Free Trade Agreements and Foreign Manpower

1.02 pm

The Minister for Health (Mr Ong Ye Kung): Mr Speaker, Sir, the Minister for Health usually does not get involved in the debate on Free Trade Agreements (FTAs). But I am delivering this Ministerial Statement for two purposes.

First, even before the General Election last July, the Progress Singapore Party (PSP) has repeatedly alleged that the Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India allows professionals from India "a free hand" to come and work in Singapore. In his social media post on 22 June this year, Mr Leong Mun Wai again said, "the most important economic policies that have affected the jobs and livelihoods of Singaporeans relate to foreign professionals, managers, executives and technicians (PMETs) and free trade agreements, in particular CECA."

Mr Speaker, these statements are false. They have been repeated for too long.

I am a former trade negotiator at the Ministry of Trade and Industry (MTI) when I was a civil servant. We worked closely on several FTAs. I worked with a very dedicated team, who has over two decades fought hard for the interest of Singapore, to expand the economic and political space for our small island state. And I feel I owe a duty to correct the falsehoods.

Indeed, Singaporean PMEs, like PMEs in other advanced economies, are facing challenges. Many have given us their feedback and the Government has been taking steps to address their concerns. But our FTAs in general, and CECA in particular, are not the cause of the challenges our PMEs face. If anything, they are part of the solution. FTAs and CECA have been made political scapegoats to discredit the policy of the People's Action Party (PAP) Government.

The second reason to deliver this Ministerial Statement is to put in context, on behalf of the Ministry of Manpower (MOM) and MTI, the Parliamentary Questions that have been posed to the Ministries concerning foreign PMEs, FTAs and CECA. Dr Tan See Leng will further elaborate on the answers.

Taken together, Dr Tan and I will address Oral Question Nos 1 to 3 and Written Question Nos 19 to 24 from yesterday's Order Paper; and Oral Question Nos 1 to 6 and Written Question Nos 40 to 42 from today's Order Paper. A total of 18 questions.

Several of the questions were filed by the Progress Singapore Party's (PSP's) two Non-Constituency Members of Parliament to gather data for a subsequent debate on a Motion they intend to file. So, where we can, we will provide relevant data to equip all parties for that subsequent debate.

Let me first recapitulate how we got here. As I mentioned, 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 quite disturbing xenophobic views about Indian immigrants. Words gradually became deeds. Toxic views turned into verbal and physical assaults on Indians, including our citizens.

It is sad that serious issues concerning the economic well-being of our country and workers have descended to this. That is why the Minister for Law called out such xenophobic behaviour during the May Sitting of this House and challenged the PSP to table a Motion on CECA so that the matter could receive a proper public airing.

The PSP has since made a public statement on the matter, standing by its view on FTAs and CECA. It filed various Parliamentary Questions requesting for more data and information.

Today, I will talk about the following: one, what is fundamental to Singapore's ability to earn a living and survive; two, why FTAs, including CECA, advance our interest and are not the cause of the challenges faced by our workers; and three, what then are the causes of Singaporeans' concerns and how do we address them?

Dr Tan will provide detailed answers to the specific questions, including providing the data which will be useful for our subsequent debate and putting that data in context.

Let me start with the first question: what is fundamental to our economic survival? Simply put, we are too small to survive on our own and we need to tap into the global markets to earn a living and be self-reliant.

What do we have to start with? We have no natural resources but we have one precious natural endowment and that is our geographical location. It is a lasting advantage but one which requires us to work very hard to realise and to sustain. If we succeed, it helps compensate for our lack of size.

That is what we have done. By capturing the trade flows through the Straits of Malacca and Singapore, PSA became the largest container transshipment port in the world. It is a unique interchange in the world, connecting East and West, Europe, Middle East, India and China. The port is central to the growth of the maritime industry, responsible for 160,000 jobs in Singapore today.

