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A Possible Indirect Admission of a Strategic Policy Failure

By Chua Suntong

On 25 September 2012, the Ministry of Trade & Industry (MTI) released a 23 page occasional paper on Population & Economy.

The report might be categorized into 3 parts. Part 1 from Pages 1 to 9 presented the importance of macroeconomic growth. Part 2 from Pages 10 to 16 examined the impact of changing demographics in workforce composition. Part 3 from Pages 17 to 23 described the role of foreigners in the workforce.  

During the Prime Minister’s National Day Rally Speech on 24 August 1997, the future Emeritus Senior Minister (ESM) announced a change in the population policy from immigration being a supplement to an immigration-centric policy.

The ESM wanted to bring in huge numbers of foreigners to take up Professional, Managerial, Executive & Technical (PMET) positions in Singapore. He described these foreign PMETs as foreign talents (FTs).

The crucial part of the ESM FT policy was that a big marginal increase in foreign PMETs was supposed to generate far bigger proportionate marginal benefits. For example a doubling of foreign PMETs in a certain area was supposed to lead to a quadrupling of economic value.   

In September 1998, the Ministry of Manpower (MOM) re-categorized the non-resident workforce into P, Q & R passes. P & Q Passes were for PMETs while R Passes were for lower-end foreign workers. In 2004, a S-Pass PMET category lower than Q Pass was added.

The official response to criticism of the ESM FT policy from 1997 to 2011 was generally as follows:

A1) Ignoring claims that the foreign PMET inflows were displacing local PMETs. When critics requested less foreign PMETs, the government rejected these requests by stating more R Pass foreign workers were needed.

A2) Promoting workforce diversity to produce so-called buzz & vibrancy. The value of this supposed vibrancy was only explained in a general sense & not in details.

A3) Describing critics as isolationist xenophobes. The Government adopted an all-or-nothing puritanical approach to bringing in foreign PMETs. Any form of moderate reduction was rejected 

A4) Mentioning foreign reports supporting skilled immigration. However, these reports were always describing a foreign situation. The mainstream media almost certainly never highlighted any similar report in the local context.

Due to Singapore‘s situation, there would be a conventional demand for some PQS holders at any time.

The crucial difference between in the conventional sense & the ESM FT context was whether the large additional increase in PQS holders under the ESM FT policy generated a greater-than proportionate economic value increase.

Both ESM FT Policy supporters & critics agree the Government has spent extensive effort & resources to proactively bring in large numbers of foreigners to take up PMET positions. The main disagreement was whether there was a need for repeated large intakes. 

After 1997, there was a big increase in PQS holders becoming Singapore Permanent Residents (SPRs) & Naturalized Singapore Citizens (NSCs). Since both SPRs & NSCs were grouped together with home-grown SCs as part of the resident local workforce, measuring the PQS economic value became complicated.

In the paper, MTI stated PQS holders had helped to set up the local biomedical science industry. After the initial setup, the number of industry PQS holders was reduced & employment of resident locals in the industry increased.

MTI also claimed access to foreign manpower led to creation of higher & better paying jobs for locals. However, MTI did not state the number of industry PQS holders who became SPRs & NSCs.

Therefore it was completely possible the so-called biomedical industry localization was caused simply by reclassifying non-residents as new resident locals. In addition, the other examples used by MTI in the paper did not explain how the large inflow of foreign PMETs in all sectors & functions benefited existing local PMETs. 

Foreign reports on skilled immigration in foreign situations generally include some or all of the following characteristics:

B1) Annual arrival numbers of skilled immigrants, their sector classifications & monetary value generated.

B2) Type & number of jobs generated for existing locals by skilled immigrants. Unlike Singapore, foreign reports tend to define locals according to place of origin so as to prevent possible statistical distortion caused by foreigners obtaining residential status.    

As MTI was apparently unable to present relevant details & statistics on benefits after 15 years, therefore this paper might be an indirect official declaration that in economic terms, the ESM FT Policy was a repeated failure.

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