Taiwan's brain drain and immigration policies under fire

Tharman's comments re-ignite island's foreign talent debate

By Lee Seok Hwai, The Straits Times, 10 Apr 2012

TAIPEI: A longstanding debate on Taiwan's immigration policies has resurfaced following a speech by Singapore's Deputy Prime Minister Tharman Shanmugaratnam in which he cited Taiwan as a cautionary tale to highlight the importance of attracting foreign talent.

Taking up the issue, Taiwanese business leaders, academics and journalists have blamed bureaucratic red tape for the island's inability to attract foreign talent. They called for changes to redress this as well as stem the outflow of local talent.

Mr Tharman had warned at a university forum in Singapore last Thursday that one of the factors behind what he called the 'Taiwan story' was that Taiwan had been keeping foreign talent at bay even as its best and brightest were leaving for better prospects in other countries.

His comments immediately created ripples here. Mr Stan Shih, the founder of computer giant Acer, and hotelier Stanley Yen reacted by publicly calling for a more relaxed immigration policy.

Mr Shih told reporters on the sidelines of a digital technology show last Friday that Taiwan's development would be restricted if it lacked foreign talent.

'Foreign talent could make up only 1 per cent of the population of Taiwan, but the value they create could be 100, even 1,000 times,' he said.

He urged the authorities to adopt a 'new framework' to tackle the problem.

Only about 3 per cent of the some 810,000 foreigners on the island of 23 million people are white-collar workers, many of them Japanese executives and English teachers from the United States and Britain.

The island used to enjoy heady average annual growth of more than 9 per cent between the 1950s and 1980s, low unemployment and steadily rising wages.

However, wages have not budged for the past decade even as inflation chips away at purchasing power. Per capita income in Taiwan at US$21,592 (S$27,250) trails those of Singapore (US$50,714), South Korea (US$23,749) and Hong Kong (US$34,393). From being the kingpin of the four Asian Tigers, Taiwan's economy is now bottom of the pack.

In a commentary published in the mass-circulation United Daily News, Mr Yen said that 'even Singapore has pinpointed our problem, yet we remain oblivious to it, that is our biggest problem'.

Mr Yen is only partially right. Observers have said that the problem has not gone unnoticed by the government. What has been lacking is a solution, they say.

Dr Yang Chia-yan, a research director at the Taiwan Institute of Economic Research, said Taiwan remains 'institutionally' unfriendly to foreigners. Numerous rules, from educational and salary requirements to lengthy paperwork, deter employers from hiring foreigners.

Expatriate spouses find it extremely hard to find jobs. There are also few choices of international schools for children of expatriates.

'Academics have long agreed that the government should relax the immigration policy to attract more knowledge-based white-collar workers,' said Dr Yang.

On Sunday, the English daily newspaper Taipei Times, noting that Mr Tharman's criticism was not new, asked: 'Will Taiwan ignore this wake-up call, just like it has so many others?'

Premier Sean Chen had said last Friday in Taiwan's Parliament that Mr Tharman was an internationally renowned financial expert and that his comments would help spur a government review of the immigration policy.

He added: 'We are aware that Taiwan has a brain drain problem... it's worth reflecting on the Singapore Deputy Prime Minister's comments. I will ask the relevant departments to take note of them in our efforts to train, retain and groom talent.'

Barriers to attracting and keeping foreign talent

TAIWAN'S restrictions on hiring and retaining foreign talent (white-collar workers):

Companies which wish to hire foreigners must have an annual turnover of at least NT$10 million (S$427,000)

Job applicants must have a relevant degree plus two years of relevant work experience, or a master's degree

Monthly salary should be at least NT$47,971 (Note: Average salary in Taiwan is about NT$40,000)

Only those who have lived in Taiwan for five consecutive years, during which at least 183 days are spent in Taiwan each year, may apply for permanent residency. After getting the residency, foreigners have to live in Taiwan at least 183 days per year to maintain its validity.

Source: Council of Labour Affairs, Taiwan

Acer founder makes case for foreign talent
The China Post/Asia News Network, 8 Apr 2012

TAIWAN - Acer Group founder Stan Shih recently called for the government to introduce foreign talent with global views, saying their help could upgrade Taiwan industries and generate huge business value of up to 1,000 times their employment costs.

Shih issued the call in response to a comment by Singapore Deputy Prime Minister Tharman Shanmugaratnam, who recently singled out Taiwan as a country facing serious brain drain and also imposing restrictions on foreign nationals seeking jobs.

The government has been too conservative toward introducing foreign talent, and without assistance from overseas Taiwan will see only limited development, Shih said, adding that the Council of Labor Affairs should seek new strategies to facilitate the entry of more international talents with global views.

Taiwan's competitiveness lies in the strength of its talent, and although foreigners in Taiwan account for less than 1 per cent of the working population, they can create huge business values for local industries, which may be 100 or even 1,000 times the cost of employing them, according to Shih.