In addition to our seaport, we have also grown into an aviation node. Before COVID-19 hit us, Changi Airport was one of the busiest airports in the world – and it shall be so again – though in aviation terms, our geographical location is not quite ideal. We made it happen with a renowned Changi and SIA experience. Before COVID-19 struck, the aviation-related industry was supporting 190,000 jobs.

With these good global connections to the world, we built up the manufacturing sector, about one-fifth of our GDP today. We obviously do not manufacture just for Singapore, we are too small. But we manufacture for the world. Manufacturing supports another 440,000 jobs today.

Our exports also include trade in services and one growing services sector is financial services. Today, almost every major global financial services institution is in Singapore, carrying out a range of activities including new ones such as fintech and green finance. The financial services sector employs over 170,000 people.

We are also becoming a centre for technology, research and development. Many global technology firms – from FAANG to BAT and many more – are in Singapore and they make Singapore their regional or global innovation centres or engineering hubs.

Today, around 50,000 international companies operate out of Singapore. Seven hundred and fifty of them have made Singapore their regional headquarters. None of this would have happened without a clear strategy, implemented well.

It was a long and painstaking process, part of the story of our island-nation. Clean government, rule of law, safety, you can walk on the street any time of the day, political stability, good infrastructure, high standards of education, openness to the world. All this and more come together and made us a good place to invest in and created many jobs.

I should emphasise that another big plus point for us is the quality of the Singaporean workforce. Our people are well known to be well educated, diligent, responsible, trustworthy and we get things done. We have one problem, which is that there are too few of us Singaporeans, a point which I will come back to later.

On top of all these plus points, we have built a network of 26 FTAs, including with US, China, EU, ASEAN, Japan, South Korea, India, Australia and New Zealand; all our major markets and they are all our FTA partners.

This brings me to the next topic: why FTAs, including CECA, are important to Singapore.

We started our FTA strategy in the late 1990s. We thought through it carefully and executed before other countries did. It gave us a very precious early mover advantage and greatly boosted our efforts to export, attract investments and venture overseas, and created good jobs for Singaporeans.

Our total trade is three times our gross domestic product (GDP). Since 2005, our total trade has nearly doubled from around S$890 billion to S$1.5 trillion.

Today, when the Economic Development Board (EDB) goes out and persuades investors to come to Singapore, our network of FTAs is always a major selling point.

FTAs are especially important to our small and medium enterprises (SMEs). They free them from being constrained by our small domestic market and give them access to global markets. Our SMEs are sending all kinds of Singapore-made products overseas: from canned food, barbecued pork, frozen roti prata – I heard some are exported to India – to medical devices, machines, components and chemicals.

FTAs are also spurring 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. They also employ more Singaporeans here.

If we accept this basic reality that Singapore needs the world to earn a living, then we would realise the fundamental importance of all our FTAs. They are a keystone of the economic super-structure that we have built. We could not have advanced the welfare of Singaporeans to the degree that we have without FTAs.

We cannot take all this for granted. Recently, we fell in the 2021 IMD World Competitiveness ranking from first place to fifth place. Amongst the components evaluated, we continue to do very well in terms of Government efficiency and economic competitiveness. However, we lost ground in terms of openness towards global talent and trade. But I hope this is temporary and due to the effects of COVID-19.

Overall, we are still holding our own in terms of foreign investments. In 2020, even as 45 companies ceased operating their regional or global headquarters in Singapore, over 130 companies set up such headquarters here.

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 of thousands of Singaporean jobs created in these sectors.

As the attacks on FTAs, especially CECA, have been very specific, let me now spend some time to explain how FTAs work. And to prepare for this statement, I had to dig up my old negotiating notes and do quite a bit of revision and homework!

Here it goes. The key disciplines of an FTA are as follows.

