Trade-offs from curbs on labour inflows

THE disclosure in the Singapore parliament last week that more than $2 billion of public projects will be shelved to ease the demand for construction workers speaks starkly of the big trade-off between managing foreign labour inflows and going for economic growth and development. Indeed, the long-running debate around Singapore's foreign worker policy has been one hot-button issue that is unlikely to go away anytime soon.

Prime Minister Lee Hsien Loong made clear that the deferment will not affect the more critical or urgent projects such as the building of new HDB flats or expansion of the train network. But "less urgent" projects that "can wait one or two years" are being set aside. These include extensions to Gardens by the Bay, the new Science Centre, and some new ministry and statutory board offices. Deferring the projects will save Singapore some 20,000 to 30,000 foreign workers, in line with the tightening of inflows in the last few years amid the big move to restructure the economy towards productivity-driven growth. Notably, foreign labour inflows have slowed, but have not been frozen, with the numbers having almost halved since 2011. Excluding the construction sector, the pace of labour inflow is now just a quarter of that in 2011. This update of Singapore's labour inflows may - or may not - spell assurance for Singaporeans who have griped and groused about the surge in the number of foreigners in the city-state over the past decade; many probably still find the trains and the neighbourhood market and mall as crowded as ever, and still see a seeming predominance of foreigners among frontline service staff here.

Yet the big-picture numbers also say: $2 billion worth of projects are being shelved, which spells some infrastructure and jobs foregone, and in a different scenario could amount to some critical pump-priming for a slow economy. So some projects "pay the price" - in terms of delayed milestones, deferred expansion - for the efforts to manage the population numbers and keep socio-economic peace, but Singapore is fortunate that its economy is healthy enough to be able to afford putting off some infrastructure-building. And that's just the public sector. The impact of the foreign-manpower tightening on the private sector is not as easily quantified but the anecdotal evidence is plain enough: Small and medium enterprises are particularly hit in the clampdown on foreign hiring as typically it's tougher for them to attract enough locals to meet the hiring quotas. Many indeed have had to downsize, if not close shop altogether, or ship out of Singapore - all of which spells job losses.