Accordingly, if Taiwan chooses to abandon its "1 per cent" foreign talents, it could lose all of the benefits that come with it. To counter, the Council of Labor Affairs should inject new concepts into its strategy for attracting and keeping international talent of various fields.

Meanwhile, Premier Sean Chen also said that the government has already sensed Taiwan's brain drain crisis, as cited by Shanmugaratnam, and will come out with effective countermeasures.

In the same regard, Education Minister Chiang Wei-ning said his ministry will devise Taiwan's first-ever white paper on talent cultivation, although Taiwan still enjoys great manpower resources.

Chiang said that it requires concerted efforts from different ministries under the Cabinet to cultivate talents needed in the next 10 to 20 years.

He said not only has the drain of young Taiwanese professors to the US been on the decline, but many such professors have returned to Taiwan, making it an imperative task to cultivate high-caliber manpower.

A top official with the Cabinet-level Council for Economic Planning and Development (CEPD) also lamented that although the CEPD and the Ministry of Economic Affairs have repeatedly asked the Council of Labor Affairs (CLA) to ease restrictions on the entry of foreign professionals to work in Taiwan, the CLA has always used some of the same reasons to turn down the request, therefore making local enterprises fail to find excellent talent both at home and abroad.

In addition, Chen Wu-hsiung, chairman of the Chinese National Federation of Industries, said the government has set too many restrictions on the introduction of foreign talents, a serious problem that should be tackled as soon as possible.

Chen urged the government to make the labour market subject to its own, "market mechanism" instead of enforcing a spate of restrictions, so as to boost Taiwan's international competitiveness. Chen also noted that the basic monthly pay for domestic workers should be detached from that for foreign workers, so that local enterprises can more flexibly adjust the deployment of their workforce in line with their production needs.

Time to tackle the brain drain
Taipei Times, 8 Apr 2012

Last week, Singaporean Deputy Prime Minister Tharman Shanmugaratnam’s remark that Taiwan had suffered a brain drain sparked concerns that the nation could lose out to competitors even more if urgent countermeasures are not taken.

Were politicians’ and business leaders’ concerns just a knee-jerk response to criticism from abroad? Will Taiwan ignore this wake-up call, just like it has so many others?

In a speech given on Thursday in Singapore, Shanmugaratnam said Taiwan faced difficulties in keeping domestic talent and attracting foreign professionals. He cited Taiwan’s closed-door policy on foreigners as the main factor behind the country’s stagnating wages.

“If you don’t provide opportunities in Singapore for enterprises to be global-class and highly competitive, and for Singaporeans to work in the best teams, we will lose more of our Singaporeans, and we will be a Taiwan story,” the Straits Times quoted him as saying.

The criticism is nothing new. In recent years, there has been an increase in complaints from domestic educational and research institutes that they are unable to hire qualified professionals from abroad because they are barred from paying as much as their counterparts in China, Hong Kong, South Korea and Singapore, while the US and European chambers of commerce have been pushing for years for the government to change its rules for foreigners doing white-collar jobs in Taiwan.

On the heels of growing concerns that Taiwan suffers from a costly talent shortage — even though the number of graduates from local colleges, universities and graduate schools has increased sharply over the years and the nation has become an exporter of skilled professionals — Academia Sinica President Wong Chi-huey (翁啟惠) and his colleagues warned in an open letter to the government in August last year that Taiwan could face a serious brain drain over the next decade. The letter urged the government to get rid of outdated laws and red tape, but nothing has been done thus far to improve the situation.

There are many causes for Taiwan’s brain drain. Some people have left the country for higher salaries abroad, some have migrated overseas in search of a better political and social environment, while others have been lured away by cultural affinity to other countries. While the Constitution protects people’s rights and freedom to move around, it is the loss through migration of Taiwanese white-collar talent, rather than any influx of foreign white-collar workers, that poses the gravest concern for Taiwan’s economic competitiveness.

When Hon Hai Precision Industry Co chairman Terry Gou (郭台銘) said last week he planned to raise wages for the firm’s Taiwanese employees in July as people here are faced with a rising cost of living, there was not just the hope that Hon Hai’s move would prompt other businesses to follow suit, but that this would also remind them of their most precious asset — their employees. On the other hand, when Council of Labor Affairs (CLA) Deputy Minister Pan Shih-wei (潘世偉) on Friday blamed Taiwan’s comparatively low wages for the country’s failure to retain local talent and attract foreign professionals, Acer Inc founder Stan Shih (施振榮) said that it was time for the CLA to change its mindset on employment policy.

If local businesses are still unwilling to pay higher salaries for either domestic or foreign professionals and if the government does not take action to improve the regulatory system to ensure a steady influx of such individuals, there is no chance Taiwan’s economy will thrive in the decades ahead.

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