It is theoretically possible to work towards zero growth in Singapore's foreign manpower, but it is very hard to achieve it in practice without serious implications and trade-offs for the economy, Trade and Industry Minister Chan Chun Sing said yesterday.
Such a move could result in missed investments, and company closures and job losses for Singaporeans, he told the House in his response to Mr Liang Eng Hwa (Holland-Bukit Timah GRC).
Managing the growth of the foreign workforce is especially crucial as the size of the local labour force will peak in the next 10 years, said Mr Chan. This is due to the country's low birth rate and high labour force participation rate, which refers to the proportion of the population aged 15 and older who are either working or looking for work.
"If we maintain the current ratio of local (workers) to foreign (workers), when local peaks, foreign must peak, when local falls, foreign must fall - and the total must fall," he said. "If we maintain the total, a stable total as local peaks and falls, foreign must take up the slack, which means the ratio must change. But whether the ratio can change will depend on whether our society can accept the change."
The issue sparked an exchange between two government office holders and Workers' Party (WP) chief Pritam Singh, who suggested that a more extensive discussion on population policy be held outside the typical 90-minute question-and-answer (Q&A) time at a Parliament sitting.
Mr Chan noted that the WP had advocated zero growth in foreign manpower in the past.
Three tough scenarios
But such a policy could result in three difficult scenarios, Mr Chan said, elaborating on an example that he gave at last month's Parliament sitting.
First, a Singaporean could be earning $5,000 a month in his job, and a potential investment would create two jobs, one paying $7,000 and the other, $10,000.
With Singapore essentially at full employment and having a high labour force participation rate, if no new foreigners are allowed, there may be no spare capacity to take up the new jobs and the country would have to forgo the investment.
Second, a temporary surge in complementary foreigners could be allowed in to fill the new $7,000 and $10,000 jobs and Singaporeans doing the $5,000 jobs would move later to replace them. But if no new foreigners come in to replace the Singaporeans, their company would probably have to close and the rest of its Singaporean employees would be out of work, said Mr Chan.
The third scenario is the most ideal, where productivity improves and the company with $5,000 jobs can release two Singaporeans to be retrained to take on the higher-paying jobs without needing new foreign workers. "That is ideal but we also know that in the real world it is not easy to do, because different industries will have different opportunities for productivity growth... and the speed and scale at which we can retrain and upskill our workers are dependent on many factors. Whether we can do it in time to catch the new investment is always uncertain," said Mr Chan.
Manufacturing tends to have higher productivity growth than services, for instance, he noted.
Foreign workforce growth is thus one way to allow for the circulation of manpower to overcome these limitations, he said.
Immigrants and unrequited love
WP's Mr Singh said his party had called for zero foreign manpower growth during the debate on the Government's 2013 Population White Paper, but it was conditional on the resident workforce growing at an annual rate of 1 per cent. The WP also made the point in its manifesto for the 2015 General Election.
During the 2013 debate, Prime Minister Lee Hsien Loong said there would be a review of plans in the Population White Paper closer to 2020. Referring to it, Mr Singh asked if there would be a debate or motion to allow for a more extensive discussion on the population policy, given how significant the upcoming decade will be for Singapore's overall strategy.
He noted that parliamentary rules on Q&A time state that it should not be a pretext for a debate. "We've had episodes where Q&A time goes on to a pretty substantive issue and I think we perhaps should deal with it in another way."
Replying, Mr Chan said the Government would be happy to discuss such issues in more depth with MPs. "As leaders in our various capacity, we need to understand and have a shared understanding of these challenges, so that we can collectively carry the ground for the difficult decisions that we all have to take together for the next decade," he added.
He also said it is not a given that Singapore can achieve 1 per cent resident workforce growth or even the target economic growth trajectory. The current coronavirus outbreak originating in Wuhan, for instance, will have a significant impact on the economy.
Further, it is not a given that new immigrants will always choose to come to Singapore and supplement the citizen population. "I always jokingly say immigration is the story of unrequited love - those that we want may not want us, those that we don't want may all want to come," said the minister.
WP on why it asks for data
Senior Minister of State for Trade and Industry Chee Hong Tat also sought clarification from Mr Singh on whether he did support the need for a local-foreign workforce complement.
Mr Singh said the balance is something his party has to look at very carefully, which is why it often asks for government data.
"All the time we ask for data, it's not data for the sake of data. It's to understand the Government's perspective, because it's not a case of throwing whatever the Government is saying out of the window or turning up our noses at it.
"But certainly we have to look at it very carefully. And if the Government makes a compelling case, then there's no reason for us to be objectionable about it," he said.