In 1998, Singapore’s impressive economic growth of the past years ended abruptly with the onslaught of the devastating Asian Financial Crisis, which started in Thailand in 1997 and quickly spread to South Korea and several other Asian countries. This was aggravated further by the subsequent dot.com bubble of the United States, which had adversely impacted both the US economy and that of other countries. The double blow pushed this tiny island republic into a recession followed by a slow growth period which lasted until 2004.
By an unwelcome coincidence, the current world financial turmoil, which originated in the US and has now spread worldwide, has, once again, hit Singapore severely. Its the worst since the Great Depression of 1929-1933. The Republic’s non oil exports have already dropped 34.8% year-on-year, the highest on record, unemployment has risen and retrenchments of staff in its key sectors are gathering pace. For this financial year, it is expected to register a negative growth rate of between 2.5 and 5%. History has come full circle.
The current economic crisis brings into public focus the large number of foreign employees in our midst, and the concern uppermost on the minds of a good cross section of Singaporeans is that many of them should be replaced by fellow citizens who have been retrenched and who are qualified to take over their jobs. This, in their view, would help ease the unemployment situation and reduce the impact of the recession. The Government is firmly against such an approach as this would vitiate its carefully nurtured policy of meritocracy in employment and will be detrimental to the nation’s long- term interest.
For more than a decade now, the Government and the business community have been acutely aware that, owing to Singapore’s small population and slender talent pool, it is inevitable that it will have to continue to attract the much needed foreign talent to work here in the overall interest of its expanding economy and diversified industrial base and as a way forward in an increasingly more competitive world. Consequently, both the Government and the private sector have adopted this employment policy in their respective spheres of operations as and when applicable. This has resulted in many well qualified foreign talent in various fields and levels of expertise coming here to work. Some have subsequently taken up permanent residency and even citizenship. For instance, two of the big three local banks and the national shipping line have foreign CEOs, and the huge government-linked medical and scientific research institutes have been successful in enticing world-renowned researchers to carry out their important works here. The Government has repeatedly assured its citizens that such a policy would in no way harm their job prospects and would ultimately create more jobs and enhance the national economy and competitiveness. The general consensus is that this farsighted strategy has definitely benefited Singapore and its people. Be that as it may, to those Singaporeans who have lost their jobs during a recession and are emotionally and financially affected by it, this reassurance may, understandably, be of cold comfort to them.
Steadfast in pursuing this employment policy, just recently, the government-funded Temasek Holdings, which has a massive international investment portfolio of S$185 billion, created quite a stir here and internationally by announcing that their current Singaporean CEO, Ms Ho Ching, will step down in October after close to seven years at the helm and will be succeeded by a 51 year-old American, Charles W Goodyear, who is the retired CEO of mining conglomerate BHP Billiton and who had built it up from a market capitalisation of US$12 billion to US 200 billion during his 9-year service with this company. Incidentally, in 2005, it also appointed a New Zealander to fill its No. 2 executive post. In making the announcement, Temasek made it abundantly clear that this change in CEO was in accordance with its succession planning and Mr Goodyear was the right choice. It pointed out that although it is Singapore’s sovereign wealth fund, it is not a government agency as it is run strictly on commercial line with full accountability to an independent board of directors. This announcement should go some way to dispel international investors’ perception that its function is to serve the national interests of Singapore Government.
Singapore is, of course, not alone in needing and wanting to attract foreign talent to its shores. China, the fast rising economic super power, which has a population of some 1.3 billion people, is also in the race for foreign talent despite its population size and vast pool of local talent. Even more economically developed countries like Britain, Canada and Australia are also trying their best to welcome foreign expertise to fill their particular needs. Above all, the United states, the world’s richest and most powerful economic and military power, would not have achieved its present preeminence but for the continuous infusion of foreign expertise and knowledge since attaining its nationhood more than two centuries ago.
So, the Singapore Government is truly carrying out what it preaches in upholding meritocracy in employment even at times of severe recession by not getting rid of the essential foreign employees in order to pacify its own displaced citizenry and public clamouring. This differs from the approaches of some countries around the world, both developed and less so, who would, in current circumstances, deem it in their national interests to retrench foreign employees first in order to safeguard the livelihood of their own citizens. While this may ease their short term problem, it would also hurt their longer term interests. As foreign talent is internationally mobile and sought after at all times, such a discriminatory employment practice would damage their international reputation and make it difficult for them to attract foreign talent to their lands in future. Will the more pragmatic and forward-thinking Singapore employment model be emulated by other countries as the preferred way forward? We shall wait and see as the global turmoil further unfolds itself.
By the way, seven years ago, I wrote a related article, “Foreign Talent – Lessons from Japan”, which was published by Singapore’s English language national daily, The Straits Times, and I would like to share it with the readers. It is posted immediately below this commentary.
Lam Pin Foo