In an opinion piece today, Straits Times Associate Editor Ravi Velloor made an attempt to defend CECA, the free trade agreement Singapore signed with India on 29 June 2005 (‘Singapore GE2020: The long view on Ceca and other free trade agreements‘, 19 Jul).
According to his LinkedIn profile, Velloor graduated from St Joseph’s College in Bangalore and did a Master’s degree in Sociology at the Delhi School of Economics. The ST article does not include a note or disclaimer about Velloor’s educational background.
The CECA was a subject of much debate during the recent general election (GE) amid a wave of retrenchments and unemployment due to the COVID-19 pandemic. During the live debate, Progress Singapore Party’s (PSP) Francis Yuen said, “We have a lot of foreign professionals, managers, executives and technicians (PMETs) working here. I think there are about 400,000 of them, and yet we have about more than 100,000 of (local) PMETs who are out of a job.
“We believe that we need foreign PMETs to complement but we need to believe that there is opportunity for us to slow it down.”
The PSP, as well as the Workers’ Party (WP), People’s Voice (PV) and several other opposition parties had come out to say that they think Singapore’s free-trade-agreements should be reviewed, singling out CECA in particular as contributing factor to the unemployment rate of citizens.
However, Velloor claimed in his article, “Today, there is no denying that both sides gained (from Ceca). If you look past visuals of the large number of Indian faces at lunchtime in areas like Marina Bay Financial Centre and the IT-concentrated Changi Business Park, Ceca has delivered for Singapore,.”
“Official data on Statlink shows bilateral trade rose from $16.6 billion in 2005 to $24.3 billion last year. Singapore companies’ investments in India, a mere $1.3 billion in 2005, rose to $60.9 billion by the end of 2018.”
It’s not known, however, how much of the total investments came from the GLCs of Singapore.
He continued, “More than 80 per cent of listed offshore bonds by Indian issuers are listed on the Singapore Exchange and Singapore-based investors have assets under management in India valued in excess of $100 billion.”
Then, there is banking. Velloor shared that DBS Bank now operates 34 branches across 24 Indian cities.
“In the Indian financial year that ended in March, DBS’ net India revenue rose 24 per cent to 14.44 billion rupees ($272.3 million) while net profit rose more than sixfold,” Velloor noted.
But according to statements released by DBS Bank last year, its subsidiary DBS Bank India only made a net profit of INR 14.5 crore (S$2.8 million) for fiscal year ending 31 Mar 2019 against a loss of INR 533 crore (S$102 million) for the previous fiscal year of FY2017-18 (‘DBS makes net profit of S$2.8m in India in last fiscal year thanks to CECA‘).
Velloor: Temporary movement of nationals not unusual in FTAs
Velloor argued that much of the Singaporean misgivings about CECA came from a misunderstanding of the listing of 127 professions under the Temporary Movement of Natural Persons chapter. Other free trade agreements have also included such commitments on professionals, he said. CECA in fact has the shortest duration – just a year – committed, he said.
“Nevertheless, this has raised fears of a flood of Indian professionals arriving to steal well-paying jobs at a time when PMETs, at 58 per cent, decisively dominate the local job market,” he noted.
“Temporary movement of natural persons is not unusual in trade agreements and also figure in the other FTAs Singapore signed, for instance, with Australia and New Zealand. None of them confer unfettered right of entry for foreign professionals.”
“Similarly, where intra-company transfers are involved – a foreign line manager who might seek to pull in a loyal underling, for instance – the scrutiny levels have tightened before an Employment Pass (EP) is granted.”
Velloor assured that Singapore’s Fair Consideration Framework (FCF) is also available for Singaporeans to address specific grievances on any discriminatory hiring practices.
However, a closer inspection of CECA reveals that intra-corporate transferees are permitted to stay and work in India and Singapore for an initial period of up to 2 years or less, but their stay can be extended for a total term not exceeding 8 years (‘Heng led team in concluding CECA with India opening up SG for Indian FTs to work in‘).
Furthermore in Article 9.3, it said, “Neither Party shall require labour market testing, economic needs testing or other procedures of similar effects as a condition for temporary entry in respect of natural persons upon whom the benefits of this Chapter are conferred.”
That is to say, economic needs testing like Singapore’s FCF which ensures fair hiring of Singaporeans cannot be applied to “intra-corporate transferees”. To top it all, Article 9.6 even allows the “intra-corporate transferees” to bring their spouses or dependants into Singapore to work. Hence, Indian companies can easily hire new staff in India and “transfer” them to Singapore.
Velloor: Tata employs 40 percent locals
With regard to the accusations of Indian companies like those in Changi Business Park hiring only Indian nationals and not Singaporeans, Velloor defended them saying that, for example, 40 percent of people hired by Tata Consultancy Services were locals.
“The better companies, whether they are the global banks or Indian conglomerates, realise they need to do their part (to hire locals) and indeed have moved to do so,” Velloor pointed out.
“India’s US$113 billion Tata group, for instance, has 20 operating companies and 28 entities in Singapore, employing a total of 3,300 staff. At its flagship Tata Consultancy Services, its software services arm, the percentage of local residents employed has doubled to nearly 40 per cent over the past five years.”
But of course, Velloor did not give any breakdown of how many of these local hires were actually Singaporeans, since PRs are typically classified as locals too.
Also, a look at the reviews of the company left by employees on employment platform Glassdoor shows then at a very low rating of only 2.9 stars out of five. In fact, several employees noted that there is little to no career progression within the company and that it unfairly favours expats, particularly those from India.
There is also the question of whether Singapore produces enough of its own to serve the economy’s expanding needs, Velloor said, especially in view of the multi-billion dollar foreign investment commitments EDB has drawn in.
“This issue of foreigners competing for PMET jobs will not go away. Indeed, the next periodic jobs report will surely bring it into focus again as retrenchments proceed. But if ever there was a time for cool minds and a long view, it is now,” he wrote.