Monday, 31 August 2020

CECA: Clarifying 3 common misconceptions about Singapore-India Comprehensive Economic Cooperation Agreement

Chan Chun Sing clarifies 3 common misconceptions about CECA
In an interview on Friday, Trade and Industry Minister Chan Chun Sing debunked three misconceptions about the Singapore-India Comprehensive Economic Cooperation Agreement (CECA). The free trade pact has come under attack from some quarters on social media in recent months as well as during the general election.
By Grace Ho, Senior Political Correspondent, The Sunday Times, 30 Aug 2020


It is not true that CECA gives Indian nationals the right to take up citizenship or permanent residency, said Mr Chan. In Chapter 9 of the agreement on movement of natural persons, Article 9.1.2 states: "This Chapter shall not apply to measures pertaining to citizenship, permanent residence, or employment on a permanent basis."

The proportion of ethnic Indian citizens in the Singapore population has remained stable, he said.

The agreement does not oblige Singapore to automatically grant employment passes (EPs) to Indian nationals. Like all other foreigners, they must meet the prevailing EP criteria, like minimum salary thresholds.

A key bone of contention is intra-corporate transferees (ICTs), which refer to transfers of a company's employees from one country to another. In these instances, companies that bring them in do not have to advertise the position to locals as part of the Fair Consideration Framework.

But they must still meet the EP criteria, as well as have industry experience and worked in the parent company for a minimum duration, said Mr Chan.

Under CECA, such transferees must have worked at least six months in the parent company, among other requirements. They can stay a total term of eight years, at most.

Mr Chan said Singapore's CECA commitments are neither unique nor overly broad, as most of the 164 members of the World Trade Organisation have also made commitments on entry of ICTs under the General Agreement on Trade in Services. Local companies tap Singaporean ICTs too, when they expand overseas, he said.

"It applies equally to Indian companies coming here and to Singapore companies going overseas - under CECA or under any other (free trade agreements). This is to help them kick-start the overseas operations."


Since CECA was signed in 2005, Singapore's trade with India has grown by $7.6 billion and investments, by 34 times.

By 2018, more than 650 companies in Singapore had invested in India.

Mr Chan said the trade pact not only protects Singapore companies that invest in India, but also attracts foreign investors who invest in India, and employ Singaporeans to manage their investments.

In Singapore, these companies employ nearly 100,000 Singaporeans and permanent residents.

What this means is that the Indian market, as with other large markets, helps these companies to diversify and make their operations more robust.

"Besides having better access to a huge market and all the savings that come with tariff reductions, it also allows us to grow our capabilities," said Mr Chan.

Companies such as PSA and engineering firm Meinhardt are also now key players in port management and engineering in India, he added.


Mr Chan said the presence of certain nationalities is shaped by the choice of sectors Singapore wants to grow.

Currently, these include new and fast-growing sectors, such as info-communications and technology, professional services and financial services.

It is not that Singaporeans are not good enough for the jobs in these sectors, but that Singapore does not have enough people for these jobs, he said.

"We do not have enough numbers to get to the critical mass."

Mr Chan said the profile of Singapore's foreign workforce will evolve over time as its industry profile changes.

"In the 1960s and 1970s, when we were building up our petrochemical industries, the top management positions (in companies such as Shell) were not mainly Singaporeans either. But after a few decades, why is it that the top spots are held by Singaporeans?

"Because we allowed the previous generation the opportunity to create jobs not only for themselves, but also for this generation."

The same thing happened in the 1980s and 1990s, when Singapore's focus was on electronics and semiconductors, he said.

"Today, we have a whole generation of precision engineering firms, engineers to support the semiconductor industry, and have many spin-offs."


Staying open to world key to securing good jobs for Singaporeans: Chan Chun Sing
He says free trade pacts attract investments, Singaporeans still get top priority for jobs
By Grace Ho, Senior Political Correspondent, The Sunday Times, 30 Aug 2020

At a time when protectionist sentiment is on the rise globally, Singapore must remain open to the world in order to attract investments and create good jobs for Singaporeans, Trade and Industry Minister Chan Chun Sing said.

