Of CECA, Free Trade Agreements and EP passes

By July 8, 2021Current

TL;DR –  Singapore needs to strike a balance between being open and having a level playing field for our locals with fair opportunities and fair treatment.

During the recent debate in Parliament on the Singapore-India Comprehensive Economic Cooperation Agreement (CECA) and Free Trade Agreements (FTAs), Minister Ong Ye Kung explained two key points.

  1. That CECA does not (he emphasised and highlighted) allow a free pass to any Indian nationals to take up citizenship or permanent residency. They have to meet the EP criteria, like the minimum salary threshold of $4500.
  2. CECA benefits Singaporeans as it results in more jobs.

As Minister Ong sums it up nicely: (A) Many jobs, strong competition; (B) few jobs, no competition. And we need to find the right balance where there are more jobs, some competition.

Employment Pass holders and S Pass holders have fallen

During COVID-19, for the 12 months to April 2021, the number of Employment Pass holders dropped by about 21,600 and S Pass holders fell by about 26,800.

On the other hand, local employment has been stable. Resident unemployment rate came down by 1% between September 2020 to May 2021 – from 4.8 per cent to 3.8 per cent. This can be attributed to the effect of the Jobs Support Scheme (JSS), which was doled out since the start of COVID-19 to help preserve Singaporean jobs. As a result, our foreign pool served as a buffer as they were the first to be let go.

Staying open globally while protecting the Singaporean core

There is more competition from foreign PMEs. Indeed, the number of EP holders has increased, from 65,000 in 2005 to 177,000 in 2020 – so an increase over 15 years of 112,000 or an annual growth rate of just under 7 per cent.

Credit: CNA

Hence, there is a need to balance staying open and protecting the Singaporean core.

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Recently in Parliament, Labour MP Patrick Tay spoke about this topic, his full speech can be read via his Facebook post.

He said,

“In other words, we will need to strike a balance between being open and having a level playing field for our locals with fair opportunities and fair treatment. This balance is not easy to achieve and is an evolving process.

Together with fellow Labour and PAP MPs, I have been speaking and lobbying on this important area in and outside this House the past decade to ensure fairness, equity and levelling the playing field especially for our Singaporean PMEs.”

Patrick has detailed a three-pronged approach to achieve this.

First, he proposes enhancing fair hiring practices by imposing stiffer penalties for errant companies with discriminatory hiring practices. This means more legal powers could be given to the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep), which manages the watch list of errant companies and works with companies to improve their HR practices.

Second, he proposes enhancing the EP application review process to move beyond looking at the individual applicant’s educational qualification and salary and pay close watch to sectors with a particular imbalance.

Lastly, he proposes for locals to have fair access to PME roles and progression opportunities. This can be done through structured and mandatory skills and knowledge transfer from foreign PMEs to our local PMEs. This will help to develop a pipeline of local talent. At the same time, Singapore needs to build and develop leadership in Singaporeans so that more can take up leadership roles in multinational companies.

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Towards a better future together

As Singapore and the world seeks to recover from COVID in the near future, it is imperative that we continue to have an open economy while creating good jobs for Singaporeans.


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