Contact Singapore: a victim of its own success?

Singapore’s Ministry of Manpower and Economic Development Board rolled out the red carpet to arrivals from overseas when Singapore’s GDP was dipping. Today the welcome is nowhere near as warm.

By Jack Chong, edited by Francesca Ross

“I will no longer return to a cold, empty room after a long day, but to my family.” systems engineer Ms Wong Kit Yeng, declared from a 2009 glossy brochure that encouraged overseas Singaporeans to return home. In the wake of the global financial crisis, their country needed them.

Singapore has always been lauded as the economic miracle of Asia but the 2007 stock market crash saw the country’s GDP contract 2% in 2009. Something needed to be done. The Singaporean government established the Contact Singapore (CS) Alliance to attract both Singaporeans living abroad, and foreigners to take up residence in Singapore and drive growth. The strategy had two parts; one under the Economic Development Board (EDB), and the other under the Ministry of Manpower (MOM).

The alliance provided overseas businesses with access to entrepreneurial networks and consultancy services for expansion into Singapore. It also administered the Global Investor Programme (GIP) which granted wealthy foreigners the right to stay in the island-nation permanently if they made significant investments.

The idea was to put Singapore at the heart of Asia

Singapore had adopted this open-to-the-world, growth-at-all costs economic policy to revitalise its flailing post-crash economy. It was also hoped this would balance out the impact of a stubbornly low birth rate. The alliance’s investor programme brought foreign money into areas that would grow the economy, such as digital technologies.

These fresh ideas from foreign talent would create an entrepreneurial environment and grow the “disruptive” approach needed for a knowledge economy, the government thought. The results were excellent. The city-state enjoyed an estimated 11% compounded annual growth rate (CAGR) between 2008 and 2010.

Foreign direct investment and foreign talent flooded into Singapore

Contact Singapore was a success. Lim Hng Kiang, the Minister for Trade and Industry, said, “Over the past three years, the GIP has attracted close to 1,000 investors who have invested over US$ 1.5 billion … Close to 100 have invested directly in businesses … creating some 1,500 jobs.”

Many highly-qualified global expats were drawn to Singapore’s new economic opportunities. The annual increase in foreign workers (excluding foreign domestic workers) was 67,000. This outpaced the 51,000 for local employment between 2010 and 2012.

Overseas Singaporeans were, in theory, keen to return home

A Robert Walters survey showed an overwhelming 82% of Overseas Singaporeans were interested in returning home in 2015. This was even as the number of Overseas Singaporeans increased by 10%, hitting 200,000 in 2016.

Representatives for Contact Singapore fuelled this by collaborating with the Overseas Singaporean Unit. They gave keynote speeches, and made appearances at overseas recruitment events to encourage overseas Singaporeans to return home. Citizens living outside the country were reminded that their international experience made the increasingly valuable to their homeland.

The problem was that this group saw returning home as a form of insurance in case they fail overseas, rather than a goal in itself. Opportunities back home, although appealing, needed to be significantly better than those being offered overseas to bring people back. Expat works saw no such problem and were happy to take jobs in Singaporean businesses.

The floodgates were opened without due consideration for local sensibilities

Contact Singapore’s work helped bring in foreign talent and investment but they were not always welcome. Locals felt their standard of living had diminished thanks to these newcomers. Crowded public transport and rising housing prices created much unhappiness.

Among a wave of public discontent, the ruling People’s Action Party (PAP) lost the Aljunied GRC in the watershed 2011 General Elections. The government subsequently tightened its manpower policies to cut the number of people arriving.

Foreigners did not integrate well and online chatter created unrest

The problem was that the alliance made no efforts to integrate foreigners into the local culture. New arrivals lived separately from the locals and benefitted from handsome expat packages. Regular cultural assimilation programs would have helped soften their image and break down barriers.

The internet was another thorn in the side of successful integration. Online discussion ran wild with speculation about companies preferring foreign talent over local workers, while the government continually defended their pro-foreigner growth policies. No one appeared to be batting for the local team.

The government eventually established the Jobs Bank to enforce fair hiring practices. Companies flouting the Ministry of Manpower (MOM) Fair Consideration Framework were placed on a watch list and had their employment pass applications revoked.

Residency programmes were tweaked to ensure a more sustainable commitment

The way people qualified for permanent residency also changed. For example, any money spent on buying a home in Singapore was no longer counted as part of the millions of dollars in investment required. Individuals also found renewing their permanent residency was more difficult; their business needed to spend at last a million Singaporean dollars in the country each year and have at least five local employees.

This indicated a shift away from a cut-and-run business mentality which treated employees as disposable to instead building businesses that were sustainable long-term. More commitment from foreigners would entrench them in Singapore and keep the economy working smoothly.

Foreign workers were often employed by the regional head offices for multinational corporations; mostly dealing with sales and marketing functions. This situation will need to change for research and training opportunities to be a success. Innovation cannot take root unless a country can scale new technologies.

It is now more difficult to gain permanent residency status

Permanent residency applications now take up to a year to process. This is three times as long as previously. The number of successful applications has also dropped. The average figure between 2010 and 2015 was around 29,000, this is almost half of the 58,000 new PRs between 2004 and 2008.

Local workers needed more support

The boom in expats could have been handled better. Unemployment benefits could tide over displaced professionals, managers, executives and technicians who felt they had missed out thanks to foreign arrivals. Foreign firms should also be encouraged to promote local workers. Corporate tax relief could be given to companies when they appoint Singaporeans to senior roles.

Today, the Ministry of Manpower element of Contact Singapore is no more. The growth of digital platforms made its services obsolete. Foreigners could source housing directly through online platforms and international recruitment firms were bringing a steady flow of global talent into the country. An email to subscribers on 21 February announced that the project was officially discontinued; although the brand will continue under the ambit of the Economic Development Board.

Contact Singapore, as an alliance, was eventually a victim of its own success. The flood of successful and patriotic people it brought to the country both achieved its objectives and sowed the seeds for its demise. The project is dead but the spirit of supporting the homeland remains strong.