SINGAPORE – Health Minister Ong Ye Kung and Manpower Minister Tan See Leng delivered ministerial statements in Parliament on Singapore’s free trade agreements (FTAs), such as the Singapore-India Comprehensive Economic Cooperation Agreement (Ceca), on Tuesday (July 6).
Here are the highlights:
1. FTAs, Ceca made ‘political scapegoats’
The Progress Singapore Party (PSP) has repeatedly made false statements that the Singapore-India Comprehensive Economic Cooperation Agreement (Ceca) gives Indian professionals “a free hand” to come and work in Singapore, said Mr Ong.
In a social media post in June, PSP Non-Constituency MP Leong Mun Wai had also claimed that foreign PMETs (professionals, managers, executives and technicians) and FTAs have affected the jobs and livelihoods of Singaporeans, the minister said on Tuesday.
“These statements are false. They have been repeated for too long,” he said, adding that FTAs and Ceca have been made “political scapegoats” to discredit the Government’s policies.
Recounting how xenophobia and racism against Indians have been stoked over the past few months, Mr Ong noted that the PSP has claimed for months that FTAs and Ceca have led to the unfettered inflow of Indian professionals, which then displaces Singaporeans from their jobs and brings about all kinds of social ills.
“This is a seductively simplistic argument that workers facing challenges at their workplaces can identify with, and has stirred up a lot of emotions,” said Mr Ong, noting that Ceca-themed websites have sprouted, filled with “disturbing xenophobic views” about Indian immigrants.
2. Ceca does not allow unconditional entry of Indian professionals
Singapore’s ability to regulate immigration and foreign manpower is not affected by Ceca, said Mr Ong, who stressed that the Government retains full rights to decide who can enter the country to live, work or become permanent residents or citizens.
“Nothing in the agreement implies Singapore must unconditionally let in professionals, managers, and executives (PMEs) from India. Contrary to the Progress Singapore Party’s claim, our ability to impose requirements for immigration and work pass has never been in question in Ceca or any other free trade agreement that we have signed,” he said.
Pointing to Chapter 9 of Ceca on the movement of natural persons, Mr Ong cited two clauses, including clause 9.1.2 that states: “This Chapter shall not apply to measures pertaining to citizenship, permanent residence, or employment on a permanent basis.”
This is an immigration carve-out that means Indians do not have free rein to come to live and work in Singapore.
3. Globalisation critical to Singapore’s survival
Singapore, Mr Ong said, is a country that is too small to live on its own, and which needs to tap global markets to earn a living and be self-reliant. While it has no natural resources, Singapore does have its geographical location, which is its “one precious natural endowment”, he added.
He said: “It is a lasting advantage, but one which requires us to work very hard to realise and sustain. If we succeed, it helps compensate for our lack of size.”
Singapore has grown into a successful seaport and aviation node, which has resulted in the creation of many jobs, said Mr Ong. He also highlighted how good international connections have allowed the country to build up its manufacturing and service sectors.
None of these achievements would have happened without a clear strategy that was carried out properly, said Mr Ong. “It was a long and painstaking process, part of the story of our island-nation. Clean government, rule of law and safety, where you can walk on the streets at any time of the day. With political stability, good infrastructure, high standards of education, openness to the world.”
4. FTAs key to Singapore’s existence
Singapore’s network of 26 FTAs is not just a major selling point for the Government to persuade investors to come and do business, but is also fundamentally important to the country because it needs the world in order to “earn a living”, said Mr Ong.
FTAs are especially important to small and medium-sized enterprises because they free these businesses from being constrained by Singapore’s small domestic market and give them access to overseas customers.
Any attack on FTAs undermines the fundamentals of Singapore’s existence, all the sectors the pacts support and the “hundreds of thousands of Singaporean jobs” created in these sectors, said Mr Ong.
He said: “If we accept the basic reality that Singapore needs the world to earn a living, then we would realise the fundamental importance of all our FTAs.”
5. Competition between local and foreign PMEs not zero-sum game
The number of Employment Pass (EP) holders in Singapore increased from 65,000 in 2005 to 177,000 in 2020. This translates to an annual growth rate of just under 7 per cent, and an increase of 112,000. In comparison, the number of local PMEs grew by more than 380,000 in the same period.
Mr Ong said that the numbers underline an important point – that competition between foreign and local PMEs is not a zero-sum game.
“In fact, the converse is often true. By combining and complementing local and foreign expertise, we can attract more investments and create many more good job and career choices for Singaporeans. There is a trade-off at play here: many jobs, strong competition; or few jobs, no competition. We need to find the right balance where there are more jobs, some competition,” he added.
6. Jobs created for local PMEs outstrip rise in EPs in finance, infocomm
From 2005 to last year, the finance and infocomm sectors accounted for 40 per cent of the increase in EPs handed out to foreign professionals. But these two sectors saw even stronger job creation for local PMEs, said Dr Tan.
In infocomm, the number of EPs increased by around 25,000, while the number of jobs created for local PMEs was around 35,000. In finance, the corresponding figures were 20,000 and 85,000.
Dr Tan gave these numbers in his speech, where he rebutted Mr Leong and fellow PSP Non-Constituency MP Hazel Poa, who had raised questions and issues on whether the growth in EP holders has come at the expense of local PMEs.
7. On foreigners and CPF contributions
Dr Tan addressed points previously made by Mr Leong on employers of foreign EP holders not being required to make Central Provident Fund (CPF) contributions.
“As foreign PMEs… are not working in Singapore on a permanent basis, I don’t think we should be responsible for their retirement adequacy or home ownership needs. Hence I don’t think it makes sense for us to extend our CPF benefits and coverage to them,” said Dr Tan.
“Instead, when reviewing qualifying salary to maintain a level playing field, we take into account CPF contributions as part of the cost to employers.”
8. Proportion of Indian EP holders doubled, but not a result of more favourable treatment due to Ceca
The proportion of EP holders from India almost doubled to 25 per cent last year from 14 per cent in 2005, but this had been driven by the rapid growth of Singapore’s digital economy, rather than the result of more favourable treatment for Indian EP holders due to Ceca.
Dr Tan said: “As every sector seeks to be digitally enabled, their need for tech talent has grown significantly.”
Another major source of tech talent is China, he said, but with the country producing many unicorns – start-ups worth at least US$1 billion (S$1.34 billion) – and having its own demand, many Chinese professionals are staying put.
He noted that India, whose talent continues to look outwards, is currently the largest country of origin for international migrants. Last year, it accounted for 18 million international migrants, up by 10 million from 2000.