[Singapore] Stricter criteria for Employment Pass might see S'pore 'lose its allure'

by Ryan Huang Wenwu
04:46 AM Aug 16, 2011


SINGAPORE - Plans to tighten the criteria for employment passes for foreigners could see Singapore lose some of its allure with multinationals and businesses, said economists yesterday.

In his National Day Rally speech on Sunday night, Prime Minister Lee Hsien Loong said applicants for employment passes would need to command a higher minimum pay and have higher academic qualifications. The move targets those in the mid-level range, which could mean the ranks of senior executives to managers.

Singapore International Chamber of Commerce CEO Phillip Overmyer said countries like Singapore, where firms set up their global headquarters, would require a wide range of people from all over the world.

He said: "As some of these people are going to be down a couple of tiers in the organisation, they don't meet the right criteria. This could create problems for companies using Singapore in this way," he said.

Association of Small and Medium-sized Enterprises (ASME) president Lawrence Leow said a tighter supply of labour would lead to higher costs, especially in the services industry. And with the upward pressure on wages comes inflation, he said.

CIMB Research regional economist Song Seng Wun added: "The chances are that for businesses, overall costs will likely rise, because they would have to raise wages to attract more residents to work in areas which they may not necessarily have worked before."

Over the long term, Singaporeans will benefit, according to some pundits.

DBS senior economist Irvin Seah said: "There could be some impact in the form of higher labour costs in the near term.

"But as the degree of tightening is unlikely to be drastic, the impact will be limited. But importantly, as the policy tightening is unlikely to be reversed in the near future, companies may be encouraged to hire locals instead. And this is particularly true in the mid-skilled labour category."


Via: http://www.todayonline.com/Business/EDC110816-0000301/Stricter-criteria-for-Employment-Pass-might-see-Spore-lose-its-allure