One factor that has played a part in the expansion of multinational companies here is the network of free trade agreements (FTAs) Singapore has with major trading partners.

These FTAs help create good jobs for Singaporeans, Mr Chan said, citing how resident workers employed as professionals, managers, executives and technicians (PMETs) rose from 1.12 million in 2014 to 1.3 million last year. Over this period, the share of PMETs among employed residents rose from 53 per cent to 58 per cent.

His comments, in an interview with The Sunday Times and Lianhe Zaobao on Friday, come as sentiments against foreigners and FTAs are souring as the recession deepens. Some critics of FTAs have said that the pacts favour foreigners.

He said the anxiety Singaporeans have about jobs is understandable.

Citizens continue to get top priority for jobs, Mr Chan stressed, adding that the real issue is not the number of foreigners, but a weak economy that is making everyone worried.

The Government will help by "going all out" to attract investments and create good jobs, he said.

He added that while short-term measures include financial support for companies, jobs matching and training programmes, there is a longer-term challenge - helping Singaporeans succeed in a hyper-competitive world post-COVID-19.

"The foreigners issue must be seen in this context," he said.

In the interview, Mr Chan spelt out three aspects of Singapore's position on having foreign manpower complement a core of citizens.

One, there must be fairness and zero tolerance for discrimination of any kind, and tough action has been taken on firms with hiring bias.

Two, diversity matters and firms should avoid hiring from only a single source country.

Three, localisation - the transfer of skills to develop a pipeline of local talent - is key, and many Singaporeans have benefited and taken leadership roles in multinationals.

At a time when some countries are reassessing the benefits of FTAs, this is not the time to take a wrecking ball to the pacts Singapore has signed, said Mr Chan.

The network of FTAs is greater than the sum of its parts, because no investor in Singapore plans to serve only one external market, he said. Therefore, the more FTAs Singapore has, the more competitive it is in attracting investments and creating jobs.

This is especially critical as Singapore is a city-state without a natural hinterland, he added. "We have to create what we call a man-made competitive advantage... this applies to all our FTAs."

He acknowledged that it is difficult for many Singaporeans to understand that their companies are directly or indirectly serving these markets. But, he said, "individually, bilaterally, each and every FTA adds to the network effect".

Of Singapore's 25 FTAs, the Comprehensive Economic Cooperation Agreement (CECA) has often been a target for critics who say it opened the floodgates for Indian nationals to enter Singapore.

Mr Chan pointed out that CECA does not grant Indian nationals unconditional access to Singapore and immigration privileges. Like all other foreigners, they must meet Singapore's prevailing employment pass criteria, among others.

"We must never give up our rights to enforce our own rules, especially when it comes to immigration and citizenship," he said.

And while the concentration of certain nationalities in high-growth sectors - such as information and communications technology and professional and financial services - is shaped by the choice of sectors Singapore wants to grow, Mr Chan said, they require a critical mass of skilled people and hence a certain number of foreigners.

But Singaporeans are being trained and given a fair playing field to compete for them, he added.

He pointed out that as global supply chains reshuffle and companies rethink their global footprint, Singapore must aim to win not only high value-added activities, but also critical parts in the entire value chain.

"It is not enough to just make money and create good jobs - all those are still necessary but not sufficient. We need to have critical parts which cannot be easily bypassed by others."

Reassuring Singapore citizens of their place in the sun, Mr Chan said: "I don't believe Singaporeans are afraid to compete. I've every confidence in their ability to compete.

"All they are asking for is a fair playing field, and to strengthen local development efforts. We will make sure that we do this, and this is what we are going to do for the next generation."

