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Dr Vivian Balakrishnan Image: Ministry of Foreign Affairs Singapore

Questions about Dr Vivian’s scheme to help companies hire Indonesians

Earlier on 12 January, Foreign Minister Dr Vivian Balakrishnan discussed possible bilateral cooperation in the field of Information and Communication Technology (ICT) and the digital economy with Indonesia’s Minister of Communication and Information Technology Rudiantara.  Dr Vivian highlighted how Singapore companies based in Indonesia might offer opportunities to talented students from Indonesian educational institutions in the field of digital technology and ICT.

He again brought up the point when he met with his foreign affairs counterpart, Minister Retno Marsudi for lunch.

In the reports that followed his visit to Indonesia, many were worked up over the proposed scheme that Singapore hopes to develop with Indonesia.

Dr Vivian reportedly said during his meeting with Minister Retno, “We believe Indonesian universities and technical institutes will produce many graduates with digital skills and we are thinking of launching a scheme, in which Singapore companies – which are looking for talent – will be able to recruit talent here, deploy them here, and provide services for the rest of the world,”

He said in his statement that Singapore government intends to launch a scheme to help the Singapore companies to employ Indonesians.

The scheme itself seems weird. One, companies that are based in Indonesia can easily find Indonesians to fill the jobs through local job advertisement or job agencies, why is there a need for Singapore government to intervene with the talent matching process for companies based in Indonesia? Two, it is only hard for companies based in Singapore to find Indonesians to work offshore for them.

Now, some have hypothesised that Indonesians will be recruited to Singapore to work, while some have defended the foreign minister by stating that the workers would not be employed by the companies to work in Singapore but "here" in Indonesia where Dr Vivian was making the statement at.

The latter is likely to be true, but as the minister has stated in his last part of the sentence, that the talent would be providing services for the rest of the world after being recruited and deployed "here" in Indonesia by the Singapore companies.

So while workers would not be coming to Singapore under work permits or employment passes but job vacancies would likely be shifted over to another country to lower operating cost.

In the recent lecture by Prof Shih Choon Fong from the National University of Singapore, he said that companies should be encouraged to move aboard to tap on the global market and should be supported by the government through setting up business launchpads. Indeed, this is a much-needed approach to ensure Singapore's survivability in the fast changing economy of the modern world. 

And of course, companies should always think of ways to lower operating cost and optimise labour usage. But as a government elected by the voters, one has the obligation to fulfil its duty for the masses to ensure that companies will try to work within its means to ensure jobs will remain on shore.

However, if a company has to survive by cutting jobs locally and shifting its operations overseas, hiring workers from foreign lands to reduce cost. Why does the government have to go an extra mile to support such moves? Especially given that the country would benefit lesser with foreign employees and non-taxable operations outside of Singapore's shore.

Companies cannot say graduates are too expensive for them to employ in Singapore because it would only mean their business model is not ideal or efficient. By assisting such companies to survive through offshore labour means helping to kill off ethical competitors that hire local workers despite the extra operating expenses. Companies have to take into consideration of the due wages it has to pay, of course, other costs such as rental is something the government has to look at.

Companies also cannot say that graduates are hard to find in Singapore because that would be the problem of the government. In Wikileaks, it is revealed that MOE has a hidden quota of 20-25% of degree graduates because it thinks that Singaporean labour market has no demand for the graduates. For years, citizens have been obtaining degrees via private universities to seek higher wages and job opportunities. But to the credit of the government, the number of universities is going to be increased to six as to increase the percent to 40% by 2020.

So while it is dutifully right to assist companies in expanding market opportunities and building up business connections. It seems horribly wrong to be seen helping companies to shift potential jobs out from Singapore. Worse when it is the government helping companies to circumvent the populist labour quotas which itself would gradually impose on Singapore companies by outsourcing overseas.

Of course, if the IT workers in Indonesia are only to be employed for the purpose of the local market, it would make perfect sense for such a scheme to be proposed. But frankly, if what Dr Vivian said was taken out of context by the online community, the press would have been long out in force to defend the actual intention of the scheme. But so far, with the silence on the matter, the truth might be worse than what's being put out to be.

Going back to Prof Shih's lecture on building a global brand by Singapore companies. Innovation is the only way out for Singapore, given our limited resources and changing global trends. What kind of IT products or services are we looking to move out of Singapore or to create in Singapore and what kind of R&D would Singapore promote in this current climate?

Ideally, Singapore's companies should climb the value chain, and Singapore employees will be able to carry out the high value adding jobs. But without a proper union system, and labor rights movement, employees will probably be forced to face a disempowering situation where companies call the shots with various options to resolve its labour demand.