Trade and Industry Minister Chan Chun Sing sums up the Government’s position on foreign manpower in three words: fairness, diversity, and localisation.
First, there is “zero tolerance for discrimination of any kind”, he said in an interview with The Sunday Times and Lianhe Zaobao on Friday on Singapore’s approach to strengthening its workforce even as it had to remain open to talent and free trade pacts to create jobs and grow the economy.
Companies with discriminatory hiring practices will be put on the Fair Consideration Framework watch list, and their applications for foreign work passes curtailed.
The framework was introduced in 2014 after Singaporeans voiced unhappiness about foreigners taking away good-paying professional, managerial, executive and technician (PMET) jobs from them.
Second, companies that need to tap foreign manpower should avoid recruiting from only a single source.
“If we want to serve international markets, then it is only logical that businesses have diverse international teams,” Mr Chan said.
It is also good for business continuity. As travel restrictions and lockdowns during Covid-19 have shown, over-reliance on any single source of manpower can be disruptive.
Companies that have a diverse workforce also fare better at social integration, said Mr Chan.
Third, localisation – the transfer of skills to develop a pipeline of local talent – is key. For companies that need improvement in this area, economic agencies and trade associations will work with them to boost their talent development system and practices.
“Many Singaporeans have benefited from these development programmes and have gone on to leadership positions,” said Mr Chan, citing ExxonMobil Asia-Pacific and Shell Singapore as examples of multinationals whose operations here are helmed by Singaporeans.
One factor that has played a part in these multinational giants growing their presence here is the proliferation of free trade agreements (FTAs) Singapore has in place with major trading partners.
Whenever investors invest in Singapore, they do not plan on just serving the local market, nor do they plan on serving just one other external market.
The more FTAs we have… the more competitive we are in attracting investments and creating jobs.
TRADE AND INDUSTRY MINISTER CHAN CHUN SING, on the network effect of free trade pacts.
These FTAs help create good jobs for Singaporeans through their network effect, added Mr Chan.
“Whenever investors invest in Singapore, they do not plan on just serving the local market, nor do they plan on serving just one other external market,” he said. “The more FTAs we have… the more competitive we are in attracting investments and creating jobs.”
Of Singapore’s 25 FTAs, the Singapore-India Comprehensive Economic Cooperation Agreement (Ceca) has often been fodder for critics of the Government who say it opened the floodgates for Indian nationals to enter Singapore.
A lot of the misgivings about Ceca centre on the belief that it grants Indian nationals and their dependants unfettered entry into Singapore. Mr Chan countered that Ceca does not grant Indian nationals unconditional access into Singapore and immigration privileges.
Like all other foreigners, they must meet Singapore’s prevailing Employment Pass (EP) criteria, such as minimum salary thresholds, he said.
What about the call from some opposition parties – notably the Progress Singapore Party – to review FTAs, including Ceca?
Mr Chan said that while it is tempting to play to the gallery, re-negotiating an FTA is not just about what Singapore wants. “What bargaining power do we have to get something from (the other party)? Are we able to get what we want without giving up even more?”
A larger number of FTAs strengthens Singapore’s bargaining power because it provides more options, he said. “Getting rid of FTAs is not the correct antidote. Renegotiating an FTA at the wrong time is also not the correct antidote.”
Mr Chan noted that the concentration of certain nationalities in some sectors is shaped by the fact that these are high-growth areas competing for global talent.
If Singapore focuses its efforts on growing a very small set of sectors, it may stand a better chance of ensuring a higher proportion of locals in each sector, said Mr Chan.
But then, the economy becomes concentrated and fragile, and the choices of jobs for the next generation will be limited.
“If we want the diversity of choices, then we will need a certain (foreign) complement to each of these sectors,” he said, admitting it is a “heartwrenching” dilemma.
But he said it is the right thing to do – develop high-growth sectors, create better jobs for Singaporeans and train them up quickly, and give them a fair playing field to compete.
Singapore will also ensure it continues to invest in schools and continuing education so that people have the skills to stay competitive, in particular those in their 40s and 50s. The Government is also helping to give older and middle-aged Singaporeans greater help on the jobs and skills front, he added.
The latest effort to level the playing field was the announcement on Thursday that the minimum qualifying salary for EPs and S Passes, which allow foreign professionals and mid-skilled workers to work here, will be increased.
From Tuesday, firms applying for new EPs for foreign professionals need to pay them at least $4,500 a month, up from $3,900. The bar is higher for those in financial services – at least $5,000 for new EP holders from Dec 1, the first time a higher qualifying salary is specified for a particular sector.
What does Mr Chan think of some Singaporeans’ fears that firms will use the opportunity to raise the salaries of these foreigners?
“I don’t see this as a minimum salary. When we raise the headroom (for pay), it actually creates more space for Singaporeans to compete,” he said, adding that this must be done progressively so as not to shock the system. “Even as firms move towards less reliance on the lower end of the EP holders, they still need time to make adjustments.”
He stressed that Singapore is still very much open for business.
“We need to be the magnet where people still want to do business in, and do business through.
“In fact, there are things in the Covid-19 world that have accentuated our strengths: strong leadership, a stable environment, coherent long-term policies, connectivity to the world, protection of intellectual property, stable tripartite relationship, skilled workforce and, most importantly, a progressive people that embrace the world.”