Sunday, October 19, 2008

On Foreign Talent and the Consequences

How to deal with foreigners, or to be politically correct, 'foreign talents', has been always a hot topic in Singapore (other topics could be ERP, where to eat, and how to do water sports without water)

Singapore government is trying its best to convince the mass, especially Singaporeans, the importance of attracting and retaining foreigners.

Among the reasons are these people can help Singapore to grow, and it is better to get them in instead have them compete with Singapore elsewhere. These reasons are indeed valid, however this doesn't capture the whole spirit of why it has to attract eligible foreigners.

The ultimate driver for all these is: investment. Investments come in many forms, and the most useful form for the government will be business investment (BI). BI not only contributes to the GDP, it also hires and trains the local people, and pays the bulk of taxes.

In order for a business to thrive, the government must be efficient and corruption free, on top of that, the country should have a fair tax regime, sufficient human resources, strong infrastructure, and an open, robust financial market. If we check this list against Singapore, we find that Singapore has been doing well on most items, except human resources which are always limited, and financial market which still weak in comparison with those of New York, London, and even Hong Kong.

We will skip the issue on financial market and focus on lack of human resources in Singapore. Due to geographical constraint, Singapore has limited human resources to draw upon. After getting talents from Malaysia for years, it already hit a limit on what it can get. Here is where other foreigners come into play. Not only they can meet the demand of employers, but these people also effectively drive down real salaries while supposedly push up the qualities among employees.

This scenario is mean and definitely not pretty to the employees. Now one not only must be good in what they do, but they must do that cheap enough to be attractive. In other words the profit-to-be-realized and price ratio of someone must be high enough to survive this globalized economy. Thus when we hear people lament and complain about foreigners taken up their jobs, we can safely assume they are either not at the top of the food chain, or having quality of lives which don't commensurate with their abilities.

So what can Singaporeans do? Actually they have two ways. The first way will be to improve themselves to the extent they aren't afraid of competition. The second way will be to become employers themselves, or in another word, to start on entrepreneurship. By no coincidence, this is one of the things the government is pushing hard recently. Again, it is BI, silly.

Therefore all Singapore employees rejoice! We know if we can't keep our jobs, we can always start our businesses and fry kueh teow, and the gar'ment will help us.

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