Has Covid-19 broken Singapore's expat model beyond repair?
Even after the city-state's 'circuit breaker' has ended, the appeal of expat life in Singapore has lost much of its shine.
By Bloomberg News, October 8 2020
Something big is missing from Singapore's picturesque and impeccably maintained highway linking downtown with Changi Airport: traffic.
The collapse in international travel has hit the city-state especially hard. Borders are shut to tourists and much of Singapore Airlines' proud fleet is mothballed. The ability to get in and out of a nation that takes about 30 minutes to traverse has been a big draw for the more than one million expatriates who live here.
Non-Singaporeans make up more than half of senior management roles in financial services. A big part of that was the opportunity to work in a dynamic region and experience diverse cultures and nations for a few years.
In return, Singapore got talent, industrialization and unique ties to global networks, vital for a country without a hinterland or natural resources.
Singapore’s modus operandi has been to make itself a base camp for global capitalism and the people who make it tick. Lee Kuan Yew, the country’s first leader, laid out the welcome mat for multinational corporations: first for textiles, ship maintenance and petrochemicals, then for electronics, tourism and finance.
Changi Airport, top-notch public transport, a commitment to education, and political stability made the city an appealing place to live. Relatively low tax rates only sweetened the deal (except for Americans, who need to pay income tax no matter where they live).
Taking the shine off expat life
Now Lee’s vision is running into the wall of Covid-19. Singapore’s economy shrank a record 42.9% on an annualized basis in the second quarter from the previous three months, the deepest economic contraction since independence in 1965.
While data point to a bounce before year-end, the government projects gross domestic product to decline as much as 7% in 2020. This has sharply refocused public discourse. Opportunities for locals are the priority.
When companies do pare headcount, they are prevailed upon to keep Singaporeans at the core of their staffing.
Local press reports of legislative proceedings highlight references to a closely held list of firms on a watch list for their hiring practices. Banking and finance has fallen under heightened scrutiny.
The government, which lost seats to the opposition in July’s general election, has tightened rules around employment visas for foreigners by raising minimum salaries twice this year.
Tighter rules on employment visas
Figures released last week showed Singapore’s population fell slightly to 5.69 million in the year through June, the first drop since 2003. Work permit holders saw the largest decrease.
“We cannot sustain our openness if we do not provide enough opportunities for our own people,” Senior Minister Tharman Shanmugaratnam told the Singapore Summit on Sept. 14. “It is not socially or politically sustainable. No society can be blindly open.”
Singapore is slowly cranking back to life after a strict lockdown. Throngs pulse through malls and hawker centers in suburbs of central Singapore. Subway trains are often full.
A pilot scheme for international executives to travel in the region – under a strictly controlled itinerary and subject to Covid testing – is in the works. Children under six are no longer required to wear a mask.
But while the government will allow more people into their offices, work-from-home remains the default.
As long as that’s the case, and the airport remains effectively a no-go zone, the more folks realize they don’t actually need to be in Singapore to do their jobs. If teams across Asia can be managed by Zoom from the living room, then that living room could be anywhere.
Living la vida Zoom
This realization is crystallizing as the headlines splashed across Singapore’s major English-language newspaper, the Straits Times, openly debate the role foreigners play in the economy.
Far from feeling welcome, expats now spend a lot of time looking over their shoulders. Employers are quietly urging them to avoid anything that might attract attention.
That’s left many wondering whether uprooting their families has been worth it. You don’t have to come to Singapore for the privilege of getting laid off. Schools fret about families packing up. And those regional offices executives are sent here to run? They need to be able to get into them.
The caricature of the European sipping a gin and tonic under a shady tree with rent and school fees taken care of, pampered by maids, is woefully out of date.
Relatively few employers these days pick up the tab for housing and tuition. Relocation company staff say the glory days of the expat packages ended with the global financial crisis.
With economic warfare raging between China and the U.S., and fashionable talk about the world dividing into rival blocs, is an Asian experience still the resume booster it once was? A gig here now feels no more secure than one at home.
This article is published under license from Bloomberg Media: the original article can be viewed here
09 May 2020
Total posts 574
After having a good laugh from the “March 4 supersonic jet” ET headline (before it was corrected), I found another Bloomberg article republished here with similar misleading statements this time within the article.
