May 30 (Bloomberg) -- Xenophobia in Singapore, confined to a minority fringe, hasn’t had an impact on foreign investment in the Asian country, said Law Minister K. Shanmugam.
“People accept that xenophobia is a minority,” Shanmugam, who is also Foreign Affairs Minister, said in a May 26 interview. Savvy multinational companies “know that these sentiments are there in every part of the world.”
Companies are adjusting to the city’s curbs on labor from overseas after voter discontent over increased competition from foreigners. Prime Minister Lee Hsien Loong this week deferred S$2 billion ($1.6 billion) of construction projects to ease demand for foreign workers in the country, where non-citizens make up about a third of the workforce.
Singapore is taking the “middle path” in balancing the needs of companies and citizens’ concerns, Shanmugam, 55, said.
“You have to mediate between the two,” he said. “If we remove the foreigners, there’ll be a different impact on the economy and the jobless numbers will be higher.”
Foreign chambers of commerce including from the U.S. and Europe have warned that revisions to foreign labor policies could hurt the Asian city’s economy, which is forecast to expand 2 percent to 4 percent this year. Singapore’s jobless rate rose to 2.1 percent in the first quarter from 1.8 percent in the preceding three months.
Rule of Law
“Companies that require large amounts of labor force will, of course, redo their calculations,” Shanmugam said. Foreign investors recognize Singapore’s advantages including intellectual property protection, rule of law and high-quality labor and logistics, he said.
The city’s population has jumped by more than 1.2 million since 2004 to 5.4 million, driven by immigration. Thousands of Singaporeans protested a proposal to boost the population to 6.9 million by 2030.
The ruling People’s Action Party, as a left-of-center social democratic group, has to focus on social policies such as housing and education to address the effects and stresses of globalization, Shanmugam said.
“A significant portion of the population either feel stressed because of job security or feel stressed because of competition from foreigners, without being xenophobic,” Shanmugam said. “We have to admit that there’re legitimate stresses.”
A British wealth manager was forced to leave the city in January after mocking local residents who have to use public transport and a Philippine independence day celebration for the Filipino community in Singapore was canceled this week after protests by Singaporeans.
That was followed by a May 28 call by 12 civil society groups for a rejection of racism and xenophobia which they said had surged recently in Singapore.
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