‘Demand for foreign workers in S’pore likely permanent’

Singapore’s demand for foreign labour is likely to remain high due to the structure of the country’s resource-scarce economy, says an expert.

Employers, union leaders and economic experts who met at the Singapore Institute of International Affairs (SIIA) last week to discuss current issues to do with Singapore’s foreign labour policy recognised the importance of having foreign workers, SIIA said in a press statement about the event.

Replying to Yahoo! Singapore’s queries regarding the meeting, Chia Siow Yue, senior research fellow at SIIA, said “for business cycle and structural reasons, Singapore will have to depend on foreign labour. The critical question is what degree of dependence?”

Chia said the degree of dependence will be dictated by Singapore’s limited physical space, labour market demands and supply and social limits to having a rapidly growing foreign population.

He believes that work permit holders, which makes up the majority of foreign labour in Singapore, will have to be curtailed to enable more skilled foreign workers to help economic restructuring and productivity improvement.

“This means reducing the dependence on foreign workers of the services and construction sectors,” he said.

The Singapore Yearbook of Manpower Statistics published a study in 2009 showing that the highest levels of foreign worker dependency registered with the construction industry (71 per cent) and the manufacturing industry (48 per cent).

The increase in foreign labour in recent years has resulted in a growing discontent amongst Singaporeans, fighting with them for jobs, housing, and transport space.

In August 2009, Prime Minister Lee Hsien Loong said that the government would slow the pace of its intake of foreigners, maintaining foreign workers at about 30 per cent of the workforce. He cited physical and social constraints for this move.

Chia suggested that the government should focus on increasing productivity of low-skilled foreign labour as it will only serve to benefit Singapore.

“Work permit holders (except for foreign maids) are not allowed to stay in Singapore for long periods. This means a continuous churning of foreign worker pool and the loss of skill acquisition and work experience, a factor in low worker productivity.

“Foreign workers should be allowed to stay longer and incentivised to seek skills upgrading. Skilled and experienced foreign workers should be paid competitively, otherwise they move to countries that pay them better,” he said.

“A good example is foreign household maids – they come to Singapore unskilled and after years of training and experience they move on to better pay in Hong Kong and Taiwan.”