Much of it involved how new measures to restrict expats from taking up positions in Singapore which may be done by the locals.
It is true that there is some political incentives to do just this given the recent July election results which reflected the voter concerns about the prevailing job situation now aggravated by the pandemic. Even then the measures are nothing compared to restrictions set by various developed countries including the US or Australia
For example in various sectors (especially government related services) there is a need to demonstrate no local worker with the right skill or experience suitable for the advertised job before overseas candidates can be seriously considered. And in terms of remuneration, it cannot be less than the equivalent pay for a local employee. Similar restrictions exist relating to limited work permit duration and abilities to move between employers.
Given the current woes with the pandemic, interstate or intrastate travel can be an issue depending on where you are living/working in Oz.
Hence frankly the bloomberg article seemed to paint a picture with certain tint of bias, not completely unexpected in this climate since it’s easier to feel good staying put in your home country by exploring the woes of others working overseas.
What the Bloomberg author fail to mention interestingly is that the new minimum salary threshold for foreign employment pass is $4500 per month, and $5000 per month if you are in the finance sector.
Clearly this change is not targeted at the high-end or even the middle echelon of management or professionals; most will balk at offers of $5000 per fortnight particular for those with a double incomed family considering in many cases the partner may not able to find a regular job nor get their own employment permit to work, and living in Singapore is not cheap.
Furthermore there is no rule about matching salaries as locals which meant the new measures with that kind of salary threshold actually targeted skilled labour from low income countries which local employers tend to hire at lower wages than less skilled locals at higher salaries (an economic lesson 101 in labour hiring trends for the last 4 decades really). The irony is that this is more likely to increase the salary of foreign blue-collared workers rather than increase local hires (which will still be about 20% more expensive)
And the remark about Zoom taking over? Sure, video conferencing may be a new norm in many part of the world, but being physically available in the same region with your Asian clientele, big business dinner and making deals while looking at each other eye to eye, is still going to be the deal maker for Asian business. If you are not in Singapore or other Asian cities for that kind of transaction, then you are not there for many businesses in east Asia
12 Aug 2019
Total posts 16
I think its just a bad time all round at the moment thanks to the virus.
I think ex-pats and their packages have always been a bit of sore point in Singapore, though I totally understand the reasoning behind them being there (was one myself). The experience they bring and the boost to the economy they provide as well as the regional presence provided to their respective firms.
Right now being an ex-pat, having family with you and suddenly finding yourself unemployed would be pretty uncomfortable even in your own country let anywhere else.
Having said that I do love the place and can't wait to get back, but as a tourist.
Etihad - Etihad Guest
19 Mar 2018
Total posts 68
What is it with you whites and your need for expat packages?
For a country that's so developed, so first world, and increasingly majority of students in the public school system being non-Singaporeans, it is absolutely ridiculous that all Singapore needs to scare you away, is to ask you to live like a local. There are an increasing number of Hollywood celebrities moving to Singapore, and doing the same. And more and more expats are actually making the switch, and transitioning really well.
We saw this occur in China as well. My relatives were forced to come back to Singapore, but have since returned, in different conditions. They do not stay in their small, fake American suburb house complete with cul de sac anymore. They have rented a place, and rent rates are a steal because of the semblance of a glut in the market. They no longer have a driver who takes them everywhere (but really just 5 places in the past 10 yrs). Now they lead lives as true Shanghai residents, not expats who lead Singapore lives, ignoring the world behind them. It's horrifying that I alone, in 10 days had seen more of Shanghai than they ever had, in 10 years.
Remember. Singapore will be one of the few countries on Earth to come out of COVID19. Them, as well as Japan, China and South Korea. That's it, for 10 years.
And although I'm not really supposed to say this, but Singapore once it reopens, estimated 2024, will be sold out for 10 years. Singapore is the least connected, least visited, global city nominee, and everyone wants to see the place that looks like the better part of humanity.
17 Jan 2018
Total posts 83
Mr Dyson selling his penthouse apartment after 12 months at $10m loss. That says a lot!
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