Sat, Aug 25, 2001 page19

• Singapore cutsback on usingforeign workers

  • BLOOMBERG
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  Sukesh Ananth, a computer engineer who lost his job at Hewlett-Packard Co last month, has discovered that Singapore companies are turning away the skilled foreign workers they once courted.

  "I find it difficult to get a job because I have an Indian passport," the 26-year-old said. "Headhunters say companies prefer to hire Singaporeans, permanent residents and then foreigners, and they are not being discreet about it." Singapore's companies are idling machines and cutting staff as the country of 4 million slides deeper into recession, and foreigners, who make up almost a quarter of the population, are often the first to get the ax. "Singaporeans Only," say some newspaper ads for the few jobs available.

  That creates a dilemma for Prime Minister Goh Chok Tong, whose People's Action Party has ruled Singapore since independence in 1965.

  He doesn't want to alienate voters before an election that must be held by September 2002, nor can he afford to turn away the foreign engineers and scientists Singapore needs to stay competitive.

  "As our economy slows down and unemployment increases, some Singaporeans may again question the need for more global talent," Goh said in his National Day speech last Sunday. "This is a matter of life and death for us in the long term." Once a trading hub for the British Empire in East Asia, the resource-poor island has become a manufacturing powerhouse, last year exporting US$78 billion worth of semiconductors, disk drives and other goods. With per capita gross national product of about US$24,000, it's among the world's 25 richest nations.

  Singapore hires foreign workers because its small population lacks many of the skills the country needs. One quarter of Singaporeans have fewer than six years of education.

  Singapore's openness to foreigners helped bring in companies such as Royal Dutch/Shell Group, Royal Philips Electronics NV and American Express Co. Foreign companies make up 42 percent of the economy, though most of their workers are local.

  Scientists in lab coats aren't the only recruits. Singapore brought in executives to work at government-linked companies. Among them were John Olds, former chief executive of DBS Bank Ltd, and Flemming Jacobs, CEO of Neptune Orient Lines Ltd, for their management expertise. Locals joked that the shipping company's acronym, NOL, meant "No Orientals Left" In the past decade, Singapore's population grew 32 percent.

  Foreigners working in Singapore for at least one year accounted for half the increase. Last year, the number of foreigners rose 3.5 percent to 754,500, more than double the 1.3 percent increase in the population overall.

  Singapore's economic success has brought risks -- US business spending on equipment and software has declined for three quarters.

  As demand for electronics plunged, the economy shrank at an annual rate of more than 10 percent in the first six half of the year.

  To wean the island-nation from dependence on electronics, Singapore's leaders are using tax incentives and grants to nurture new industries such as biotechnology. That will require yet more foreign talent.

  With unemployment expected to rise to 4 percent at the end of the year from 2.6 percent at mid-year, some foreign job-seekers are getting the cold shoulder.

  "I'm sorry I can't help you if you're a foreigner," said Malvis Lee, answering the telephone at WMS Group, a recruitment firm.

  "Companies have become fussy," she later explains.

  The government predicts 20,000 people may lose their jobs this year, about double last year's number, as companies such as disk drive maker Maxtor Corp cut back. Almost half of the 3,250 people laid off in the first quarter of this year were white-collar workers.

  As the pain deepens, resentment of foreigners is growing.

  "Some companies think that by bringing in any white guys, they all of a sudden become international companies,'' said Abraham Thomas, a 33-year-old Singaporean who was laid off in May from Edge Matrix Pte, a local information technology company.

  Still, companies seeking to cut costs have an incentive to lay off foreigners, who often demand moving expenses, cars, and housing allowances.

  "Expats are expensive even if they do bring skills that are in short supply here," said Manu Bhaskaran, chief economist at SG Securities Pte.

  "With everything being pretty much equal, naturally it's locals I'll be looking at first," said Jack Ho, human resources manager at Fuji Xerox Asia Pacific Pte, who is screening 70 applications for five vacancies. Only 10 of the company's 450 staff are foreigners.

  The government has resisted calls from opposition members of parliament who say Singapore should require companies that lay off workers to start with the foreigners.

  "If in an economic downturn, we suddenly say, `Well, you are foreign, you go out first,' this will unravel a reputation that we have painstakingly built up over the years,'' Trade and Industry Minister George Yeo told Parliament.

  For some, Singapore's reputation is already tarnished.

  Kumar Muralidharan, an Indian computer engineer with five years' experience, came to look for a job as a telecommunications stock analyst after several university classmates found work here. After a fruitless, three-month search, he's going home.

  "Next time I try to get a job outside India, it won't be in Singapore."
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