According to Minister for Manpower Lim Swee Say, although the issue of foreign labor is a hot topic these days, the more critical issue is about the remodeling of the Singapore economy.

As growth moderates, Mr Lim says Singapore’s economy has to restructure into one that is less reliant on manpower, creates better jobs and ensures a healthy delivery of Singaporean workers, who ideally form the core (at least two-thirds) in all the major sectors.

He warned that a second path Singapore could take has been shown to be problematic by other developed economies, which have been plagued by shortage of jobs, wage stagnation and youth unemployment.

In an interview with mainstream news media, Mr Lim says that although he is confident that Singapore will take the former route, as the Government, unions and employers are sparing no efforts towards achieving this end, he warned that nothing is pre-ordained, and the stakes are high.

“If we do it wrong, all the problems faced by the developed economies today will come to us.”

Sharing about Singapore’s economic history, Mr Lim said that Singapore had arrived at a similar economic crossroads in the past, but leaders then had made the right choice by pursuing a high growth model dependent on a large supply of foreign labour. This, said Mr Lim, “served the interest of our local workers very well … that was the period in which the world was having a shortage of jobs. But in Singapore, because of our high growth policy, we had a shortage of workers”.

He added: “(There was also) wage stagnation around the world, but we saw wages grow in real terms here. The world has increasingly been bogged down not just by unemployment, but more severely, youth unemployment – you see that all over the world. Yet in Singapore, we managed to escape all that … I would say it’s mainly due to our healthy economic growth, which was in a way reinforced by higher manpower growth through the increase in foreign manpower.”

However, Mr Lim admitted that the old model was unsustainable – both on the social and economic fronts, as overcrowding and other social problems have come to the fore even as productivity has slowed.

“There is no easy way out … We can’t have the best of all worlds,” Mr Lim said.

According to Mr Lim, he credits the government with putting in place a whole host of initiatives to help Singapore in its restructuring. Mr Lim says that the most significant initiatives is the SkillsFuture movement and the push to create “jobs of the future”.

Strong tripartism, he stressed, will be the bulwark against the problems dogging developed economies around the world.

“In Singapore, we do not intend to get it wrong,” said Mr Lim, who headed the labour movement for eight years before taking on his current portfolio. “The tripartite partners are working very closely together to make sure that we get it right.”

On Wednesday, the Ministry of Manpower (MOM) announced a two-year pilot that gives small and medium enterprises more leeway in hiring and retaining foreign workers – provided they commit to becoming more manpower-lean, developing their workers, and building a stronger Singaporean core eventually. This policy, however, was not received well by Singaporean netizens, who viewed the move as a softening of the government’s stance towards foreign labor.

Mr Lim also recently spoke about companies having to do their part and learn from others, including foreign ones. According to Lim, local firms would have to upgrade their industries in manufacturing, services and construction. He says MOM has set up “working groups” in the various sectors to “learn from the best” by looking at ways to improve the way things are currently done.

“In the past, a very straightforward way to grow is to hire more workers. Do more of the same,” he said. “(Now) they have to learn how to make better use of technology, equip workers with better skills, find ways to redefine engagement with customers.”

For the MOM, its areas of priorities are to transform the economy to become more manpower lean, maintain the overall ratio of Singaporean workers to foreign employees at 2:1, and to raise the quality of foreigners who arrive here to work. The goal is creating a “future ready” Singapore, Mr Lim said.

In terms of strengthening the Singaporean core, the Government has introduced numerous measures including the Fair Consideration Framework, the national jobs bank, professional conversion programmes and the SkillsFuture movement.

From October, companies will need to publish the salary range offered for job vacancies placed on the Jobs Bank, or have their subsequent applications for Employment Passes rejected.

To enhance the quality of foreign PMEs (professionals, managers and executives), the ministry also announced earlier that it would reject applicants with “doubtful” qualifications, such as those from degree mills.

Mr Lim added: “Between now and 2020, our workforce is not going to shrink. Our immediate challenge is that over the next three years or so, we should really focus our energy … to make this transition (to a manpower-lean economy) together,”

Beyond that, workforce growth would slow but not necessarily stagnate or shrink, he said.

“There are other factors at play, for example, marriage and procreation. I would say that as Singaporeans, we should not just surrender, put our hands up and say, ‘Look, there’s no way we can up our birthrate, therefore, let’s accept that eventually, our workforce will shrink, our population will shrink’,” Mr Lim added.

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