Fairness in hiring, skills transfer help ensure locals benefit: Chan Chun Sing
Diversity in sourcing foreign manpower also important for companies
By Grace Ho, Senior Political Correspondent, The Sunday Times, 30 Aug 2020

Trade and Industry Minister Chan Chun Sing sums up the Government's position on foreign manpower in three words: fairness, diversity, and localisation.

First, there is "zero tolerance for discrimination of any kind", he said in an interview with The Sunday Times and Lianhe Zaobao on Friday on Singapore's approach to strengthening its workforce even as it had to remain open to talent and free trade pacts to create jobs and grow the economy.

Companies with discriminatory hiring practices will be put on the Fair Consideration Framework watch list, and their applications for foreign work passes curtailed.

The framework was introduced in 2014 after Singaporeans voiced unhappiness about foreigners taking away good-paying professional, managerial, executive and technician (PMET) jobs from them.

Second, companies that need to tap foreign manpower should avoid recruiting from only a single source.

"If we want to serve international markets, then it is only logical that businesses have diverse international teams," Mr Chan said.

It is also good for business continuity. As travel restrictions and lockdowns during COVID-19 have shown, over-reliance on any single source of manpower can be disruptive.

Companies that have a diverse workforce also fare better at social integration, said Mr Chan.

Third, localisation - the transfer of skills to develop a pipeline of local talent - is key. For companies that need improvement in this area, economic agencies and trade associations will work with them to boost their talent development system and practices.

"Many Singaporeans have benefited from these development programmes and have gone on to leadership positions," said Mr Chan, citing ExxonMobil Asia-Pacific and Shell Singapore as examples of multinationals whose operations here are helmed by Singaporeans.

One factor that has played a part in these multinational giants growing their presence here is the proliferation of free trade agreements (FTAs) Singapore has in place with major trading partners.

These FTAs help create good jobs for Singaporeans through their network effect, added Mr Chan.

"Whenever investors invest in Singapore, they do not plan on just serving the local market, nor do they plan on serving just one other external market," he said. "The more FTAs we have... the more competitive we are in attracting investments and creating jobs."

Of Singapore's 25 FTAs, the Singapore-India Comprehensive Economic Cooperation Agreement (CECA) has often been fodder for critics of the Government who say it opened the floodgates for Indian nationals to enter Singapore.

A lot of the misgivings about CECA centre on the belief that it grants Indian nationals and their dependants unfettered entry into Singapore. Mr Chan countered that CECA does not grant Indian nationals unconditional access into Singapore and immigration privileges.

Like all other foreigners, they must meet Singapore's prevailing Employment Pass (EP) criteria, such as minimum salary thresholds, he said.

What about the call from some opposition parties - notably the Progress Singapore Party - to review FTAs, including CECA?

Mr Chan said that while it is tempting to play to the gallery, re-negotiating an FTA is not just about what Singapore wants. "What bargaining power do we have to get something from (the other party)? Are we able to get what we want without giving up even more?"

A larger number of FTAs strengthens Singapore's bargaining power because it provides more options, he said. "Getting rid of FTAs is not the correct antidote. Renegotiating an FTA at the wrong time is also not the correct antidote."

Mr Chan noted that the concentration of certain nationalities in some sectors is shaped by the fact that these are high-growth areas competing for global talent.

If Singapore focuses its efforts on growing a very small set of sectors, it may stand a better chance of ensuring a higher proportion of locals in each sector, said Mr Chan.

But then, the economy becomes concentrated and fragile, and the choices of jobs for the next generation will be limited.

"If we want the diversity of choices, then we will need a certain (foreign) complement to each of these sectors," he said, admitting it is a "heartwrenching" dilemma.

But he said it is the right thing to do - develop high-growth sectors, create better jobs for Singaporeans and train them up quickly, and give them a fair playing field to compete.

Singapore will also ensure it continues to invest in schools and continuing education so that people have the skills to stay competitive, in particular those in their 40s and 50s. The Government is also helping to give older and middle-aged Singaporeans greater help on the jobs and skills front, he added.

