In a previous video looking at Singapore's birth rate and its consequences,
I mentioned the idea of foreign talents. The island country has long sought to make
itself a destination for the best talents in the world. Its government says that it
is in a "global war for talent" so to attract the stars and high performers.
But the strategy has had substantial political repercussions. Especially online, the criticism
of hiring foreign talent migrants is common. Foreign talents receive certain privileges and
compete with natives for high paying jobs. Naturally, this has engendered resentment.
In this video we’re going to look at Singapore‘s high value global talent strategy.￼
Now before we begin, I am aware that this is a controversial topic in Singapore.
To be honest when I began my Singapore series on this channel, I had no idea it was.
I will attempt to be as neutral as possible on this topic,
and I ask my viewers to leave thoughtful, constructive comments. To simply yell at
each other and make false claims does not help anyone. That’s what shouting into a pillow is for.
Alright? Here we go.
Singapore has some of the lowest fertility rates in the world. These ultra-low fertility
rates have resulted in the rapid aging of the native Singaporean population. In 2011,
the Total Fertility Rate hit 1.2, then 1.1, and it has not really budged from that ever since.
This is despite some of the most aggressive pro-natal policies in East Asia. The government
has created tax incentives, founded matchmaking agencies, modified housing schemes, and of course,
blared out a plethora of baby-making messaging. They want to make it very clear that the nation
considers its people its most precious resource and procreation is a national duty.
The government is anxious about the potential of its working-age
population rapidly starting to decline over the next few decades.
They are also worried about the commensurate decline of its economy’s future competitiveness.
And that has led it to open the doors to high-value temporary and permanent immigrants.
This takes place within a larger context of Singapore shifting its economic national policy
from that of attracting foreign investment capital to attracting "foreign talents".
For the first several decades of its economic growth, Singapore marketed itself as a cheap,
business-friendly center for multinational companies to invest in.
But as the nation entered the 1990s, Singapore's cost of living rose,
making it much harder to deliver future growth the same way.
Looking to what was next, the government settled on transitioning to a knowledge-based economy.
Immigration would be part of that. Prime Minister Goh Chok Tong
said as such in the 1997 National Day rally:
> In the information age, human talent, not physical resources or financial capital,
is the key factor for economic competitiveness and success.
We must, therefore, welcome the infusion of knowledge which foreign talent will bring
In this worldview, you have a cadre of transnational elites - top ranked
and highly educated employees of multinational companies,
international finance, IT companies, and others. They live in big global cities like
Hong Kong or London - and can go wherever they want. They are Elite with a capital E.
Their unique skill is to be able to bring a combination of information,
ability and contacts from one locale to another. In other words, they transfer knowledge for
economic or innovation purposes - encouraging the flow of ideas throughout an industry and a place.
Their unique "tacit knowledge", a type of knowledge that researchers classify as not
being easily transferrable on a Zoom call or in an email, give them and their employers a
competitive advantage. Local Singaporean workers working alongside these elites
can pick up knowledge and experiences that they would not otherwise have had been able to.
One frequently cited success story from the past involved the national
migration of ethnic Chinese entrepreneurs and executives from Silicon Valley to Taiwan
in the 1980s and 90s. These people brought with them the contacts
and knowledge to strengthen the information technology industry in places like Hsinchu.
Many of the entrepreneurs and top management behind Taiwanese companies like TSMC
were not born there. They came to Taiwan at the behest of the Taiwanese
government, and the Taiwanese electronics, knowledge-based economy prospered as a result.
That is the lasting economic effect that Singapore wanted with this foreign talents strategy.
The government undertook this foreign talents strategy with diligence. On the visa side,
they created three types of employment visas - something called the Work Pass System.
It is a three tier system. The first tier is the Work Permit,
and it is for unskilled and semi-skilled workers.
The types who labor to build the many buildings in the cityscape. They are called "Guest workers".
The S-pass is for middle-class workers.
They need to have relevant experience or secondary education. They must command
a monthly salary of at least some amount, right now as of this recording $2,500 SGD.
And then there is the Employment Pass. This is for the elites - people like executives,
managers and trained professionals. They need to earn at least
$4,500 SGD a month. For those who make even more money, you got other tiers which I won't go into.
To find people willing to take these visas, the Singaporean government established the
Singapore Talent Recruitment Committee in 1998. Offices were set up in Perth, Boston, Sydney,
Los Angeles and more to promote Singapore as a location in which to live and work.
