Fewer foreigners wanted in Singapore
By Megawati Wijaya
SINGAPORE - Singapore's open-door immigration policy for foreign labor is
closing amid persistently high unemployment in Europe and the United States.
The island state has recently relied on foreign talent to propel its
competitiveness but local politics and global economics have motivated a
tightening of immigration rules.
One in three of Singapore's five million people is a foreigner. Last month, the
government adjusted the rules on qualification for permanent resident (PR)
status, which can be granted under a number of categories, most relevant for
foreigners being those covering (i) investors and entrepreneurs, and (ii)
professionals and skilled workers.
For investors and entrepreneurs, the government raised the
minimum investment required to qualify for PR status. Under the city's Global
Investor Program (GIP), foreigners aiming to become PRs will need now to fork
out at least S$2.5 million (US$1.9 million) in Singapore-based investments,
more than twice the previous $1 million requirement.
Their registered companies must now report an annual turnover of $30 million,
up from $10 million previously. The GIP scheme was first implemented in 2004 to
ease the way for foreign entrepreneurs to establish and run businesses here. A
parallel Financial Investor Scheme offers a package of incentives, including PR
status, to attract foreigners with net worth of $20 million or more.
Professionals applying for PR status or citizenship now also face more
stringent eligibility criteria, including higher minimum incomes and
residential requirements, several said, telling this correspondent that they
recently received one-year PR renewals instead of the five years many received
before 2010 and the 10 years commonly given prior to 2008.
One foreign professional who has worked in Singapore for six years said his PR
status was recently extended for only one year. "It feels that the government
has decided not to extend my PR after it expires next year and for the time
being has only given me a grace period to look for jobs elsewhere outside
Singapore," he said.
Others, it appears, will be given stay-or-go ultimatums. During a National Day
rally event last month, senior minister Goh Chok Tong said the government might
consider offering citizenship to select PRs and not renew the PR status of
those who decline the offer.
"In the past, we could just give you permanent residence without taking up
Singapore citizenship. Moving forward, we are going to approach some of them to
take up Singapore citizenship. If they don't, then their PR will be not
renewed. That's a better way," said Goh. As not all countries recognize dual
citizenship, opting for Singapore citizenship could pose a difficult dilemma
for some PRs.
Goh said that of the 500,000 PRs currently in Singapore, "maybe 50,000 can be
selected to become Singapore citizens, the rest can be PRs contributing to the
Goh's comments raised hackles in expatriate circles. A day after his comment, a
thread on the website ExpatSingapore ran under the header: "Singapore to expel
10% of permanent residents". Goh later hedged his statement, saying that the
10% figure mentioned was "only for illustration purposes" and that his comment
was a "general observation to illustrate the point that the government would be
managing the inflow of PRs and would encourage some of those who are already
here to become Singapore citizens."
The changes mark a significant policy reversal. As recently as 2008, the
government recruited foreign white-collar workers to fill up vacancies in its
various high-end industries, including the finance, biotechnology, biomedical,
and alternative-energy sectors. Low levies on foreign workers also made it easy
for companies to hire low-cost unskilled foreign workers to work in
manufacturing, construction and service industries.
But the global financial crisis has resulted in sharp competition for well-paid
jobs and with many companies in retrenchment mode a divide has opened between
locals and foreigners. In 2008, a poll carried in a local newspaper revealed
that nine out of 10 Singaporeans feared losing their jobs to foreign
professionals and opposed government efforts to attract more of them. Nearly
43% said in the same poll that they believed the government was more concerned
with the welfare of foreigners than its own people.
The National Trade Union Congress (NTUC), a local labor movement, has publicly
told Prime Minister Lee Hsien Loong that local workers are increasingly worried
about new immigrants taking their jobs, reducing local wages and generally
increasing workplace pressures. The local Chinese daily Lianhe Zaobao has gone
a step further through advocating the implementation of pro-local policies.
Local over foreign
The government has apparently taken onboard that nationalistic advice. In July,
foreign levy rates on work permits for low-skilled workers were raised by
between $10 to $30. The levies are scheduled to continue rising through 2012 to
around $100 per worker for foreign manufacturing and service sector workers.
Rates for first- and second-tier labor were raised to $100 and $120, up from
the previous standard rate of $50. Those rates will rise as high as $250 by
2012. The purpose of the higher levies is to encourage Singapore companies to
rely less on foreign workers and upgrade their productivity, Finance Minister
Tharman Shanmugaratnam said.
Singapore's trade-geared economy has boomed its way out of crisis. Gross
domestic product (GDP) grew 18.8% year-on-year in the second quarter and 10.3%
in the third quarter. The government has forecast GDP growth this year will hit
between 13% to 15%, a dramatic uptick from last year's 2% shrinkage.
Yet the local-versus-foreign debate has not subsided and has become fodder for
the political opposition to hit the People's Action Party (PAP)-dominated
government. Locals vent their frustrations anonymously in online forums, often
blaming foreigners for the country's 2.2% unemployment rate, declining local
wages, inflated residential rental rates, and stretched public resources such
as health care facilities.
An article in the Straits Times last month underscored local perceptions that
foreigners are fickle, fleeing the city-state during times of crisis and
arriving in waves for economic booms. Alvin Yeo, a member of parliament,
recently echoed those nationalistic views: "Among the local community, they are
saying: 'These [PRs] are treating Singapore as a hotel.'
"We citizens live here. If anything happens, we can't go anywhere else. But PRs
have the best of both words: they can pack up, go back to their own countries,"
said Steve Chia from the opposition National Solidarity Party. "[Only] if they
take up citizenship, they'll cut their ties to their home countries and sink
Brian Dalby - a British PR who has been in Singapore for 16 years, wrote to
local paper putting the other side of the case. He said that despite "a deep
respect" for Singapore and that he contributes "fully to the economy", he
cannot erase the identity, relationship or culture from the country of his
birth, Britain. He must also remain British to keep its pension. "While I
desire to take on Singaporean citizenship, I have no desire - nor can I
financially afford - to renounce my British citizenship," he said.
Tighter immigration regulations are already taking effect. Last year, 132,200
foreigners applied for PR status, but only 59,500 were approved. That was a
significant dip from the 79,200 who were given status in 2008. Over the
12-month period from April 2009 to the end of March this year only 46,300
foreigners were granted PR status.
"I think we should consolidate, slow down the pace," Prime Minister Lee said at
a National Day rally in August. "We can't go on like this, increasing our
population 100,000, 150,000 a year indefinitely. We should give Singaporeans
time to adjust."
Striking a similarly nationalistic note, Home Affairs Minister Wong Kan Seng
said in parliament last month that the government must "ensure the number of PR
is not going to be significantly large and overwhelm the Singapore citizen
At the same time, the cost of being a foreigner in Singapore has risen
substantially. On top of existing citizen-only privileged policies in housing,
childcare, and education, the government has recently raised the school fees
for PRs and other foreigners, widened the gap between healthcare subsidies for
citizens and PRs to 20%, and excluded PRs from buying new Housing and
Development Board (HDB) flats and from receiving government housing grants and
state subsidies for property upgrades.
With general elections expected within the next six months, some see the
government's pro-local policies as part of the PAP's election strategy.
"The timing for fine-tuning may be coincidental to be near the election time.
But this is also because the Singapore government always gathers information
from the public," said Yohanes Eko Riyanto, an associate professor at Nanyang
Technological University's economics department. "They know about the [locals'
unhappiness with] foreigners in competition for jobs and realize they must deal
with it soon before the situation gets out of hand."
Megawati Wijaya is a Singapore-based journalist. She may be contacted at [email protected]