Survey of Singapore: Maintaining the balance - Government gets tough over foreign workers

The following article was published in the Financial Times on 13 Nov 1989.

Survey of Singapore (4): Maintaining the balance - Government gets tough over foreign workers
By ANDREW BAXTER
Financial Times, London, 13 November 1989

WITH an indigenous workforce of just 1.3m and almost static population growth, Singapore faces the inexorable need to continue importing foreign workers if it wishes to carry on growing.

But worries over the social costs of allowing in too many foreign workers - and particularly concern over disrupting the island's racial balance - are forcing a tougher attitude.

Over the past few months the seven-year-old levy employers are charged for hiring each foreign worker was raised in two stages from SDollars 175-200 to SDollars 250 a month. And, after revisions to a quota system introduced in 1985, no company can now recruit blue-collar foreign workers beyond 40 per cent of its workforce.

Employers cannot even forget about the restrictions when they get home - the levy on their Filipino maids is SDollars 200 a month.

For Singapore's government the aim is to balance economic needs against social costs, with a mechanism that regulates the demand for labour. Employers were told when the levy was first introduced that it would be adjusted according to economic circumstances, and, says Mr Tang Siu Shing, deputy secretary at the Ministry of Labour, failure to increase the levy and tighten the quota after the strong economic growth of 1988 'would have been giving the wrong signals. We want to nudge the economy to a higher plateau' - where the need for a continuous influx of blue-collar workers could be reduced.

The tougher attitude this year, and the tightness of the current situation in some sectors, was illustrated by the consequences of Singapore's threatened caning of illegal foreign workers. About 12,000 illegals, mainly from Thailand and India, surfaced and left the country; while most have now returned legally, delays in the interim to some big construction projects showed up in the half-year economic statistics. The construction industry is traditionally shunned by most Singaporeans.

At present there are 150,000 foreign workers in Singapore, a figure that has risen by 50 per cent after two years of buoyant economic growth.

Mr Tan says he is not sure the number can rise by too much more. Long term the ministry hopes to reduce the dependence on foreign workers, and channel them to four sectors critical to the economy - manufacturing, construction, hotels and domestic service. Foreign maids are seen as important because they enable better qualified women to work.

At present the shortage of blue collar and, especially, clerical workers in manufacturing is having knock-on effects elsewhere.

Financial services companies, including banks, are losing clerical workers to higher-paid jobs in manufacturing, and also face shortages in technology-based jobs such as computing. Recruitment at lower levels in the civil service is also getting harder.

A particular trouble spot is the hotel industry, where near-record room occupancy rates are exacerbating the problem. Most hotel groups are having to offer a range of inducements such as gifts for good performance, overseas trips and staff parties to attract and retain workers.

Yet, it is in this sector, particularly, where the Government wants greater efforts to improve productivity, even if, as Mr Lim Chin Beng, chairman of the Singapore Tourist Promotion Board, says, one cannot automate too much in a service industry. Officials point to their experiences in foreign hotels where fewer people are said to do the same amount of work.

In banking, where considerable productivity gains have already been made, further emphasis is likely to be placed on automation, and banks have also been bringing in clerical workers from Malaysia. In the civil service the response has been a policy of freezing manpower at 1986 levels of around 70,000, excluding workers in statutory boards.

Although the levy hits employers pockets, and the quota potentially places physical curbs on employers' plans, industry generally accepts the need for the system.

As Mr Tan Eng Joo, vice-president of the Singapore Chinese Chamber of Commerce and Industry, says, the labour shortage is 'one of the problems of success . . . We had started to tackle this problem way back'.

Bosses and agents of illegal workers may face compulsory caning

Bosses and agents of illegal workers may face compulsory caning
Straits Times, 5 August 1989

BOSSES who knowingly employ more than five illegal immigrants or overstayers will be given three strokes of the cane under a new Bill introduced in Parliament yesterday.

A Ministry of Home Affairs statement yesterday said this mandatory sentence will be meted out together with existing penalties which impose a compulsory jail sentence of at least six months and a fine of up to $6,000 for anyone hiring an illegal worker.

The new Immigration (Amendment No. 2) Bill, which was introduced by Minister

for Law and Home Affairs Professor S.Jayakumar, will also make caning mandatory for traffickers - the agents who bring in illegal immigrants. Caning is at present optional for this offence.

'Root causes of the problem'

On the hiring of illegal workers, the ministry statement said that currently

if an illegal immigrant is found with tools or is engaged in activities which can be inferred as work, the occupant of the premises would be presumed to be an employer unless he can prove otherwise.

It said "this presumption will not apply for the purpose of caning" which will put the burden of proof on the prosecution.

The statement described traffickers and employers who exploit illegal worker s on a large scale as "the root causes of the problem" and said they should be dealt with more severely.

The earlier decision to cane illegal immigrants, it noted, had effectively drawn out 10,000 offenders.

However, the problem will not go away, it said. As labour demand grows, it anticipated that some unscrupulous employers, in trying to dodge the monthly foreign worker levy of $250 per head, will be tempted to hire a small number of foreigners still prepared to work illegally.

Acknowledging that public opinion both in and outside Singapore had pointed out the unfairness of caning workers and not employers, it said the Government had therefore decided to extend mandatory caning to employers and traffickers.

A Home Affairs spokesman also issued a reminder that the final amnesty for foreign workers will expire on Tuesday.

He said even if the new Bill will not come into force till later, employers with illegal workers should ask them to surrender immediately and be repatriated before the amnesty deadline.

Thai Exodus Delays Construction Projects

The following article was published by Reuters on 14 April 1989.

THAI EXODUS DELAYS CONSTRUCTION PROJECTS
By Reginald Chua
Reuters News, 14 April 1989

SINGAPORE, April 14, Reuter - Singapore construction companies will be unable to complete some major projects on schedule because of the exodus of 10,000 Thai workers, industry sources said on Friday.

Changi Airport's showpiece 650-million dollar (325 million U.S.) Terminal Two is among the projects delayed by the labour shortage, they said.

The Thais -- mostly construction workers -- quit Singapore to escape a tough new immigration law which rules that illegal immigrants and those who overstay their visas can be caned and jailed.

The law came into force on April 1.

"We have been unable to replace the Thais because the local labour market is extremely tight," one source, who declined to be named, said.

"As long as the (shortage of labour) continues, I can see a delay of four to five months," said S.K. Jun, the Hyundai Engineering and Construction Company's project manager at the airport.

The Changi project was already behind schedule by about a month, he added. Other industry sources estimated the delay at between three to six months.

But a spokesman for Changi airport said the second terminal, designed to double the airport's present 10 million passenger a year capacity, would be ready on schedule next year.

The labour shortage caused by the sudden Thai exodus will also push wages up, the industry sources said.

Wage costs have risen by up to 33 per cent to about 40 dollars (20 U.S.) a day per worker in the first quarter due to the labour shortage and an increase in the levy employers must pay for each foreign worker, said Singapore Contractors Association Executive Director Chan Kok Weng.

"It's practically impossible to get labour now. There will be delay and disruption in existing projects. Even the small projects are affected," said Chan.

The sources said a central expressway passing through the business district and several other projects were also expected to be delayed.

Trade officials privately estimate 60,000 to 80,000 workers are needed to supplement Singapore's one-million-strong workforce.

The Construction Industry Development Board (CIDB) denied wage costs had been affected and said the government was speeding up approval for permits to ease the construction worker shortage.

"The situation should gradually improve as affected contractors come forward to apply for legal foreign workers," he said.