Singapore still wants smart, rich expats

pic by AFP

SINGAPORE appears to be shutting its doors to foreign talent just as the exodus of expatriates from Hong Kong gathers pace.

The government recently tightened visa rules for white-collar workers, adding hoops to a process that employers already complain is too onerous.

Will the city-state miss its golden opportunity to scoop up Hong Kong’s disgruntled elites? Hardly. It’s a different slice of the labour market that will feel the pinch from these stricter measures.

Within a matter of weeks, Singapore introduced a series of dramatic changes to its work visa for highly skilled foreigners, raising the minimum salary requirements and introducing a points system not unlike what’s used in the UK and Canada.

Starting next year, new applicants will need to accumulate a certain score across a range of criteria that includes educational qualifications and skills, as well as salary relative to comparable locals (the higher the better).

Companies willing to shell out big expat paycheques must have found truly exceptional talent, the thinking goes. Another important assessment is whether an applicant’s nationality contributes to company diversity.

The new regulations come as economic anxiety hits an apex, with inflation rising at its fastest clip in almost a decade.

But years before the surging price of lattes and staggering electricity bills, locals bemoaned widening income inequality as aspirations of homeownership fell increasingly out of reach.

It’s also hard to un-see the two-toned Rolls Royces roaring down Orchard Road when you’re puttering around as a Grab driver in a weathered Camry after a full day’s work.

As in many other rich countries, the pandemic brought those fears to the foreground. Social media buzzed with worries about losing jobs to foreigners and nationalist rhetoric started becoming more common.

The concern isn’t unjustified: Non-residents comprise 27% of a population of 5.5 million, and foreigners make up more than 20% of the professional labour force.

In the most basic terms, there are two different types of expats: Those willing to get paid less than Singaporeans, thus undercutting the domestic workforce, and the handsomely compensated executives from abroad who make more.

Employment-pass holders in the first group often do unglamorous but decently paid IT and back-office work in the financial sector.

Expats in the second category are more likely to be the MD and wealth-advisor types coming in from Hong Kong.

Which set is more vulnerable to the new rules? Think about it: Raising the minimum salary requirement for the financial sector to S$5,500 a month — S$66,000 (RM203,291) a year — isn’t going to hit fancy executives, who pull in several hundred thousand of dollars, if not more.

These are exactly the sort of residents Singapore wants, splashing out on spacious apartments, BMW leases and pricey bottles of wine. In 2020, then-Transport Minister Ong Ye Kung, who has since become the Health Minister, said in Parliament that the median wage for Singaporeans in the financial sector was S$6,000 to S$8,000 a month, compared to S$8,000 to S$10,000 for permanent residents and foreigners.

What will narrow is the pipeline of expats from the first category, who were getting paid right at the cut-off and below.

Fewer such workers will open up opportunities for fresh graduates and middle-class Singaporeans to get jobs they should be perfectly capable of doing: Singapore is a highly educated country, whose graduates gravitate toward engineering, business and the sciences.

While it’s true that the city-state’s shrinking population may not be able to meet all of the demand in the labour market, locals certainly should get the first bite.

On social media, the government is urging mid-career professionals to reskill.

The new nationality requirement is a curious one. Though the parameters apply to candidates of all backgrounds, they appear to be aimed at deterring companies from hiring large clusters of Indian, Chinese, British or American employees.

Singapore’s Indian community, in particular, has become a target of racist attacks in recent months amid accusations of unfair competition for jobs.

“The perception exists in large part because the Indian middle-class professional is very visible — and perceived as different to the local-born Indian,” said Laavanya Kathiravelu, an associate professor in the School of Social Sciences at Nanyang Technological University in Singapore.

“Thus, highly successful Indian immigrants, even after naturalisation, are still often perceived as ‘outsiders’ to the nation, stealing jobs from locals.”

Don’t forget that many Indians in Singapore are top-end earners, according to Binod Khadria of Jawaharlal Nehru University in New Delhi.

It’s hard to know whether there’s any justification for these suspicions. The government does not provide public data on the nationality of employment pass holders.

Amid lengthy debate about the role of foreign workers in Singapore’s labour market in July, Manpower Minister Tan See Leng told Parliament that the share of Indians in this category had risen quickly, from about one-seventh of the total in 2005 to a quarter in 2020.

By contrast, those from China, another top nationality, had remained relatively steady. In a roundtable attended by Bloomberg Opinion last week, Tan said that sharing nationality information could compromise Singapore’s “security interests” and “competitiveness”.

The only way to understand this view, it seems, would be to think of the city-state as a company, unwilling to divulge its staffing on sensitive projects. In reality, the absence of a transparent discussion in the public domain risks sowing skepticism, even if the points system offers the business community a more predictable framework to plan hiring.

The biggest mystery may be how such an inwardly oriented, pro-labour policy made it through Singapore’s mill of globalist technocrats in the first place, without much visible opposition from the business community.

The changes being introduced to protect domestic wages are nothing short of a wish list for advocates of reform to skilled migrant visas in the US, who meet stiff resistance from well-funded tech and corporate lobbies.

Tan said the new rules were well signalled months, if not years, in advance, and that corporations are on board. Some may simply be intent on finding loopholes. But make no mistake about the direction of travel.

The world’s smartest, richest expats will always be welcome in Singapore. Whether they can hire below them to their liking will be another matter entirely. — Bloomberg


This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.