Why Singapore won't be hiring a lot more foreign workers in short term

Posted at 05/24/14 6:13 PM

SINGAPORE – There are no immediate plans to revisit the quota that limits foreigners to a third of this city-state’s labor force over the long term, Finance Minister Tharman Shanmugaratnam told foreign journalists Friday.

“I think it’s too early to revise that target of one third… Society has to decide how many foreigners it can have… You cannot sort of predict well in advance what should be the target,” Shanmugaratnam said when asked about chances of a rise or reduction in the restriction on manpower from overseas.

The cap has restricted the number of foreigners who may be hired and has raised levies for doing so.

There is a total foreign workforce of 1,321,600, as per Singapore’s Ministry of Manpower as of December 2013.

Total Singaporean labor force is at 3.44 million in June 2013, according to the Ministry of Manpower.

Filipinos comprise a small fraction of these foreign workers at 180,000. They are in the areas of food and beverage, IT and banking. Forty percent or less of them are into household services.

Shanmugaratnam, who is also a deputy prime minister, recalled Parliament's discussions on population early last year: “We had a very good debate on this… Major debate in Parliament, and the conclusion – the Prime Minister (Lee Hsien Loong) gave a concluding speech – was that we should continue with our policy for now of slowing down significantly the growth of the foreign labor force. Not turning off the tap, but slowing down very significantly. And then we decide later on what should happen after 2020.”

He said the numbers of foreign workers recruited may vary year-to-year, especially in the more fast-moving sectors like construction, which he described as having “a very strong cycle.”

But overall, it may be too early to decide, he said.

“It’s too early to decide. It depends on our economic structure, it depends on our society. You can’t decide it so far in advance. But we must move in a certain direction and the direction we are moving is that it’s now slowing down very significantly, the inflow of foreigners, because we’ve already reached for the high level. And I think that is the practical approach,” Shanmugaratnam said.

The briefing was meant for journalists from 13 countries attending the Asia Journalism Fellowship based in the Nanyang Technological University and supported by the Temasek Foundation.

The foreign labor issue has gained prominence over the years with complaints of crowded trains or buses, and increase in home prices or pricier hospital care.

This issue was spotlighted in December 2013 when violence broke in the city-state’s Little India district. Of late, the issue on foreign workers manifested itself again in negative online posts against the organizers of planned celebration of the Philippine Independence Day at the Takashimaya shopping district.

The government has since prosecuted those suspected of instigating what has been known as the Little India Riot, and unveiled plans of big recreation centers in the suburbs, in a bid to distance the laborers from the congestion of the cities and offer them alternative places to gather during rest days.

Meanwhile, Prime Minister Lee has chimed in on the Independence Day controversy saying the critics of the planned event do not constitute majority of Singaporeans.

But in a survey of the Straits Times newspaper this March on the midterm performance of the Singaporean government, the issue on foreign workers was one of two hot-button topics – along with transport – that caused anxiety across all Singaporeans surveyed.

Dr Gillian Koh of the Institute of Policy Studies was quoted by the same newspaper as saying the issue of foreign workers is something that interacts with other policy areas, the proper management of which may take the heat off the foreign workers question.

The Times survey, released last month, involved 500 citizens and was done by a market research firm.