Dec 12, 2013 | 12:02 GMT

5 mins read

Singapore's Immigration Dilemma

Singapore's Immigration Dilemma

Singapore has long been a destination for immigrants. Inflows of foreign laborers fueled economic growth and helped make its economy as strong as it is today, thanks in part to a liberal immigration policy. But Singaporean officials and residents alike may be reconsidering this policy. Citizens are becoming anxious about the growing number of migrant workers, and migrant workers feel aggrieved by what they consider unfair treatment and substandard social status.

Tensions came to the fore Dec. 8 during an episode of uncharacteristic violence. Some 400 immigrants, most of whom were Indian, Bangladeshi and Nepalese workers, rioted after an Indian national was hit and killed by a bus. They set fire to nearby vehicles and attacked police and emergency services workers. Violence subsided only after roughly 300 police officers were deployed to the area. Two days later, authorities charged 24 temporary workers from India with inciting riots.

If Singapore does not resolve its demographic issues, it may struggle to capitalize on the current economic competition over Asia — and to wean itself off its dependence on immigrant labor. 

After the riots, Singaporean websites were flush with demands for the government to better manage the immigrant situation. Authorities quickly responded by vowing strict punishment against the rioters and by creating a committee of inquiry.

But such measures may not address Singapore's larger demographic dynamic. For decades, the city-state has been an attractive place for immigrants. When it boasted a colonial economy, Singapore drew scores of Chinese, Indian and Malay immigrants, which brought the city-state's population from a few hundred thousand to nearly a million during the 1940s. After Singapore gained independence in the 1960s, the government was forced to enact stricter policies to curb immigration. In 1947, the island hosted 370,000 immigrants, but by the 1970s, it hosted only 200,000. However, Singapore reopened its doors in the 1980s to meet rising labor demand and to fuel newly expanded industrialization.

Singapore's Immigration Dilemma

Singapore's Ethnic Composition

For decades, liberalized immigration policies facilitated Singapore's rapid economic growth and accommodated many highly skilled, better-educated foreign workers. However, recently such policies have coincided with rising inflation and widening income inequality and have been criticized for raising property prices and making the job market more competitive. The public is also fearful that the policies would create instability in a place known for order and possibly undermine the island's national identity.

Over the past few years, three notable immigration trends have given rise to even more public discontent. First, the government's efforts to attract foreign laborers, particularly high-skilled ones, made Singapore's non-resident population increase at an unprecedented pace. By June 2013, there were 1.55 million nonresidents, equal to nearly 29 percent of the population. By comparison, nonresidents accounted for only 19 percent of population in 2000. During the same time period, foreign workers became a larger portion of Singapore's labor force, jumping from 28 percent in 2000 to 38 percent in 2013.

Singapore's Immigration Dilemma

Singapore's Residential Status

Second, unlike earlier immigration waves, the most recent influx brought more low-skilled laborers. According to official government estimates, currently some 870,000 foreign laborers — nearly 70 percent of the total foreign workforce — work low-skilled jobs. In 2006, that number was 580,000. Most low-skill immigrants hail from India, Southeast Asia and China and take low-paying jobs in the construction, service and manufacturing sectors. The majority of these low-skilled laborers, who enter the country with temporary work permits, have significantly lower incomes and fewer benefits than Singaporean workers and skilled workers — the government imposes strict requirements on their jobs and incomes.

Third, the city-state's ethnic composition has also changed. In 2000, ethnic Chinese comprised 76.8 percent of the population; currently, they comprise only 74.2 of the population. On the other hand, the percentage of Indian nationals has grown. In 2000, they comprised 7.9 percent of the population, but that figure has risen to 9.1 percent. The shift in ethnic composition is largely due to emigration and widening discrepancies between citizenship holders and immigrants. Although these changes are not dramatic, Singaporean society is very heterogeneous, so even minor changes could upset the island's ethnic balance.

Demographic and Political Challenges

According to an initiative unveiled in January 2013, the government will confer citizenship on 15,000-25,000 immigrants every year in addition to 30,000 residencies to accommodate more qualified workers and, it hopes, to assuage demographic concerns. Moreover, the government is planning to ease entry barriers for unskilled foreign workers so that they can take low-end and service jobs. Under the initiative, nonresidents will comprise 45 percent of the total population.

Singapore's Immigration Dilemma

Singaporean Demographics

Against this backdrop is Singapore's demographic challenge. The island is densely populated, and its fertility rates are low. In fact, like many developed nations Singapore has seen declining fertility rates for the past two decades — its current rate is 1.2. Singapore also has one of the highest life expectancies in the world, which, combined with an aging population, is constricting the labor pool. If current trends hold, the elderly will vastly outnumber the working-age population in 20 years, leaving the city-state unable to build and maintain a vibrant economy.

While the government has tried to mitigate these risks by defraying the costs of parenthood and by extending the retirement age, immigration reform continues to be Singapore's more viable solution for addressing long-term labor issues — much to the chagrin of the Singaporean public. In fact, discontent over immigration is critical to Singapore's slow move away from single-party authoritarian rule. Public sentiment was validated somewhat in the 2011 elections, when the People's Action Party recorded its worst performance since coming to power 50 years ago. In response, the ruling party tightened requirements for foreign workers and employers by raising the income threshold for the Personalized Employment Pass, a work visa tied to no specific employer, and by reducing the quota for work permit holders. Ultimately, concerns over labor shortages and frustration among investors trumped public sentiment, and authorities have since eased the regulations, albeit gradually. 

Once a fishing village and now one of the world's wealthiest polities, Singapore owes much of its economic success to liberal immigration policies. That many of these policies coincided with economic duress created concern among the public, forcing the government to maneuver accordingly. Though no one expects the ruling party to lose its hold on power, the government will probably be forced to appease voters further in the run-up to 2016 elections. Singapore will thus continue to try to balance the political consequences of high foreign populations with future economic vitality. 

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