MORE than 100,000 foreigners are set to enter Singapore's workforce this year, an increase fuelled by the record growth the Government is forecasting for the economy this year.
Prime Minister Lee Hsien Loong, in projecting the bigger inflow yesterday, said it was unavoidable as the labour market was bursting at the seams.
'If we don't allow the foreign workers in, you are going to have overheating,' he told Singapore reporters at the end of his six-day official visit to the United States.
However, he assured Singaporeans that the Government is managing the number, saying the foreign worker levies have been calibrated to moderate the inflow.
But Mr Lee added: 'Even with that, I'd imagine there will be more than 100,000 extra foreign workers this year.
'I cannot see it otherwise. But we have to accept that.'
Higher levy rates and a tiered system that makes it increasingly costly to employ many lower- and semi-skilled foreign workers were announced in February.
But they came into effect only at the start of this month to give employers time to adjust and to invest in improving productivity, which is Singapore's new catalyst for growth.
The projected inflow is, however, a slowdown when compared to the surge in 2007 (144,500) and 2008 (157,000), said economists and employers interviewed.
In fact, the pool shrank by 4,200 in the downturn last year, reducing the total foreign population to about one million.
Said economist Leong Wai Ho, of Barclays Capital investment bank, who did not think the new inflow is excessive: 'The addition of 100,000 probably reflects more discriminate and careful use of foreign workers, now that the levies have gone up.'
Mr Lee's comments coincided with the Ministry of Trade and Industry's announcement yesterday of first-half growth heading for a new peak.
It led the ministry to raise its growth forecast for Singapore this year, saying it will be 13 to 15 per cent instead of its earlier projection of 7 to 9 per cent.
The need for more foreign workers this year was implied by PM Lee at the May Day Rally, when he said that given the projected strong growth, 'a higher inflow of foreign workers is unavoidable'.
Economists like Mr Leong see many of them flowing into the hotel plus food and beverage sectors, as well as high-end industries such as electronics and marine, where demand for semi-skilled S-pass holders is high.
The hospitality sector is particularly hungry for workers, following the opening of the two integrated resorts and a surge in the number of tourists landing on Singapore shores.
Said Hotel Rendezvous general manager Kellvin Ong: 'Once we hit the quota, it's very hard to hire more. The Government has to make it more competitive for us to hire foreign workers when we need to.'
About 10 per cent of its 140 employees are foreigners, and like others in the hospitality industry, it struggles to get locals to work in lower-skilled jobs such as waiters and chambermaids.
But most employers cheered PM Lee's comments, saying it would ease the pressure, especially for small and medium-sized enterprises in sectors struggling to attract Singaporeans.
On top of that, they face a rising wage bill, with the rise in foreign worker levies and the impending one percentage point increase in employers' contribution rate to the Central Provident Fund.
Said Mr Teo Siong Seng, president of the Singapore Chinese Chamber of Commerce and Industry, which has some 4,000 members: 'We support the government policies to cut reliance on foreign workers and push for productivity, but in some sectors, it will take time to see results.
'A more controlled inflow of foreign workers will benefit the country.'
In February, the Government, in making a commitment to reduce the country's reliance on foreign workers, said it would limit the numbers to one-third of the total workforce, which stands at around three million.
Mr Teo, a Nominated Member of Parliament, cautioned his fellow employers to view this year's inflow as a 'temporary relief measure' and not to let up on their productivity efforts.
The need to focus on a productivity-driven economy to achieve sustainable growth for the next 10 years was also stressed by PM Lee and Manpower Minister Gan Kim Yong.
Said Mr Gan: 'In the short term, we would need to tap on more foreign workers to support economic growth.'
But it has to be done 'while maintaining the longer-term goal of reducing over-reliance on foreign workers through investments in productivity', he added.
Labour MP Josephine Teo said the huge foreign inflow was not a surprise to unionists, following PM Lee's remarks in his May Day Rally speech.
'In the short term, we may have to accept opening our doors a little bit more,' she said, adding that workers in companies facing a shortage may find the increase in foreign workers 'a welcome relief'.
In the meantime, the labour movement will redouble its efforts to improve productivity, she added.
Source: Straits Times, 15 Jul 2010