The latest effort to level the playing field was the announcement on Thursday that the minimum qualifying salary for EPs and S Passes, which allow foreign professionals and mid-skilled workers to work here, will be increased.

From Tuesday, 1 September, firms applying for new EPs for foreign professionals need to pay them at least $4,500 a month, up from $3,900. The bar is higher for those in financial services - at least $5,000 for new EP holders from Dec 1, the first time a higher qualifying salary is specified for a particular sector.

What does Mr Chan think of some Singaporeans' fears that firms will use the opportunity to raise the salaries of these foreigners?

"I don't see this as a minimum salary. When we raise the headroom (for pay), it actually creates more space for Singaporeans to compete," he said, adding that this must be done progressively so as not to shock the system. "Even as firms move towards less reliance on the lower end of the EP holders, they still need time to make adjustments."

He stressed that Singapore is still very much open for business.

"We need to be the magnet where people still want to do business in, and do business through.

"In fact, there are things in the COVID-19 world that have accentuated our strengths: strong leadership, a stable environment, coherent long-term policies, connectivity to the world, protection of intellectual property, stable tripartite relationship, skilled workforce and, most importantly, a progressive people that embrace the world."

No obligation under CECA for Singapore authorities to grant Indian nationals PR status or citizenship: Ministry of Trade and Industry
By Lim Min Zhang, The Straits Times, 28 Aug 2020

There is no provision under the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) for Indian nationals to become Singapore permanent residents and citizens, said the Ministry of Trade and Industry (MTI).

And it is not true that CECA requires the Singapore authorities to automatically grant employment passes (EPs) to professionals, managers and executives (PMEs) from India who want to work here, the ministry added.

The ministry, in a statement yesterday, was responding to media queries after the merits of the pact, which was signed in 2005, have come under scrutiny again in recent weeks.

None of Singapore's free trade agreements, including CECA, make it an obligation for the Republic to automatically grant EPs to any foreign nationals, the MTI statement said.

"All foreign nationals applying for EP must meet our prevailing criteria, and all companies must comply with rules on fair hiring," the statement added.

Singaporeans are understandably concerned about competition from foreign PMEs amid the challenging economic and employment situation, said MTI.

However, it is misleading to attribute the number of Indian PMEs solely or mainly to CECA, the ministry added.

This was especially so, MTI said, for "intra-corporate transferees" or those who are transferred from a company's overseas unit to Singapore.

This category of workers in Singapore has consistently been at below 5 per cent of all employment pass holders in Singapore, the statement said.

They also come from a wide range of countries, with Indian nationals making up only a small segment, it added.

Under CECA, such transferees are required to have worked for their company for a period of not less than six months, among other conditions.

They are also allowed to stay for a total period of not more than eight years.

This is not the first time CECA has come under the spotlight.

Claims that the bilateral trade agreement has allowed Indian nationals to take PME jobs meant for Singaporeans re-emerged last year, after an expletive-laden video surfaced online showing a man originally from India lashing out at a security guard at a condominium.

Falsehoods on hiring in banks not helpful, unfair to foreigners who work here and contribute to Singapore: Monetary Authority of Singapore
By Calvin Yang, The Straits Times, 29 Aug 2020

Spreading falsehoods on the hiring practices of financial institutions is unhelpful and unfair to foreigners who work and contribute to Singapore, the Monetary Authority of Singapore (MAS) said yesterday.

It was responding to queries from The Straits Times on recent social media posts targeting foreign professionals at financial institutions, some of which made false claims and sought to create ill feelings against workers from certain backgrounds.

"We hear the views and concerns of Singaporeans who have spoken up on the issue of local representation in the financial sector," the central bank and financial regulator said.

"But the propagation of falsehoods by some individuals is unhelpful for an informed discussion on these issues; not to mention, unfair to the financial institutions concerned as well as to the foreigners who work here and contribute to Singapore."

MAS said overall, the picture is a positive one for Singaporeans. Singapore citizens take up seven out of 10 jobs in the financial service sector.

