatter about companies supposedly favoring foreigners over locals has kept the issue alive.

The government's move to raise the salary threshold, however, has drawn mixed reviews. Victor Mills, chief executive of the Singapore International Chamber of Commerce, told the Nikkei Asian Review that he has doubts.

"I am not sure whether or not these salary increases will be effective in discouraging employers from employing foreign talent," he said. Mills, whose organization represents some 600 local and foreign companies, added that it would be good to have data on the policy's effectiveness.

The Singapore Business Federation, which represents over 27,000 companies in the city-state, warned the measures will likely saddle employers with extra expenses. The organization noted that while the policy might lead to the localization of some jobs, sectors facing shortages of suitable Singaporean workers will be stuck paying higher salaries for the foreign staff they need.

Singaporean business groups question the effectiveness of the new rules on foreign professional salaries and the extra costs they will entail.   © Reuters

"Businesses can build up the local talent pool through training and upskilling, while retaining foreign manpower to complement these locals," Ho Meng Kit, the federation's chief executive, suggested as an alternative.

The federation called for Singapore to remain open and connected to the world, rather than shutting its doors to global talent that brings value. "An overly restrictive policy on foreign manpower will impact trade and investments, which will in turn dampen growth of the economy and job opportunities for Singaporeans," it said in a statement.

Lee took pains to acknowledge this in his speech on Wednesday.

The city-state's openness to global talent, he argued, has contributed to its success as an international hub and created more opportunities for its own people. Without giving specifics, the prime minister also hinted that new foreign investments are on the way, covering fields like vaccine production and pandemic risk insurance.

"Even as we adjust our work pass policies, we must be careful not to give the wrong impression that we are now closing up and no longer welcoming foreigners," Lee said. "Such a reputation will do us great harm, and we have to watch this, because we are being watched."

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