It requires a country to remove or lower tariffs on substantially all trade between the FTA partners. This is of tremendous benefit to Singapore. Very good deal. Why? Because other countries customarily impose tariffs on thousands of items. We are already very open. We impose duties on only three alcoholic products: beer, stout and samsu. In all my years of negotiating FTAs, I do not know what samsu is, neither have I drunk it before. But these are our three tariff items. Hence, any FTA that substantially removes tariffs imposed by both parties is inherently beneficial to Singapore.

FTAs also require governments to accord protection to foreign investments and ensure that regulations are imposed fairly and equally on both local and foreign firms. They also set standards on protection of intellectual property.

In Singapore, we always protect foreign investments and apply our regulations fairly. This makes us attractive to foreign investors. So, it has always been in our interest to do that. Abiding to these principles and disciplines is not a problem for us at all. In fact, as more of our companies expand overseas and they create their own products, they too hope that Singapore can negotiate similar protection for them when they go overseas. The investment and intellectual property protection disciplines in FTAs are, therefore, important assurances for our companies.

Newer FTAs also set certain environmental and labour standards. Not every country supports them, but Singapore believes that they reflect contemporary concerns relating to free trade and investments.

Specifically, on CECA, this FTA with India benefits Singapore in many ways. Signed in 2005, it was India’s first comprehensive bilateral FTA with any country. CECA gave Singapore a strategic first-mover advantage in India, just when the continental country was taking off to be an economic powerhouse.

CECA reduces tariff barriers, which made Singapore goods more competitive in the Indian market. Partly because of that, bilateral trade between Singapore and India has grown by over 80%, from S$20 billion when CECA came into force in 2005, to S$38 billion in 2019.

Similarly, Singapore’s direct investment abroad in India grew by nearly 50 times, from S$1.3 billion to S$61 billion during the same period. In 2019, 660 companies from Singapore have investments in India, almost double the number a decade ago. As these companies grow regionally, they hire more people back home. In 2019, they employed 97,000 locals.

Despite these significant benefits, FTAs are controversial in many countries. As a trade negotiator, I have listened to the problems and sensitivities of many of our FTA partners. What are these sensitivities?

Some countries wish to protect certain sectors, such as agriculture, that is a very common one, which Singapore does not do. We have some eggs, we have some fish but more for a bit of source diversification. We never seek to conquer the world with our eggs and our seabass. Others could not live up to, say, the transparency standards of government procurement or intellectual property disciplines. Still, others are concerned about the influences of foreign culture through industries, such as arts and entertainment. Canada, for example, is very sensitive about this area.

The toughest job and the most time-consuming job of a negotiator is to identify and understand the sensitive sectors, the sensitivities of your country and then find ways to protect or address them.

How do we do so? We find words that give you comfort that address these sensitivities and we call these words in our jargon "exceptions" or "carve-outs". When we have a big carve-out, with strong protection in our sensitive areas, we will say "this carve-out is strong and big enough for a jumbo jet to fly through!"

In some sensitive areas, it is easy to negotiate "exceptions" or "carve-outs", because everyone agrees. One example is right of taxation by governments; another one is national security; a third one is immigration.

Every country holds the view that there cannot be unfettered movement of people across borders. Every FTA partner believes that. That would create social unrest and a big public uproar. Governments must retain the ability to impose immigration and border controls, and FTAs cannot undermine that. Hence, in all FTAs and also WTO Agreement, you will find that immigration powers are strongly and prominently preserved and protected. You can find such standard clauses in the WTO Agreement, as well as in all our FTAs, including CECA.

As so many falsehoods have been said about the immigration-related parts of CECA, let me set out in some detail what is really in the agreement.

Immigration matters are set out in Chapter 9 of CECA, "Movement of Natural Persons". The legal text is available online, so I will only detail the salient points.

One, the chapter makes it clear that Government’s ability to regulate immigration and foreign manpower is not affected by the agreement. The Government retains full rights to decide who can enter the country to live, work, become PRs or become citizens.

