Protectionism impractical for S’pore’s progress, foreign talent still integral in developing local technology: Trade and Industry Minister Chan Chun Sing

Insular, “protectionist” measures against skilled foreign workers will not serve Singapore’s growth in the long run as an economy that has long thrived on an “open-door” policy, particularly in light of a global shortage of tech talent supply, said Trade and Industry Minister Chan Chun Sing.

Responding to a supplementary question by West Coast GRC Member of Parliament Patrick Tay regarding whether whether there are, or whether there will be, controls in place in the [email protected] initiative to “ensure that Singaporean PMEs are not compromised or prejudiced against”, Chan said that while the government “will never stop putting Singaporeans at the heart of everything we do”, Singapore “will almost certainly be left behind” if the Republic refuses to absorb skilled foreign workers at this point.

Citing countries such as France and Thailand that have rolled out special visa programmes for skilled tech professionals from abroad, Chan said that Singapore only has “a small window to build a critical mass of high-end professionals, start-ups and companies” in light of such competition.

“There will only be a few such nodes globally. How we do today will decide whether we make it as a tech hub, or not,” he stressed.

Tay, a People’s Action Party (PAP) member and an assistant secretary-general of NTUC, suggested that the government’s focus ought to be on helping and assisting Singaporeans, especially “amidst a sense of uncertainty and a quite dismal outlook in terms of employment and job market”.

Chan replied that “it is precisely because of the uncertainties with the economic outlook that we have stepped up our gears to make sure that we build the next generation of companies in this sector”.

“At this point in time, I would say that this forms part of our surgical measures to help companies transform and expand their market presence,” he added.

Chan noted that while Singapore’s economic growth rate is currently being dragged down by the global electronics downturn, the wholesale and retail trade, and some of the engineering sectors, the Republic’s financial services, the ICT sector, and many of the high tech industries are thriving.

“This is why we must make sure that when we lift the bottom, we must never cap the top,” adding that government programmes such as [email protected] will give local firms “the best possible chance to succeed, and will not make them lose out to other companies from other countries who are competing for global talent”.

When asked by Tay as to whether MTI will consider expanding such initiatives for skilled foreign workers to other sectors such as finance, Chan said that while the government is open to such a prospect, he clarified that such programmes will not apply to S-Pass and E-Pass holders.

“We are not even talking about the average EP people … We are talking about people who can manage programmers by the hundreds and thousands,” he said, adding that such workers are expected to have expertise in managing “global teams”.

Last year, Chan said that the Government wants to encourage a shift towards employing more higher value-added foreign workers (i.e, foreign PMETs).

Noting that raising the skill level of foreigners in Singapore is a knotty issue, as Singaporeans worry it will intensify competition for good jobs, Chan said that the answer is to ensure locals are quality workers, too.

“We cannot dumb everybody down, right? That’s why we work so hard to move our people up.”

Some of the “higher value-added” foreign PMETs identified are those in IT, wealth management and biotechnology areas. Chan hopes these foreign PMETs would help boost Singapore’s capabilities in those areas.

At the same time, companies here which employ such foreign professionals should help transfer expertise to locals, Chan suggested.

“I’ve no problem employing the high-skilled foreigners to come here – we have done that ever since the 1960s – but there must be a process of localisation whereby my own domestic workers, my own local workforce, can progress,” he added.

When asked about the balance of foreign vs local workers in Singapore, he said that while there is “no magic number”, where we are “at the balancing point now is about one-third (foreigners), two-thirds (locals).”

Proportion of PMET retrenchment hits all-time high as number of foreigners on S-Pass increases

Meanwhile, the Ministry of Manpower’s latest labour market report in Mar revealed that Professionals, Managers, Executives and Technicians (PMETs) accounted for a staggering 79.3 per cent of retrenched residents in the fourth quarter of 2018.

This brings the total figure for retrenched local PMETs to 75.8 per cent of all retrenchments for 2018, a record level since such data was first published by MOM in 2006. In 2017, it was 72 per cent.

Some 58 per cent of retrenched residents had degrees, while 19.9 per cent held diplomas. The bulk of the individuals who were retrenched were aged 40 to 49 (34 per cent) and 50 and over (33.6 per cent).

The industries with mass retrenchment exercises tend to be dominated by PMETs, according to MOM.

According to NTUC assistant chief Tay, many staff who were laid off in such sectors last year “are in the executive and technician roles”.

Observers said PMETs are now also vulnerable to uncertainties brought upon by local and global economic trends, and more needs to be done to mitigate the risk of them being displaced.

DBS senior economist Irvin Seah suggested raising the minimum qualifying salary for Employment Pass holders and increasing the length of time firms must advertise jobs on the national jobs portal before they can apply to hire a foreign professional. This would minimise the chances of companies substituting local PMETs with foreign ones, he said.

The number of foreign S-Pass holders grew by 11,100 across all sectors.

“The increase was led by the Services sector, with the highest growth seen in Administrative & Support Services, Food Services, Information & Communications, Professional Services, and Transportation & Storage,” MOM said.

Even though figures by MOM show that local employment does seem to have improved, Singapore’s 6.9 million White Paper on population’s estimated target of 20,000 new citizens and 30,000 Permanent Residents per year is still in force. This means that many of the former foreign workers are now PRs or new citizens will be counted in the figures of employed residents.