Minister Ong Ye Kung on FTAs, CECA and Making Globalisation Work for Us

By July 6, 2021Current

TL;DR –  Singapore needs to be connected to the world to survive. (A) Many jobs, strong competition, or (B) few jobs, no competition.

“For months now, the PSP has alleged that FTAs and CECA have led to the unfettered inflow of Indian Professionals, displacing Singaporeans from their jobs, and bringing about all kinds of social ills.  This is a seductively simplistic argument that workers facing challenges at their workplaces can identify with, and has stirred up a lot of emotions. CECA-themed websites have sprouted, filled with disturbing xenophobic views about Indian immigrants.” Minister Ong Ye Kung, Parliament Sitting on 6 July.

The concentration of certain nationalities in Singapore has indeed resulted in anxieties amongst some Singaporeans. It needs to be closely monitored and managed but there is no doubt that Singapore needs to ensure that we have the right talent to keep our economy growing. And the truth is, since CECA was signed, we have seen bilateral trade and investment figures increase significantly! And this has created numerous good jobs for Singaporeans.

Numbers don’t lie.

Between 2005 and 2019, bilateral trade in goods and services between Singapore and India increased by over 80%. Investment abroad into India has increased by nearly 50 times in the same period!

Minister Ong’s Statement in Addressing the Falsehoods Surrounding CECA

A bit of background on the lead-up to the debate today… During Parliament sitting in May, Law and Home Affairs Minister K. Shanmugam called out the xenophobic behaviour in recent months and invited the PSP to table a Motion on CECA.

Law and Home Affairs Minister K. Shanmugam

“I invite you to put up a motion to debate Ceca. You know that most of what is said about Ceca is false.” Law and Home Affairs Minister K. Shanmugam

 

Today, in Parliament, Minister Ong spoke about why FTAs – including Ceca – advance Singapore’s interest, the causes of Singaporeans’ concerns, and how to address them.

Here’s a summary:  

On Our Economic Survival and The Need To Stay Open To The World

From Day One, we know that Singapore is too small to survive independently, and we need to tap into global markets to survive. And look how far our Little Red Dot has come…

Employment stats

We’ve come a long way!

 

Around 50,000 international companies operate out of Singapore today. Minister Ong shared how none of these would have happened without a clear strategy, implemented well, to stay open to the world. He also acknowledged the quality of the Singaporean workforce – diligent, responsible and trustworthy. But the fact remains that there are too few of us.

It is in Singapore’s interest to pursue FTAs – a keystone of the economic super-structure we have built.

Our FTA strategy is one that is carefully thought through and executed. It has greatly boosted our efforts to create good jobs for Singaporeans. In case you didn’t know, our total trade in goods and services is three times our GDP. Since 2005, our total trade has nearly doubled from around S$890 billion to S$1.5 trillion.

Our FTAs also give our SMEs access to world markets. Yes, many might not know that our SMEs are sending all kinds of Singapore-made products overseas, including frozen roti prata to medical devices, and machines! FTAs also spur our companies to venture abroad. Our investments overseas increased nearly five times, from S$200 billion in 2005 to over S$930 billion in 2019.  When our companies grow overseas, they become stronger, and also employ more Singaporeans in Singapore.

“So when you attack FTAs and worse, if your attack succeeds, you are undermining the fundamentals of our existence, of the way we earn a living, of all the sectors FTAs support and the hundreds and thousands of Singaporean jobs created in these sectors.”

Specifically on CECA

Despite all the controversies surrounding it, this FTA with India benefits Singapore in many ways!

Signed in 2005, CECA gave Singapore a strategic first-mover advantage in India, just when it was taking off to be an economic powerhouse. CECA reduces tariff barriers. Partly because of that, bilateral trade in goods and services between Singapore and India has grown by over 80% from 2005 to 2019! In 2019, 660 companies from Singapore have investments in India, almost double the number (nearly 370) a decade ago. As these companies grow regionally, they hire more people back home too.  In 2019, 97,000 locals. 

In addressing the falsehoods on CECA … NOTHING in the agreement implies Singapore must unconditionally let in PMEs from India.

The PSP pointed out that CECA listed 127 categories of professionals, hence claimed that Indian nationals in these professions can all freely come to work here for one year. The truth? All foreign PMEs have to meet our work pass conditions in order to work here. 

Second, there have been complaints that intra-corporate transferees from India can also freely enter Singapore to work. This again is not true, Minister Ong clarified. Intra-corporate transferees also have to meet our work pass qualifying criteria.

We all know that unrestricted movement of people across borders would create social unrest – this is the case in every country. Minister Ong shared how Governments must retain the ability to impose immigration and border controls, and FTAs cannot undermine that. He emphasised that in all FTAs and WTO agreements, immigration powers are strongly and prominently preserved and protected. 

Minister Ong acknowledged that PMEs in Singapore do face challenges

Yes, there is more competition from foreign PMEs. 

The fact remains that there is more competition from foreign PMEs but Minister Ong highlighted that reducing the number of foreign PMEs does not automatically mean more jobs for locals.  By combining and complementing local and foreign expertise, we can attract more investments and create many more good job and career choices for Singaporeans.

The trade-off at play here:

(A) many jobs, strong competition, or (B) few jobs, no competition.

“We need to find the right balance where there are more jobs, some competition.” 

Foreign PMEs also help cushion the impact on the local workforce during a downturn. And the pandemic has proven this to be true! For the 12 months to April 2021, foreigners bore the brunt of job losses. During good times, they helped to grow the economy. When times are bad, they cushion the impact on our local workforce. Minister Ong also shared that the number of Employment Pass holders dropped by about 21,600, and S Pass holders fell by about 26,800. 

The Profile of Foreign PMEs

The profile of the foreign PMEs also posed a challenge for some locals. Minister Ong acknowledged that as our digital economy and our needs for tech talent grew, more PMEs from India came into Singapore.

The Government is taking this seriously and studying what they can do to lessen the problem. That is, without unintentionally cause the whole investment to move elsewhere.  A move that will surely hurt even more Singaporeans!

Unfair Hiring Practices

There may be unfair hiring practices at company level too, with department heads preferring to hire foreign PMEs, or even foreign PMEs from certain countries. MOM takes a strong stance against such discriminatory practices and together with tripartite partners, has been actively enforcing against errant employers. The Fair Retrenchment Framework was also announced by the National Trades Union Congress last year amid a wave of layoffs here.

Summing It All Up

While globalisation presents opportunities, it also brings about greater competition, the displacement of industries and jobs, and inflow of immigrants. In his speech, Minister Ong acknowledged these consequences often strike at the heart of a nation and a community’s sense of identity and security.

“The PAP Government will always fight for the welfare of Singaporeans. We have done so for more than 60 years now – kept our country safe, brought jobs to Singaporeans, built up our infrastructure, and taken care of the welfare of all.  We must not inadvertently shake the bedrock that has enabled Singapore to succeed.”

Well said, Minister Ong.

FTAs and CECA have been made political scapegoats by the PSP and many falsehoods have been repeated for far too long. The road to recovery is a long one, and there is much at stake for Singaporeans. Singapore simply cannot survive without being connected to the world.

Singapore Map

The road to recovery is long for our Little Red Dot. United we stand, divided we will fall.

 

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Gabrielle Teo

Author Gabrielle Teo

I read lots, and I also spend an indecent amount of time trying to get my mostly unpopular opinions published. Oh, I argue a lot with fellow Singaporeans who complain incessantly about Singapore too.

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