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Singapore Will Stick to Foreign-Labor Policies After Riot

Singapore's Acting Manpower Minister Tan Chuan-Jin
Tan Chuan-Jin, Singapore's acting minister for manpower, is seen in this handout photograph taken in Singapore, on Oct. 14, 2013. Source: Singapore Ministry of Manpower

Dec. 16 (Bloomberg) -- Singapore will continue to tighten the influx of overseas laborers after a riot involving about 400 foreign workers, said Acting Manpower Minister Tan Chuan-Jin.

While foreign labor has contributed to the growth of the economy, there has been a cost, including a strain on infrastructure, Tan, 44, said in an interview on Dec. 13. Police have charged 33 people in relation to the riot, the first in Singapore in more than four decades.

“We are continuing to tighten our manpower policies because we do want to move to a leaner approach,” Tan said. Asked whether poor living conditions led to the riot and if the government would step up measures to ensure foreign workers’ well-being and safety after the incident, he said “it’s premature to conclude that actually it’s because of all these other deep-seated reasons and therefore the riot happened.”

Singapore has tightened rules for overseas manpower for the past four years, including caps on the number that can be hired in some industries and raising levies. The population has jumped by more than 1.1 million since mid-2004 to around 5.4 million, leading to congestion and competition for housing, jobs and education. Discontent over the number of foreign workers, who make up about a third of the workforce, led to the worst election result for the ruling party since independence.

The riot that broke out on the night of Dec. 8 in the city’s Little India district after a bus ran over and killed an Indian national, has reignited the debate about Singapore’s dependence on foreign laborers.

‘Relatively Happy’

A survey conducted in 2011 by the government among work-permit holders showed 90 percent were “relatively happy” to be in Singapore, 80 percent wanted to stay and about 70 percent were happy to recommend their friends and family to come to Singapore, Tan said.

“It was a fairly large sample size and that has pretty much been echoed by the feedback we’ve been getting,” Tan said in the interview with Haslinda Amin on Bloomberg Television. “In the aftermath of the riot, again we’ve pushed out to find out the sentiments and it’s quite consistent.”

Singapore authorities prosecuted five Chinese nationals and deported 29 others over their involvement in an illegal strike in November last year, an unusual public display of labor discord. The striking workers, all from China, were unhappy with their salary increments and raised concerns about living conditions, according to their employer SMRT Corp.

The manpower ministry has had about 3,700 dispute cases over issues including salary and work conditions brought to them this year, Tan said. There are around 1.1 million lower-skilled foreign workers in Singapore, according to the ministry.

Worker Curbs

A proposal to boost the population to 6.9 million by 2030 prompted thousands to protest in February.

In September, the city widened measures to contain foreign-worker inflows to include professional jobs, responding to complaints that companies were hiring overseas talent at the expense of locals. In February, the government said that companies must pay higher levies for lower-skilled foreign employees over the next two years and cut the proportion of overseas workers in some industries.

The government is keen to boost the productivity of local companies, Tan said.

“We’re beginning to see it take effect, the pain is being felt by companies,” he said. “You do not know when exactly, at which point it will bite and you don’t want to overdo it, but a series of measures have been unfolding over the last few years.”

Tight Market

Singapore added 33,100 jobs in the third quarter and the unemployment rate was 1.8 percent in the same period, the Ministry of Manpower said in a report on Dec. 13. The labor market will remain tight next year and the government expects some upward wage pressure in 2014, Ministry of Manpower Divisional Director Adrian Chua said last month.

“If the government tries to implement ways to raise living conditions of work permit holders, this will indirectly add costs to producers,” said Joey Chew, a Singapore-based economist at Barclays Plc. It “might actually make them more wary about increasing, bringing in more workers.”

The government banned the sale and consumption of alcohol this past weekend in Little India, which draws thousands of foreign workers on their Sunday day off.

Tan said the nature of the rioters and where they are from doesn’t indicate that labor relations contributed to the riot.

“I’m not denying that there are egregious cases, there are, I see them myself,” Tan said. “But I wouldn’t therefore paint that picture of the entire landscape. I think by and large, workers here are reasonably looked after and we will go after employers that mistreat their workers.”

To contact the reporters on this story: Sharon Chen in Singapore at schen462@bloomberg.net; Jasmine Ng in Singapore at jng299@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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