News: The Straits Times -  5 February 2010


No U-turn in foreigner policy: SM Goh
By Jeremy Au Yong, Political Correspondent


MANAMA (BAHRAIN): The Government's recent moves to slow the influx of foreigners do not mark a 'sudden turnaround' in policy, said Senior Minister Goh Chok Tong yesterday.

Rather, it is simply a recognition that the country is nearing what it can accommodate. While foreign worker numbers may still rise, it will now grow more slowly.

Speaking to Singapore reporters in Bahrain at the end of a six-day visit to the Middle East, SM Goh explained that Singapore needed to be open to foreign workers in the past to fuel its rapid growth.

'If you look at the last decade, we wanted to grow fast. And there were opportunities to grow fast. Employers were crying for workers. We were trying to tighten the dependency on foreign workers, but the demand for goods and services from Singapore was high, so we liberalised. Then once we reach the limit, you've got to tighten,' he said.

The Government, he said, constantly monitors its policies and tweaks them where needed.

'Past models which have worked may not work in the future, so we've got to constantly monitor, adjust when necessary, sometimes even discard. But in our case it's modifying the model, not discarding the old model,' he said.

SM Goh also made it a point to stress that striking the right balance was just one aspect of the foreign-local issue. Permanent residents were another major part.

He said the Government was reviewing the PR scheme to try and make sure foreigners do not exploit it: 'If you want to come to Singapore, decide to be a PR, the logical conclusion must be Singapore citizenship. Do your fair share contributing as Singapore citizens.'

The balance between foreigners and locals in Singapore has been a key focus of the Government in recent years, and this week's Economic Strategies Committee (ESC) report also addresses the issue.

For instance, it suggests increasing productivity to reduce the dependence on foreign labour.

Speaking about the report, SM Goh noted that increasing productivity had been a focus as far back as 1978, when it prescribed high wages for locals as a way to boost productivity.

This time around - though the aim is largely the same - there is an additional weapon: the foreign worker levy.

'Unlike 1978 when we raised wages of our local population by a very high margin, this time you can calibrate the increase in prices through the foreign worker levy,' he said.

This was not a case of going out just to cut foreign worker numbers, but rather to 'price them more correctly'.

Said SM Goh: 'When you price the foreign levy at a more correct rate, then the market will decide what industries can still be in Singapore paying this price of levy.'

However, he said it would be a challenge doing this at the right pace, without putting off too many: 'If you overdo it, at too fast a pace, for example, and too many companies cannot cope with the higher cost of production, you may end up with a mild recession. If you are not careful at all, you can end up with a deep recession.'

Fortunately, he said, Singapore can draw from past lessons: 'We have the advantage of the 1978 experience in using prices to raise productivity and of course the advantage of knowing how far you can go and how fast you can go.'

To the Senior Minister, both 1978 and 2010 will mark 'turning points' in Singapore's economy. In fact, he described this year as a turning point for many countries, as they have to work out their next move after the financial crisis.

SM Goh concluded his visit to Oman and Bahrain yesterday, a trip which helped to deepen bilateral ties with both nations.

He said that as Senior Minister, he saw his role as trying to help Singapore expand its economic and political space.

Since stepping down as prime minister in 2004, SM Goh has been at the heart of Singapore's push into the Middle East. The country now has substantial business ties with many countries in the region, and has signed a free trade agreement with the six-nation grouping known as the Gulf Cooperation Council.

Mr Goh arrives back in Singapore today.

- end of ST article