Singapore seeks ‘quality rather than quantity’: Chan Chun Sing on changes to foreign work pass policy

SINGAPORE: Singapore is putting focus on “quality, rather than quantity” with the latest increases to the qualifying salaries of foreigners on Employment Passes and S Passes, said Trade and Industry Minister Chan Chun Sing on Saturday (Aug 29).

Earlier this week, the Ministry of Manpower announced that the minimum salaries for new Employment Pass candidates will be raised by S$600 to S$4,500 from September. Holders of the S Passes will have to meet a S$2,500 threshold, instead of S$2,400, from October.

A higher salary requirement for Employment Pass holders in the financial services sector was also introduced.

READ: Minimum qualifying salary to rise by S$600 for Employment Passes and S$100 for S Passes, higher requirement for financial services

In an interview with CNA on Saturday, Mr Chan said: “The way to interpret the recent changes is this, we are making a move towards quality, rather than quantity … and this is what we have done progressively over the years.

“Whenever the economic conditions require it, we will progressively adjust the qualifying salaries for the foreign employees coming into Singapore because in doing this, we raise the headroom for Singaporeans to compete while at the same time, it doesn’t affect the really top tier of talent that we want to attract from the world.”

He added: “But for those jobs that are somewhere in the middle where fellow Singaporeans are more than able to do so, then there’s less need for us to attract so many (foreigners) into Singapore.”

Mr Chan acknowledged that the changes will hit businesses in the area of cost and the ability to hire foreigners.

It may also impact how Singapore is being perceived in terms of its openness to businesses and talent from the world – to which the minister stressed that Singapore is “not closing (its) doors". "We will never disconnect ourselves from the world," he added.

However, the country has “to strike a fine balance", he said. 

READ: Adjustments to Employment Pass and S Pass criteria 'timely' to help businesses retain local employment: Josephine Teo

The minister also touched on the need for Singapore to diversify its economy, to avoid being vulnerable to external shocks and be able to provide its current and future generations with diverse opportunities.

Given how Singapore is a small country with a finite labour pool, it will “need some portion of foreign complement in the different sectors” that it seeks to grow and diversify into, he added.

Noting observations of a “concentration of certain nationalities” in sectors such as finance and information and communication technology (ICT), he said this challenge is not unique to Singapore given the global competition for talent in these high-growth areas.

“This is a global challenge and that is ultimately because the whole world is not producing enough people in some of these fields. It is a very uneven production of such people and everybody wants the best,” said Mr Chan.

The Government’s goal is for Singaporeans to secure jobs in these fast-growing industries, and it is doing so by investing in these sectors and building up its own capabilities. This was also a strategy that the country adopted in the past when it was seeking to build up its petrochemical and manufacturing sectors, said Mr Chan.

“While we accept that we don't yet have enough … talent in these (high-growth) sectors, we will do what we can to ramp up the production and training of our people as fast as we can,” said Mr Chan, noting that this includes the retraining of middle-aged workers to help them transition into burgeoning industries.  

“It will take us some time to ramp up the production and training of our people, but we will get there,” he said.

“FULLY” UNDERSTAND ANXIETY ABOUT JOB COMPETITION

With Singapore bracing for its worst recession amid the COVID-19 pandemic, the Government “fully” understands the anxiety over competition for jobs with foreigners.

“So the real challenge is not the number of foreigners in Singapore per se; the real challenge is how we help Singaporeans succeed in a hyper-competitive world,” said Mr Chan.

READ: Job competition from work pass holders could become a 'divisive issue', will be addressed, says President Halimah

The Government will “go all out” to do so, he added, by pulling in investments to create good jobs for Singaporeans and ensuring a “fair-level playing field”.

On the latter, he stressed that Singapore has “zero tolerance for discrimination of any kind”, adding that companies that have done so will be investigated and penalised in the form of having their foreign work passes curtailed.

Among other plans, policymakers are also enhancing job matching efforts with training and apprenticeship opportunities, especially for middle-aged workers.

“We want to assure all Singaporeans, regardless of whether you still have a job or whether you are out of a job, we are going to go all out to take care of Singaporeans through this difficult moment.” 

“MISPERCEPTIONS” ABOUT CECA

Mr Chan also said he wants to “clear the air” about misperceptions surrounding the Comprehensive Economic Cooporation Agreement (CECA) – a free trade agreement between Singapore and India that entered into force in 2005.

Earlier this week, the Ministry of Trade and Industry (MTI) issued a statement noting that the pact does not automatically grant Indian nationals access to Singapore citizenship, permanent residence or employment.

It is also not true that CECA requires Singapore authorities to automatically grant Employment Passes to professionals, managers and executives from India who want to work here, the statement added.

READ: CECA does not give Indian nationals automatic access to citizenship, PR status, employment: MTI 

Mr Chan had also made similar comments in November last year, when he noted that falsehoods relating to the bilateral agreement and other free trade agreements (FTAs) have surfaced following an incident where a man was filmed lashing out at a security guard at his condominium.

Reiterating these points, the minister told CNA on Saturday that all foreign nationals applying for Employment Passes must meet the prevailing criteria. Existing rules that stipulate hiring be “done in a meritocratic and non-discriminatory way” also must be adhered to by employers. 

Indian nationals seeking to enter Singapore under CECA as “intra-corporate transferees”, or employees transferred from a company’s overseas unit to Singapore, will also have to meet these rules, he added.

Mr Chan noted that clauses on intra-company transferees is “not unique” to Singapore’s trade agreements, and that it is “consistent” with the World Trade Organization’s General Agreement on Trade in Services.

“The practice of enabling the intra-corporate transferees is meant to help companies to expand overseas,” he elaborated. “It is the same for foreign companies seeking to set up their investment here. It is also the same for Singaporean companies going overseas.”

Mr Chan went on to say that Singapore’s trade and investments with India have grown under CECA. 

Apart from protecting Singapore companies that invest in India, it has also helped to attract foreign investors who invest in India and employ Singaporeans to manage their investments in Singapore.

“In 2018, we have more than 650 companies in Singapore that have invested in India. At home, these companies employ more than 100,000 Singaporeans and PRs (permanent residents),” said the minister.

Asked if there was a timeline for a review of CECA, Mr Chan said all FTAs include a clause for regular reviews. But recent developments in the global environment mean that Singapore must be “very careful” when it enters into any of these negotiations.

For instance, the COVID-19 pandemic has accelerated the shift in global production and supply chains.

A rise in protectionist sentiment in parts of the world will also mean that “many countries are going into such reviews from a defensive position”, which will make “any review very difficult”, said the minister.

More broadly on the 23 FTAs that Singapore has, Mr Chan said this “extensive network” has made Singapore an attractive place for investments.

“Without this network of FTAs, and since we have no natural competitive advantage in terms of resources, manpower or land, it gives us something that we can compete with others (and) to create those jobs, those good jobs that we want for fellow Singaporeans,” he said.