This is clearly set out in two clauses. They are standard clauses commonly found in all FTAs. And they are also the second and third paragraphs of Chapter 9 of CECA, so it is hard to miss them, as you can see them on the first page. I will just read them out.

Clause 9.1.2: "This Chapter shall not apply to measures pertaining to citizenship, permanent residence or employment on a permanent basis."

Clause 9.1.3: "Nothing contained in this Chapter shall prevent a Party from applying measures to regulate the entry or temporary stay of natural persons of the other Party in its territory, including measures necessary to protect the integrity of its territory and to ensure the orderly movement of natural persons across its borders…"

That is the first point.

The second point: the obligations relating to the Movement of Natural Persons in CECA, as in all FTAs, are not broad principles with wide applications, but actually highly specific.

What are these broad principles that you can find in FTAs? One broad principle is that of National Treatment. It is found in some chapters of the FTAs, such as Trade in Services or Investments. This means, I mentioned this just now, you cannot discriminate against foreign service providers and investors. Whether they are local investors or foreign investors, you treat them the same. Regulations and benefits that apply to local firms must apply evenly to foreign-owned ones.

So, if immigration had not been carved out and the National Treatment principle had been incorporated into Chapter 9 of CECA, then indeed, Indian workers would have to be treated like Singaporeans, and would have had free rein to come to live and work in Singapore.

That is what the PSP claims. Except that there is a strong immigration carve-out and National Treatment is not found in Chapter 9 of CECA, nor any other corresponding Chapter in the FTAs that Singapore has entered into.

Mr Speaker, Sir, I emphasise and underline and highlight and bold, with bigger fonts, colour red, that nothing in this agreement implies Singapore must unconditionally let in PMEs from India. Contrary to PSP’s claim, our ability to impose requirements for immigration and work pass has never been in question in CECA or any other FTAs that we have signed.

Instead, what then are the obligations of Chapter 9 of CECA? They are highly specific such as require "the Parties to process applications for temporary entry with some expedition, and with certain transparency", such as informing the applicants of the outcomes of their applications and not leaving them in suspense, a very reasonable thing to do and to agree to adhere to.

We also have to accord a certain duration for the validity of the permits should we approve and approval must be based on them meeting our prevailing work pass conditions; also very reasonable. Such a commitment on duration is also not something unique to CECA, because similar commitments exist in other FTAs and are also found in World Trade Organization (WTO) Agreement, signed by 164 Members, including Singapore.

Many Parties to FTAs also commit not to impose labour market tests. This is a common clause in our FTAs, including with India, Australia, China and the United States (US). It means we do not insist that companies go through onerous processes and documentation to prove that no suitable locals will take a job, before they can hire a foreigner. Companies in Singapore or any other places do not hire in this way. What they do, the common and best practice, is to interview the suitable candidates, consider them all fairly and then make a judgement on the best person. These are all market-friendly, widely adopted, reasonable obligations.

Let me also specifically address two aspects of the Chapter on Movement of Natural Persons in CECA that has been singled out for criticism.

First, the PSP pointed out that CECA listed 127 categories of professionals, hence claimed that Indian nationals in these professions can all freely come here to work for a year. This is false because, as I explained earlier, all foreign PMEs have to meet our work pass conditions in order to come and work here.

What does the listing then show? The listing shows the types of Indian professionals who may apply to work in Singapore. It does not mean that we must approve their application. It is just that you can apply. India, for its own reasons, requested for such a list, similar to what they have in their FTAs with Korea and Japan. In fact, even if they had not listed the professions, their PMEs could still submit work pass applications to work here. The list probably meant something to India because there may be countries that would not even let you apply. That is how protectionist some countries may become and India is trying to secure their interests there.

This is, in fact, how other FTAs work: with or without listing of professions, nationals from our FTA partners are not precluded from submitting work pass applications, which will be evaluated based on our prevailing criteria and work pass conditions.

Thus, the point being made by PSP on the list of the 127 professions is a red herring. The list does not confer any free pass to any Indian national.

