Paying the price of closing S'pore's gates

Time to ease up on anti-immigration, anti-growth rhetoric as reality starts to bite
By Warren Fernandez, Editor, The Sunday Times, 8 Feb 2015

I am done, declared Roland, putting his fork down with a thud.

Thinking this signalled a premature end to our fondue dinner, I reached for my napkin and prepared to rise from the table.

"I am done with this country," said my host, beckoning me to stay and have more cheese and wine. "I am moving my business. I can deal with new laws, new taxes, new politicians or bureaucrats, but if I can't get the people to help me do the work, then it just does not make sense."

He planned to relocate his small family media and events business, after repeated applications for work permits for staff had been rejected by the authorities.

This, he surmised, was in response to popular pressure and rising anti-immigrant sentiments in the country. The Singaporeans at the table looked on knowingly; it all sounded rather familiar.

Except this was a conversation at a dinner in Davos, in the middle of the Swiss Alps. It caught me by surprise, as I had always imagined Switzerland to be the model of economic efficiency and rationality.

After all, last November, nearly three in four of those who voted in a referendum had rejected a proposal to cut immigration drastically from about 80,000 to 16,000 people a year.

The motion's backers had argued that curbing population growth would ease pressure on the country's resources and protect the environment. Opponents, including most major political parties, warned that it would be disastrous for the Swiss economy.

The resounding 74 per cent "no" vote was hailed by commentators as a mark of the maturity of the Swiss electorate, which recognised the need to keep the country open to workers from around the world if it was to continue to thrive.

This, despite the fact that around a quarter of its 8.2 million people are foreigners, mostly from neighbouring countries. While unemployment is low and living standards are high, many Swiss worry about overcrowding and environmental degradation.

"Thank goodness for that vote," said Roland. "People came to their senses, and rejected it as it was even more extreme than the first one, which has caused so much damage."

My Swiss friend explained that the November referendum had been preceded by another vote on immigration last February. Then, a narrow 50.4 per cent of voters had supported a proposal to reimpose restrictions on the number of foreigners allowed to live and work in the country.

That decision caught many business and political leaders by surprise as it threw into question Switzerland's commitment to treaties with the European Union.

While Switzerland is not an EU member, it is closely linked to the the bloc and is a member of Europe's passport-free Schengen regime, which allows for free movement across borders. The vote to cap immigration would hit EU citizens, who had previously enjoyed unfettered travel and working rights in Switzerland.

The upshot of this was that businessmen like Roland found it difficult to hire professional staff from neighbouring countries, even when they struggled to find any Swiss takers for the job. And if workers could not come to the business, then the business would have to move to where they were, was the inevitable conclusion.

Switzerland, of course, is not alone in grappling with this challenge. Anti-immigration and anti-globalisation sentiments have been on the rise in recent years just about everywhere, from Amsterdam to Berlin, London and Paris, as well as Zurich.

In many of these societies, stagnating economies are giving rise to growing disillusionment with mainstream parties' ability to deliver on their economic promises, leading to voters flirting with fringe politicians who offer populist quick fixes, including curbing immigration to protect jobs and local cultures.

But these trends are seen closer to home too. In Singapore, we have heard similar cries from businessmen, lamenting that ever-tightening curbs on the flow of foreign workers is crushing their businesses. Not a few corporate chiefs, local and foreign, have voiced similar "I am done" lines to me, in utter despair of finding the people they need to keep up, let alone grow, their operations.

We all know the underlying causes that have given rise to this, from the ongoing economic restructuring and the political pressures that arose in recent years when infrastructure development lagged the pace at which immigration surged.

Unfortunately, this led to a marked shift in popular attitudes towards immigration and immigrants, with xenophobic flames fuelled especially by the online trolls. Even a recent debate on the need to curb littering and keep our city tidy has degenerated into anti-foreigner ranting, with much rubbish spewed online.

Yet, more and more accounts are now emerging of small and medium-sized enterprises having to relocate or fold, restaurants turning away customers because they have no waiters, condominiums with no cleaners, and generally, service standards which are not what they used to be because staff are over-stretched. The often repeated mantra that the only way out is a leap in productivity is no doubt true, and while there are some signs of progress, it has been painfully slow.

A consensus seems to be emerging, slowly and tentatively, among some business and community leaders that while tiny Singapore obviously cannot rely on an ever increasing number of imported workers, the anti-foreigner, anti-growth mood that the country has been lulled into is causing real harm to the economy, and with it the livelihood and prospects of our workers, present and future.

But voters still have to be convinced of this. At some point, we are going to have to come to terms with the reality that for Singapore to continue to thrive, and for us to enjoy the lifestyles we desire, the economy must grow, and workers will have to be found for jobs that need to be done, including from abroad if need be. This is especially so in the face of the double whammy of low birth rates and high rates of ageing that confronts us.

So long as we plan and provide the necessary housing, transport, health care and other facilities for these workers in a timely and sustainable fashion, Singapore has no reason to shut its gates. Indeed, as a city-state, it has a huge advantage over other cities such as Jakarta, Bangkok or Beijing in being able to use its national borders to carefully calibrate the flow of workers from abroad. Rejecting this controlled inflow and failing to manage it to greatest effect is a national folly we can ill afford.

In other words, immigration should be a competitive advantage that Singapore employs to stay ahead of others snapping at its heels, rather than the bogeyman now bandied about so cavalierly by some politicians to gain an electoral edge. It is time to call their bluff, and say enough is enough, before more damage is done.