Singapore’s lesson: Managing immigration to create a win-win situation

Singapore’s policymakers have had to balance the economy’s need for immigrants with negative public sentiment towards the influx of these newcomers. Its experience serves as a good learning point for other countries facing similar issues.

Singapore has always been an immigrant society. Even before the founding of modern Singapore in 1819 when the British claimed it as a colony, people from all over the world had stopped or settled on this soil to trade or seek a better life.

After gaining independence in 1965, Singapore’s founding political leaders were acutely aware that given the country’s small land size and lack of natural resources, human labour and skills were the only thing it had to offer.

Why Singapore emphasised its immigration policy

When Singapore’s economy had to evolve from manufacturing to high-tech and value-added activities in the late ’80s, the government started pursuing a clear and distinct immigration policy. It was also then that the term ‘foreign talent’ was officially coined and debated in parliament.

The reasons cited for encouraging immigration were consistent and clear. First, to boost the economy with much needed talent, especially in new high-tech industries that the government was trying to build. Second, to counter the low fertility rate and greying population that Singapore was experiencing like many developed countries. Third, to replenish Singapore citizens who had chosen to migrate to other countries.

There was also a fourth but less-cited reason. As Singapore developed and its citizens became more educated and affluent, there was an acute need to import transient workers for lower-level blue-collar jobs that Singaporeans shunned, such as construction labourers, shipyard workers, sanitation staff and domestic helpers.

The economic and social impact of immigration

Singapore’s economic miracle since independence from colonial rule is well known. Between 1965 and 2015, its economy grew at an average rate of about 8 per cent. It has also successfully nurtured world-class industries such as petrochemicals, life sciences, information technology, precision engineering, creative media and financial services, which rely heavily on attracting foreign talent to broaden and deepen these industries. Developing these cutting-edge and high value-added industries attracted the foreign direct investment and jobs needed to keep Singapore prosperous.

However, this success has not been without social costs. Researchers at the Institute of Policy Studies (IPS), a research centre of the Lee Kuan Yew School of Public Policy at the National University of Singapore, discussed the social impact and integration issues that have arisen over the years in a comprehensive study published in January 2016.  

Some of the key social issues include the perception that immigrants were taking away white-collar jobs, places in schools and hospitals, as well as driving up property prices. Some citizens also expressed a fear that the national identity was being diluted, and that many expatriates will leave as soon as better opportunities were offered elsewhere. When social media became popular, some isolated incidents of derogatory remarks posted online by ‘foreign talents’ on Singaporeans also caused widespread anger.

Over the last three decades, various measures have been introduced to balance out the social costs.  

Social harmony and integration strategies

Singapore’s approach towards managing new immigrants and foreign talent can be summarised into two key strategies. The first attempts to incentivise foreigners into settling and integrating into the local society. The second involves social stratification strategies to distinguish between transient workers and knowledge-based talent.

Singapore’s government incentivises non-residents on work visas to look towards progressively becoming a Permanent Resident (PR) and then a citizen through different levels of subsidies, taxation and general welfare schemes for each category. For example, Singapore citizens enjoy very high rate of subsidies in housing, education and healthcare as opposed to non-residents or PRs.

Singapore also makes a distinct effort to tier its work visas according to skilled and highly educated foreign talent as opposed to transient blue-collar workers. Although every country does this, Singapore goes even further by enforcing general orientation programmes on the local laws and demarcating special zones for their housing (other than domestic helpers).

Limitations of the Singapore experience

It should be noted that Singapore’s experience in implementing and managing immigration policies as an economic driver does have its limitations in terms of transferability and context.

As a small island, Singapore has benefitted from its strategic geographical position and high reputation of transparency and efficiency as a business hub, as well as law and order and an excellent bilingual education system. As a result, Singapore’s approach of attracting non-residents to plant their roots here with their families work well, especially for foreign talent from developing countries.

Furthermore, Singapore is a young nation composed mostly of second- or third-generation immigrants. Since its independence, its style of governance and way of life has been centred on meritocracy. Most individuals and companies accept and embrace a market-based approach to conducting business and hiring of talent. However, such a pragmatic approach to economic development may not work well in other countries that adopt a socialist view towards society and governance. There are also many larger countries that would regard social stratifications as unacceptable, especially in the European context.

A shift in political narrative towards migrant integration

The political cost of pursuing a pro-immigration policy to boost the economy struck home in Singapore’s 2011 General Elections. The People’s Action Party (PAP), who has governed the country since independence and retains an overwhelming majority of seats in parliament, saw its lowest-ever vote share.

Immigration – more specifically, the pace of immigration – and the tensions, disconnects and divides it creates between locals and newcomers had become one of the key points of discontent amongst the voters.

In the face of vocal and rising discontent, the incumbent government had to change its narrative and strategy towards immigration. Tightening the conditions for the hiring of foreigners and reducing the number of permanent residence and new citizenship statuses granted were obvious enough. What was more subtle and interesting was a distinct shift in the narrative towards integration.

Leong Chan-Hoong, a Senior Research Fellow at IPS, recently published a paper analysing this shift in political narratives. He noted that while in the early days government propaganda advocated Singaporeans to accept and embrace the new immigrants, the narrative is now shifting more towards a balanced approach of encouraging new immigrants to proactively engage and integrate with locals.

Leong also noted in an interview with Global-is-Asian that Singapore’s government is increasingly aware that due to the social tensions that immigration policies inevitably produces, policymakers will have to look towards other ways of continuing to attract the best talents to drive the economy.

Upgrading and increasing the pool of local talent

In addition to investments into upgrading and retraining the skillsets of local citizens for sectors facing a talent shortage, the Singapore government is now also looking to bring back Singaporeans who have chosen to live and work abroad. About 6 per cent of Singaporeans live and work overseas. They have gained the international network and experience to help Singapore elevate its economy and compete in the global economy.

By tapping on this pool of mobile and skilled Singaporeans, the need for importing foreign talent can be alleviated. The government is actively looking at ways to attract them back to contribute to the local economy. As part of this effort, Leong, who heads the IPS centre for social indicators research, the IPS Social Lab, has initiated a survey to reach out to them and understand their motivations for relocating as well as their perceptions of their Singaporean identity.

The future for Singapore’s immigration policies

Ultimately Singapore is a small country with a land area of just 720 square kilometres. This is already an increase of about 24 per cent since 1965, largely through land reclamation. There is a limit to how much immigration can be tapped as one of Singapore’s economy-boosting tactics.

In a 2013 population white paper, the government projected an increase in the population to 6.9 million by 2030, an almost 30 per cent increase from the number then. This caused immediate public debate on the efficacy and sustainability of such a policy. Since then, Prime Minister Lee Hsien Loong has clarified that the 6.9 million figure was not a population target but a basis to plan for infrastructure for the long term.

This clarification shows the recognition that any future immigration policies must be tightly coupled with infrastructure development to maintain social harmony, in addition to proactive management of migrant integration. Only then will immigration continue to play a win-win role in its national – and not just economic – development.