by Foong Swee Fong
The New Year message by late Lee Kuan Yew (LKY) in 1982 was to have a wholly Singaporean workforce by 1991. The reason he cited was that it was not desirable socially, politically and economically to depend on a large migrant workforce, citing the examples of France, UK and even West Germany, which had large migrant workforces and were facing huge social problems. Other the other hand, he noted that Japan did all the dirty work and heavy lifting itself and the workers were more productive and society had no social problems or riots.
In that new year message, he said that work permits would not be renewed the following year and would be allowed to expire. Thus all non-traditional work permit holders will leave by 31 Dec 1984 except for construction and shipyards which had until 1991 to be wholly Singaporean. Companies had to upgrade, mechanize, automate, computerize, make better use of their manpower, or relocate.
A few years earlier, in the 70s, then finance minister, Hon Sui Sen also said that having a large foreign workforce was not desirable, it was better to depend on ourselves.
But despite our founding father’s reservations about foreign workforce, we are today deluged with foreigners. What happened?
A few years after LKY’s bold pronouncements in 1982, Singapore experienced its first major recession. Economic growth suddenly contracted to negative in 1985 after enjoying rampant growth the past two decades, including the preceding year.
This was due to a combination of factors including high labour cost, over building in the preceding few years resulting in a property glut and a recession in the western economies.
Singapore set up an economic review committee chaired by then Minister of State for Trade and Industry, a rather young Lee Hsien Loong, and responded by slashing labour cost, cutting corporate tax and personal income tax of high earners, employers contribution of Central Provident Fund as well as deregulating and privatizing (no doubt influenced by the Neo-liberal movement in the US and UK) many government entities except those related to defence and utilities. As a result, Singapore Airlines, DBS, SingTel, SMRT, Capitaland, Keppel Corp, Semb Corp and etc, as we know them today, were spawned and their holding company, Temasek, grew into a behemoth. Table from Rapid Growth in Singapore’s Immigrant Population Brings Policy Challenges
Economic growth slowly picked up in 1986 and from then on growth picked up again. But in the process, the inflow of foreign workers was relaxed and worse still, with a vengeance, so that the proportion of foreign workers before the early Eighties, which was below 10% shot to almost a third within the next decade, and still growing.
Why didn’t LKY put a stop to it, feeling so strongly about the ill-effects of depending on foreigners?
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