The regulator said that it has been working closely with financial institutions for many years now to grow a workforce with a strong Singaporean core. "These efforts have helped to train and develop many Singaporean finance professionals," it said.

"But we need to do more, especially under the current economic conditions, to create more job opportunities for Singaporeans."

MAS said that it is "stepping up efforts to ensure more diversity in firms and functions, and equal opportunity for Singaporeans" and that more details will be shared in the coming months of what has been achieved and what more needs to be done.

"As an international financial centre with global and regional functions, we will necessarily have an international character to the workforce," MAS said. "But there are areas we can do better - some functions and some firms where there is scope to increase the proportion of Singaporeans."

Particularly, there is an urgent need to build the local talent pool in technology-related areas to meet increasing demand, MAS added.

It said: "Singaporeans are generally doing well in the financial sector but MAS would like to see more of them move into the senior ranks."

The issue of hiring bias has been a concern among professional, managerial and executive workers in the financial service sector, more so in a weak labour market as a result of the COVID-19 pandemic, and the authorities have been taking measures to ensure Singaporeans are fairly treated.

Early this month, the Ministry of Manpower (MOM) announced it had placed another 47 employers - of whom 30 were in the financial service and professional service sectors - on a watch list for potentially discriminatory hiring practices.

On Thursday, the MOM raised the salary thresholds for Employment Passes (EPs), with a higher bar for financial services, and for S Passes, a move likely to push employers to hire more local workers.

From next Tuesday, companies applying for new EPs for foreigners will need to pay them at least $4,500 a month, up from $3,900 now.

In the financial service sector, from Dec 1, new EP holders need to be paid at least $5,000. This is the first time a higher qualifying salary has been set for a specific sector.

The qualifying salaries for older and more experienced workers will be revised accordingly.

In response to a Straits Times reader's comments on the workforce composition in banks, MAS managing director Ravi Menon said in a letter to The Straits Times Forum page published on Aug 19 that Singaporeans make up 70 per cent of the sector's workforce and permanent residents make up another 14 per cent.

He said that while Singapore citizens account for about 70 per cent of senior management roles in retail banks' local functions, this proportion is about 43 per cent across the entire sector.

Mr Menon noted this reflects Singapore's role as an international financial centre. He also said while Singaporeans are well represented across business functions, there is a need to improve the local proportion in areas like technology and risk management.

The three local banks, DBS, OCBC and UOB, have said that over 90 per cent of their workforce here are Singaporeans and PRs, while Standard Chartered has Singaporeans and PRs forming 83 per cent of its staff.

Human resources practitioner Joanna Yeoh, who has been in the sector for 25 years and took to social media this month to write about how "the scale has been tipped against locals for a while", said the latest move to raise the minimum salary criteria of foreign professionals sends "a strong signal" that the authorities are serious about ensuring Singaporeans are given fair access to job opportunities.

Other observers said negative sentiments about foreigners tend to grow in times of uncertainty.

People face a higher risk of being laid off and may perceive foreigners to be competing for jobs, said National University of Singapore senior economics lecturer Kelvin Seah.

Institute of Policy Studies senior research fellow Mathew Mathews said many Singaporeans are aware of the reality that a small country like Singapore has to attract foreign talent to stay globally competitive.

"But when economic difficulties hit home, it is hard to also be supportive of many foreigners taking up what is perceived as the better jobs," he added.

Mr David Leong, managing director of human resources firm PeopleWorldwide Consulting, pointed out that many highly paid expatriates in the financial scene are global workers with varied experiences.

He added: "I am certain Singaporeans can have the same opportunities for such roles but they must be willing to be immersed overseas for those experiences."

Some misleading social media posts remain online despite being proven false
By Calvin Yang, The Straits Times, 29 Aug 2020

Social media postings hitting out at some banks and financial institutions, for their hiring practices which appeared to favour some nationalities ahead of Singaporeans, have been doing the rounds.