The second common criticism is that intra-corporate transferees from India can also freely enter Singapore to work. Based on my explanation on how the Chapter works, this is again not true. Intra-corporate transferees also have to meet our work pass qualifying criteria.

In any case, the total number of intra-corporate transferees from all over the world, and not just India, that have come to Singapore to work is very small. In 2020, there were only about 500 intra-corporate transferees from India in Singapore – less than 0.3% of all Employment Pass (EP) holders.

So, Mr Speaker, Sir, I hope we can put a stop to all this misinformation about our FTAs in general, and CECA, in particular.

Nevertheless, it is important that we recognise that PMEs in Singapore do face challenges. And I see at least three challenges that they are facing.

First, 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, an increase over 15 years of 112,000, or an annual growth rate of just under 7%. Over this period, however, the increase in the number of local PMEs is much higher, by over 380,000. So, 380,000 for local PMEs and 112,000 for EP holders.

These numbers underline an important point: that competition between foreign and local PMEs is not a zero-sum game. In fact, the converse is often true. By combining and complementing local and foreign expertise, we can attract more investments and create many more good jobs and career choices for Singaporeans.

The downside is that, with more foreign PMEs in Singapore, they can compete for jobs with locals at the company level and, at that level, there can be a zero-sum situation.

So, there is a trade-off at play here. If I can put it simply: (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. That is the way to advance the interest of Singaporeans; not swing to any extreme position, but strike that careful balance and then adjust if we find that that balance is off. But if someone promises you many more jobs with no competition from foreigners, he is selling you snake oil. It is not possible. It cannot be on any government’s policy menu.

I should point out that besides complementing our local workforce to create more opportunities, foreign PMEs also help cushion the impact on the local workforce when times are bad. Because during a downturn, foreigners bear the brunt of job losses. 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. Altogether, about 50,000 over the 12 months.

On the other hand, local employment has been stable. The unemployment rate for local PMEs in June 2020 was at 2.9%. This is from the labour market survey, so, it comes out only once a year during June and this is immediately after the circuit breaker. Resident unemployment rate in September 2020 was 4.8%; in May 2021, 3.8%. It came down by one percentage point. Without the foreign buffer, when our economy ran into trouble, the situation would have been much worse. Singaporeans would have lost many more jobs.

So, while the stock of EP and S Pass holders can fluctuate, Singaporeans enjoy greater security of employment, with help from various Government measures. The Jobs Support Scheme helped firms, helped enterprises keep their workers. We have a multi-Ministry National Jobs Council which came up with many initiatives to help place displaced Singaporeans into jobs, including the Jobs Growth Incentive, to encourage companies to hire local workers.

So, when Mr Leong Mun Wai said in his Facebook post that we need to recoup a few tens of thousands of jobs from foreign work pass holders, he may not know that we have already done so. This always happens in a downturn.

The second challenge is the profile of foreign PMEs. They are concentrated in certain sectors and from certain countries of origin. Indeed, as our digital economy and our needs for tech talent grew, more PMEs from India came into Singapore through our EP framework. And when that concentration happens in areas, such as Changi Business Park, some may feel that we have lost a part of Singapore. Members of the House have raised this concern. We are taking this seriously and studying what we can do to lessen the problem.

I hasten to add that dealing with excessive concentration is not a straightforward matter of chopping up the operations of a company here. We do not want to unintentionally cause the whole investment to move elsewhere. This will hurt even more Singaporeans. And this is part of the careful balancing that I talked about earlier.

Third, at the company level, there may be unfair hiring practices, with department heads preferring to hire foreign PMEs, or even foreign PMEs from certain countries. This is not right. Whatever system we set up, there will always be some abuses. We must tackle the abuses when they occur as swiftly as possible, while continuing to adopt sensible economic policies that are good for Singapore and Singaporeans.

MOM takes a strong stance against such discriminatory practices and, together with our tripartite partners, has been actively enforcing against errant employers. The Minister for Manpower will speak on this further.