Privately owned recruiting firms also established offices in Singapore to recruit high performing
executives in the financial services, high tech, biology and manufacturing industries.
Those efforts were on the demand side. But no point in getting
people over to live in Singapore if they do not want to stay there.
Thus, the government sought to brand Singapore as the "Renaissance City" and
"A Great Place to Live, Work, and Play" - favored destinations for western expatriates.
Recent urban development plans have been implemented with this goal in mind.
Whenever someone visits Singapore and tells you that it is quite "clean",
that is exactly what they are shooting for.
Numerous restaurants, bars and coffee shops have sprouted along the Singapore River
focusing on serving foreigners, especially those from the west.
British-style pubs like Harry's Bar and Penny Black have become important expat watering holes.
You have certain neighborhoods that are distinctly more "western" like Holland Village - where the
merchants and the shops cater to Westerners. The look and feel of these enclaves is deliberate,
so to make its residents think they are back at home.
The push for immigration has substantially changed the composition of the Singaporean population.
Today a quarter of Singapore's 5-ish million people are non-residents, meaning that they
are neither citizens nor permanent residents. The foreign population has grown four-fold from
the 1970s to 1999, then doubled again to 1.6 million in the ten years afterwards.
Complaining about the government is practically a national past time.
I get it, people like to complain. And a real case can be made that foreigners
compete with native Singaporeans for good jobs, causing downward pressures on wages.
With all that being said, the vitriol and criticism directed
to foreigners and expatriates living in Singapore can get pretty sharp.
When I released my video about Chartered Semiconductor, I noticed that an awful
lot of the comments focused - not on the fierce battle that Chartered fought with TSMC or that the
government eventually managed to build a thriving semiconductor industry for the country - but on
the fact that the government hired a bunch of foreigners to run and work for Chartered.
Side note. Something that I had left out in that video but should have mentioned
was that tapping the expertise of foreigners had been and still is a generally accepted
practice in the semiconductor industry. As I mentioned earlier, TSMC started out the same way.
Even today, nearly half of their independent directors are American or
British - with chairman Mark Liu holding Taiwanese-American dual citizenship.
The foreigner immigration issue has become a divisive one.
And the population has made it clear that there will be electoral consequences
if it goes too far. The most infamous example came in 2013 when the government
released a paper called "A Sustainable Population for a Dynamic Singapore".
The paper for the most part is pretty mundane, but it did put forward one explosive proposal.
It suggested that Singapore would "take in between 15,000 and 25,000 new citizens every
year" and that the island's population would rise to almost 7 million by 2030.
People got nasty and a crowd of 5,000 gathered to protest. It was the largest
crowd since Independence. In a place where such gatherings are carefully controlled,
this was a big deal. Coming after a historic 2011 election
where the government won only 60.1% of the vote, it sent a pretty clear message.
(I know, I know, 60%, but the governing PAP has not gotten that low a share
ever since. And that counts the time they voted during a global pandemic.)
When asked what bothers them about the foreign talents issue, angry Singaporeans
say that their government has abandoned them and sold off their interests to foreigners.
Those foreigners come and live here but do not have their country's interests in heart.
Rather, they see Singapore as a mere stepping stone towards something better.
The government obviously had to respond. It did not entirely roll back its foreign
talents strategy, but rather made tweaks to it. It implemented stricter immigration criteria for
its foreign talents. This includes raising the required salary level for the Employment Pass,
granting fewer people Permanent Residency,
and capping the number of international students at Singapore's universities.
At the same time, the government instituted programs looking to
strengthen the "Singaporean Core" and head off any further nativist feelings.
That means teaching new citizens their country's history and values as well
as unique aspects of national identity like Singlish and Singaporean cuisine.
Companies were issued guidelines to maintain a "Singaporean core"
within their ranks so that natives can be first considered before
opening up a position to foreigners. And on the human capital side,
new programs to upskill workers in new skills so to make natives more employable by companies.
Governments have a tough job in balancing between economic growth and social stability.
Real problems can emerge from either having too much or too little immigration.
For now, the government seems to be navigating between the two. The economy despite the pandemic
remains fundamentally strong - Singaporean households enjoy incomes higher than that
in the Netherlands, Hong Kong, and Austria. And far, far ahead of Taiwan, by the way.
The discontent from transitioning to the knowledge-based, immigrant-driven economy
has not broken out from under the surface. If the government continues to respond to and calibrate
based on the people's feelings, I think that balance can continue.