Some of the commentators, however, have been lax about fact-checking or ensuring that their posts reflect reality. Others have made misleading or even false claims.

For example, one post included a photo purportedly taken in a DBS Bank office here which showed a large number of non-Singaporean workers posing with its chief executive officer Piyush Gupta.

Another post included a photo purportedly taken at DBS' IT department at the bank's Asia Hub in Changi Business Park.

Both proved to be false. The bank clarified in a Facebook post on Aug 15 that the images were taken in its India office and not in Singapore, as the posts appeared to suggest.

The first photo was posted on DBS India's Facebook page three years ago, on Sept 5, 2017, when the bank was celebrating the opening of a new office in Mumbai.

The event was attended by Mr Gupta as well as Indian cricket star Sachin Tendulkar, who was collaborating with DBS to enrich the lives of children through sports.

The second photo was taken at an application security conference held at DBS Asia Hub 2 in Hyderabad a year ago.

When contacted and asked by The Straits Times about the post he created and whether he had made any efforts to verify the source of the image, businessman Dennis Lim replied by asking why he should have to do such checks.

He added that he has contacts who are bank staff and who have expressed concerns about the large number of expatriates at Changi Business Park.

That, apparently, was sufficient evidence to back his views in his post, even if the photo was a misrepresentation and used out of context.

Earlier this month, the managing director of a recruitment firm posted on his Facebook page a photo collage of LinkedIn profiles to show how some management positions at Standard Chartered Bank in Singapore were filled by staff of one nationality.

It was posted by Mr Victor Teoh, 51, managing director of RecruitPlus Consulting, who has been in human resources for over 10 years.

In his post, he recounted how a friend who used to work for the bank would attend meetings where he was the only Chinese present. He also questioned if some bank roles required skills that locals do not have. "Is it because we don't have local banking talent?"

Asked about his post, he told ST he relied only on public information, such as that on LinkedIn, to verify the claims.

He added: "We are not saying that foreigners should not come in.

"But if there is a dominance of a certain nationality, then that would be an issue, especially right now when we are losing jobs."

These and other posts - questioning why these foreigners were hired over locals - were widely circulated. Some of the posts remain online, despite the financial institutions debunking their claims.

Standard Chartered's statements on the matter have highlighted the fact that a majority of its employees are locals, no different from many major financial institutions here.

The bank said earlier this month that Singaporeans form 70 per cent of its headcount of 10,000, and citizens and permanent residents together form 83 per cent of its workforce.

It said: "The bank has invested heavily in grooming Singaporean leaders - 70 per cent of its Singapore management team are Singaporeans." The bank added that it also has many Singapore core leaders across global and regional roles, with 140 Singaporeans posted overseas.

Yesterday, the Monetary Authority of Singapore told The Straits Times it heard the views and concerns of Singaporeans who have spoken up on the issue of local representation in the financial sector.

It also said the propagation of falsehoods by some individuals is unhelpful for an informed discussion on these issues, and unfair to the financial institutions concerned as well as to the foreigners who work here and contribute to Singapore.

FTAs or CECA have not hurt Singaporeans' job prospects: DPM Heng Swee Keat

Free Trade Agreements have created more jobs for Singaporeans: Chan Chun Sing

Singaporeans' concerns about foreign talent: Chan Chun Sing addresses fears about foreigners taking jobs from locals

Temasek calls out racist Facebook posts targeting its Indian employees; observers say posts show real tensions that need to be fixed

Government will address Singaporeans' anxiety over competition for jobs from foreigners: President Halimah at Opening of 14th Parliament

Singapore's recession deepens with worst ever quarterly contraction of 13.2% on a year-on-year basis in Second Quarter 2020

Government to pump in $8 billion more for COVID-19 support measures: DPM Heng Swee Keat in Ministerial Statement on 17 August 2020

Minimum salary for Employment Pass to rise to $4,500 from 1 September 2020; higher qualifying salary of $5,000 for financial services

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