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Singapore Cannot Afford to Close Its Borders Completely to Foreign Workers

Monday, 10 May 2021 [Singapore] – The Singapore Business Federation (SBF) welcomes the increase in foreign worker levy rebates for the Construction, Marine Shipyard and Process (CMP) sectors announced on 8 May. This will provide much needed relief to businesses in these sectors that have been impacted by the tighter border restrictions and stricter Safe Management Measures.

This comes on the back of the announcement on 7 May that the Government is reducing entry approvals for work pass holders entering Singapore in the coming weeks. Although those from the CMP sectors and those from lower risk countries/regions will largely not be affected, the tightened measures will still have significant impact on businesses.

While we understand the need for some new restrictions to reduce the risks of importation of COVID-19 cases, we hope that the new restrictions on entry approvals will be relaxed as soon as the COVID-19 situation allows. In the interim, we hope that the list of lower risk countries/regions, for which the new restrictions do not apply, can be expanded to include other countries/regions with lower risks.

Coping with the Tightening of Foreign Manpower

During the pandemic, Singapore lost many foreign workers who chose to return to their home countries or were retrenched. Over the course of 2020, non-resident employment decreased by 195,900, compared to an increase in resident employment of 14,900. Overall, employment shrunk by 4.8%. This is further compounded by travel restrictions that have slowed down the inflow of foreign workers needed to replace those who left.

As a result, many businesses are struggling to cope with a shortage of manpower, especially as the recovery starts to pick up. Some businesses have been forced to close or scale down their business, resulting in their Singaporean employees being displaced.

Some of the top sectors with unfilled manpower demand include F&B, healthcare, electronics manufacturing, retail, and logistics & transportation. The jobs these businesses are looking to fill include service crew, cooks, drivers, factory operators,and patient service associates. We can expect there to be a further squeeze for these businesses with the latest reductions in entry approvals for work pass holders from higher-risk countries.

Sufficient Manpower Required for Business Operations and Growth

Without access to sufficient manpower, there will be serious impact on businesses, on our economy and on Singaporeans’ livelihoods, both in the immediate term and in the longer term.

In the immediate term, essential services like waste management, healthcare and transport will be impacted if they are not able to get the workers they need. This will result in degradation of essential services and disruptions for Singaporeans. Service sectors like retail and F&B will also be impacted, affecting the service standards that Singaporeans can enjoy.

Beyond the immediate term, there will also be longer term impact to many other sectors, with consequential impact on job creation and job opportunities for Singaporeans.

For example, without access to inflow of foreign workers, delays in construction projects will be aggravated. This does not just affect when Singaporeans can get their HDB flats or their home renovations. It also affects when new investments in Singapore can be actualised, be it new manufacturing plants, new R&D or innovation centres, or new offices. This will in turn mean delays in when Singaporeans can take up the new jobs that the new investments are bringing in.

Insufficient manpower will also affect investors’ confidence in Singapore and Singapore’s competitiveness and attractiveness as a business destination. Should investors decide to exit Singapore as a result, this will mean job losses for Singaporeans.

SBF CEO Mr Lam Yi Young said, “It is important that we strike a balance between managing the risks of importation of COVID-19 cases and the manpower needs of our economy. Businesses fully understand and support the need for measures to lower the risk of importing COVID-19 cases. However, we also cannot afford to close our borders completely and deny entry to all foreigners. We must have in place a risk management framework for some foreigners to be able to come into Singapore, with the appropriate testing and quarantine regimes in place.”

Mr Lam added, “Businesses have been adjusting to the tighter manpower situation by actively transforming and digitalising their operations, upskilling their local workforce, and trying to attract more Singaporeans to join them. However, businesses must still have access to an adequate level of manpower to remain viable. As the global economy recovers, without sufficient manpower, our businesses will not be able to seize new opportunities for growth, and this will result in fewer good job opportunities for Singaporeans.”

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