Can Singapore continue its foreign labour policy in light of COVID-19 pandemic as it did after the SARS in 2003?

On Tuesday, shared a clip from 2003 of then-Prime Minister late Lee Kuan Yew (LKY) responding to the public’s concerns about the Singapore economy during the SARS crisis.

In the clip, a resident asked why foreign workers are still being employed when many Singaporeans are not only doing the same work for lower pay but are also losing their jobs. LKY responded by saying that if foreign workers are being employed for higher salaries, “they must produce results”.

He added, “If we get rid of all foreign workers because we’ve got this unemployed Singaporeans who must be employed, I think our economy will go down in a tailspin.”

LKY assured the public that Singapore will come out on top if things are done in a sensible way.

“Don’t let the economy go down. Whatever else we do, our companies must be competitive and stay competitive. If they are dead, there are no jobs for anybody,” he cautioned.

On the question of why government agencies and government-linked companies (GLCs) are retrenching workers, the then-PM said that if companies do not retrench when times are bad, it would be setting a bad example.

“If we trim down our operations, become more productive we will be able to pay our workers and we will still be competitive. If not, we close,” he said.

That was back in 2003 during the SARS crisis which saw a total of 238 cases in Singapore, which includes 33 deaths between May and July. By 16 July, the virus was eradicated from the country.

Now, if what LKY said in 2003 was correct—that foreign workers are necessary and that companies have to stay competitive and “trim” to stay in business for Singapore to pull itself out of the financial crisis—can the same formula be applied today, 17 years later?

If we take into account how long the two outbreaks lasted, the SARS outbreak in 2003 was only a couple of months in Singapore while the current COVID-19 pandemic is expected to persist until a vaccine is found, which experts are predicting could take upwards of 18 months.

There are also far higher number of COVID-19 cases in Singapore compared to SARS, with over 40,000 cases since the virus was first recorded in February.

The effects of this drawn-out crisis on the economy—both locally and globally—is already evident, of course. This year, employment numbers showed a steep decline in a single quarter—dropping by 19,900 in the first quarter of 2020. This is the sharpest drop in employment figures since the SARS outbreak when the second quarter of 2003 saw drop in employment by 24,000.

We’ve also seen various headlines of how many businesses in a myriad of sectors from food & beverage, retail, tourism, culture, and hospitality are shutting down due to the virus bringing economies to a halt.

In fact, Chairman of the National Jobs Council Tharman Shanmugaratnam said on Facebook on 3 June, “We face a major and urgent challenge in the next 6-12 months. Many more people will be at risk of losing their jobs because of COVID-19, even as we gradually lift our circuit-breaker.”

He added that the world faces a bleak economic outlook and Singapore will be hit as well, explaining that while some industries will be hiring, we have to be “realistic”.

“The sheer uncertainty facing the world – no one can tell how long COVID-19 will last – will mean that we will have far fewer new job openings than jobs being lost – over the next year, and beyond that if we are unlucky,” said Mr Shanmugaratnam.

In April, Maybank stated that the number of retrenchments in 2020 could be between 150,000 and 200,000, which would be the highest number of retrenchments in Singapore’s history since independence. In June, Maybank Kim Eng senior economist Chua Hak Bin said to TOC that the figures were amended to between 100,000 to 150,000 job losses. This would still be the worst in Singapore’s history, compared to the 1997 Asian financial crisis when 30,000 jobs were lost and the 2008-09 crisis where 40,000 jobs were lost.

According to the MOM’s preliminary data released in late April, the 2020 first quarter unemployment numbers do not reflect the full impact of COVID-19 restrictions as the circuit breaker period only started on 7 April.

Manpower Minister Josephine Teo said to reporters on 16 June, “Even though local employment is holding up for now, we are very mindful that companies may well have implemented cost-cutting measures in order to save jobs,” she said, adding that the ministry is monitoring the situation.

Going back to employment figures, back in 2003, the non-resident labour force—meaning work pass holders—made up about 26.2 percent of the total workforce in the country or about 605,900 workers. In 2019, the number of non-resident, work pass holders in the country have doubled to about 1,412,300 workers or about 37.7 percent of the total workforce.

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More and more of the jobs in Singapore are being taken up by foreign talent, as the numbers indicate. So even before COVID-19, locals were already losing their jobs to foreigners. There’s also no reason to believe this will change as the economy begins to reopen.

Back in 2003, a resident had asked the late LKY why locals are losing their jobs while foreigners are retained by employers.

Specifically, he asked, “I cannot understand what [Singapore Airlines executive committee] is trying to do lah. Why are a Filipinos still here when we are losing our jobs and we are doing the same work at lower pay but they are still in existence and they are still working until this very day?”

The question still stands. Are locals really bad employees compared to foreign talent? And should we even adopt the same recovery strategy now as we did back then given the difference in scale of the impact of the two outbreaks?

As Singapore continues to pursue its goal of 6.9 million population, it has to continue to create jobs to attract foreigners to stay in the island state. Looking at what we have today, is this population growth economic strategy viable for Singapore’s future and beneficial to the common Singaporeans?

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