The Straits Times
Published on Nov 17, 2012

Stay on course, Singapore


MEASURES to tighten the inflow of foreign workers have predictably raised the hackles of businessmen accustomed to cheap labour ("NMP's plea: Help SMEs adapt to change"; Tuesday).

Some warn of a stark choice between growth and prosperity on the one hand, and stagnation and decline on the other. Others threaten to decamp to locales with more lax labour laws.

The real debate is not about the desirability of economic growth but its sources and quality.

Experience in recent years has shown us too clearly that the massive intake of foreign labour to boost headline gross domestic product (GDP) is unsustainable.

This path will come up against physical constraints and, in time, foreign labour will no longer be cheap.

Such a policy also imposes unacceptable social costs (overcrowding, income inequality, social disaffection) and, in the long run, is detrimental to economic development; businesses addicted to cheap labour have no incentive to invest in productivity.

Living in an apartment ringed by no fewer than five construction sites, I am a witness to the gross inefficiencies of the construction sector, perhaps the single largest employer of low-wage foreign labour.

For example, do we really need two foreign workers to sweep up a tiny pile of leaves - one to wield a broom and the other to stand by a dustpan?

If we were concerned simply with headline GDP per se, then we should take frequent MRT breakdowns in our stride since they generate demand for better-qualified and higher-paid engineers, more maintenance workers, and additional layers of oversight and regulation, all of which create "work" and hence boost GDP numbers.

This is no different from countries experiencing a GDP bounce as they rebuild after a nuclear meltdown or storm devastation.

But this cannot be the kind of growth we desire.

I would much prefer a reliable public transport system with minimal train disruptions.

Farmers welcome the winter frost to rid their fields of weeds and pests.

In the same vein, necessary economic restructuring, though wrenching to some in the short term, ultimately benefits us all.

It stops inefficient, unproductive companies from soaking up scarce resources and raising costs for more nimble and innovative firms that can put those same resources to better use.

Businesses, whether foreign or local, large or small, are not confronted with a choice between high or low growth but a chance to shape up or ship out.

Francis Quek