Singapore’s work pass changes show foreign talent importance

foreign talent singapore

Disclaimer: Opinions expressed below belong solely to the author

The government has just announced adjustments to the country’s work/employment pass schemes and while they’re far from revolutionary, they do reflect how important foreign talent is to Singapore of today and of the future.

Many people reacted negatively to the news, probably mostly driven by envy, particularly when substantial figures like S$30,000 per month — that is a requirement under the new Overseas Networks & Expertise Pass — are being thrown around.

But the fact is that the island, where pretty much everybody is a descendant of recent immigrants, is going to wither and die without fresh blood from abroad.

Infertility? No problem.

Some like to complain that Singaporeans should have more kids and that the future lies not in importing outsiders, but ensuring that enough locals decide to have larger families.

These assumptions fail to find any ground in reality, though. The fact is that all developed and rapidly developing nations are experiencing a massive slump in the number of newborns, that is largely unaffected by public policy.

I often hear how the reason for this are rising costs of raising children, but that is simply not true if you consider the appalling conditions past generations had frequently half a dozen or more offspring in.

It certainly wasn’t easier or cheaper back then in relation to what they could afford.

A poor Chinese family at Lorong Tai Seng, 1957
A poor Chinese family at Lorong Tai Seng, 1957 / Image Credit: National Archives Singapore

Wealthy generations of today have both more control over their lives and greater personal ambitions.

Some become rather selfish, filling their personal needs with pets instead of kids, while others prefer to pour all of their attention on one or two children (instead of five or six), saving rest of their time for fulfilment of their own professional goals — what also benefits the domestic economy.

It would be silly to fight it, as it would require women to return to being stay-at-home mums, removing a good chunk of the population from the workforce again — and I don’t think many would be happy about that either.

It makes no sense to turn the currents of socioeconomic change, so the public policy has to be calibrated to flow with them instead. In this case, through immigration policy.

Nation of immigrants

Quite frankly, I don’t know why so many people exhibit vocal opposition to immigration, considering that virtually the entire Singaporean society was built on the backs of recent immigrants from China, India or parts of Malaysian Peninsula — not to mention the rest of the world.

singapore immigrants
Immigrants working at the Tanjong Pagar Wharf, Singapore / Image Credit: National Archives Singapore

After all, Singapore wasn’t even conquered or otherwise enslaved, but simply purchased by the British and developed into a thriving free port of the crown, attracting foreigners who are seeking better life.

This spirit ought to still be alive today — not only as a matter of tradition of heritage, but utmost necessity.

As the city-state doesn’t have any natural resources, agriculture or other forms of innate, domestic wealth, it depends on its competitive edge in services. It is, therefore, powered entirely by brainpower of its populace.

Foreign customers would not come to Singapore if companies in the city-state were unable to deliver the required services, for which qualified personnel is required. Similarly, foreign capital would not find the island a suitable place for investment if investors were unable to employ people needed to turn a profit on it.

How these people are provided for — whether by local stock or foreign immigration — is irrelevant to these businesses. But it does not take long to realise that importing human capital has significant advantages.

Driving economic growth, protecting local jobs

Even ignoring the lack of will of having more children and assuming that some form of public policy could encourage locals to have more offspring, the problem is that it takes a long time to grow a sufficient, adult workforce.

At the same time, no public policy can really control its qualifications to match them with the prevailing demand of the time.

In other words, the nation is busy spending vast sums of money over 20 years required to raise a single adult capable of low-level entry into the labour force — and it still has no guarantee the investment will pay off.

At the same time, foreign investors are not going to wait forever to maybe one day get enough people they need. They will simply go elsewhere, where the workforce pool is larger.

And with them, they will take not only jobs for immigrants but also locals, as well as taxes, property rental expenses or outright real estate investment — all paid to someone else.

Immigration policy, however, allows the authorities to respond to the needs of the economy as they manifest themselves, and attract qualified talent that is in demand, capable of entering the workforce immediately, contributing to Singaporean economy without having burdened it in the years prior.

Meanwhile, regulation ensures that those who fail do not become a liability to the society, but rather return to wherever they came from. Conversely, those who prove themselves may even one day become Singaporeans themselves.

In other words, immigration calibrated to the demand of local companies provides virtually only upsides with no downside risk, as redundant foreigners are forced to leave the country, while the successful ones may contribute to it just like the pioneer generations.

It is also partly why employment situation in Singapore was so good during the pandemic, because approximately 200,000 foreigners found themselves retrenched and needed to return to their home countries, while locals kept their jobs.

Paradoxically, then, immigrants help Singapore drive its economic growth and yet provide a buffer for local employment in dire times, as they are the first to take the fall in case of reductions, protecting Singaporeans from joblessness.

It is in this context that you have to judge the latest policy adjustments.

New passes are a welcome step forward

Image Credit: Straits Times

Both the new Overseas Networks & Expertise Pass, announced by Minister Tan See Leng, as well as changes to EP requirements — most notably easing some requirements for qualified specialists in professions exhibiting shortages of personnel — are bound to be welcomed by business owners starved of talent.

Singapore is now one of few countries where labour market is still red hot, dictated by gaps in labour supply, particularly in technical occupations.

And while ONE is not going to change this situation dramatically — after all, minimum salary requirement of S$30,000 restricts it only to the select few — the extension of EP validity for those in in-demand professions to five years (and earning at least S$10,500) may hit the sweet spot of the mid/high tier talent that both local businesses as well as the society at large could benefit from having in their midst.

Let’s not forget that after all, the diminutive city-state is competing for brains with the largest, wealthiest, most ambitious and most innovative economies in the world — and if it lets them slip away, it is bound to find itself on the sidelines one day.

After all, without the right people, it would never be what it is today. And it can’t be in the future either.

Featured Image Credit: Reuters

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