I have explained the underlying reasons for the difficulties faced by our PMEs, so that we know what it means for us in terms of public policy choices and how we can most effectively address the challenges. If we mistakenly blame FTAs and CECA for these problems, our responses would be disastrously wrong and would make our problems worse.

Mr Speaker, let me say something in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] The Government deeply understands the pressures faced by local PMEs in the workplace. These include concerns about being displaced by foreign PMEs. Some companies have employed more foreigners and this has made Singaporean employees uncomfortable.

The Government has received feedback from many members of the public and Members of Parliament on these issues. We take these concerns seriously and have already taken action to address them. For example, we have raised the salary bar for foreign PMEs to tighten the inflow of foreigners. We have also stepped up enforcement, investigation and punishment against employers who discriminate against locals.

In order to prescribe the right solution, we have to first identify the root cause of the problem. However, over the past year, before identifying the truth of the matter, the Progress Singapore Party (PSP) has laid the blame squarely on the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) as the main culprit for the unfettered inflow of Indian professionals, displacing Singaporeans from their jobs. PSP also claimed that all the FTAs that we have signed have harmed Singapore's economy and the interests of Singaporeans.

They have unfortunately turned FTAs into political scapegoats to discredit the policies of the Government. Their claims are incorrect and have distorted the facts. If anti-foreigner sentiments creep into Singaporeans’ psyche, the livelihoods of Singaporeans, the prosperity of the nation and the happiness of our next generation will be at risk.

Before joining politics, I was a civil servant and participated in negotiating FTAs. Therefore, I have the responsibility to correct all these baseless allegations. I would like to clarify four points.

First, what is the pillar of Singapore's economy? We are a small country lacking in natural resources. The key to our economic success lies in whether we have a global view and whether we can leverage globalisation to attract foreign investments and expand into international markets to make up for our lack of natural resources and our small size. Only by doing so can our people live in peace and happiness, and can young Singaporeans pursue their dreams.

Second, what is the intent of signing FTAs with various countries? Through negotiations, we are able to get tariff exemptions from our partner countries. This will help promote our exports and is especially important to our SMEs because the domestic market is too small. FTAs will help our SMEs venture into international markets and grow stronger.

We have signed 26 FTAs with various countries in the world. These include ASEAN, China, the US, the European Union, Japan, Korea, India, Australia and New Zealand. These are our major markets and also our important free trade partners.

FTAs also help us to attract businesses and investors. EDB often says that our FTA network is a major selling point to persuade MNCs when they decide whether to invest in Singapore. When investors come to Singapore, our FTAs can help them enter various major markets in the world. Also, under the FTA provisions, the Singapore Government has obligations to provide some protection to their investments.

Third, why is PSP’s claim incorrect? That is because they have distorted the intent of the FTAs and our FTA negotiation team. They have wronged us. They said that CECA has allowed 127 categories of professionals from India to enter, live and work in Singapore freely. This claim is ridiculous.

The listing of 127 professions serves as a point of reference for relevant parties. Professionals working in these categories can apply to work in Singapore but it does not mean that the applications will be automatically approved. These are two different things. Ultimately, the applicant must still meet the qualifying criteria for work passes in Singapore; only then can they get an Employment Pass to work here.

In all our FTAs, our immigration and foreign talent policies remain unchanged. We retain full rights to decide who can enter the country to live, work, become PRs or become citizens.

Fourth, where do the pressures that Singaporean PMEs face come from? Simply put, globalisation brings about greater competition. On one hand, we must remain open to create opportunities for our people. On the other hand, we must manage the competition it brings for our industries and people.

However, competition between foreign and local PMEs is not a zero-sum game. A reduction in the number of foreign PMEs in Singapore does not necessarily translate into more jobs for our local people. Instead, only by combining local and foreign expertise, can we attract more foreign investments and create more good job opportunities.

As a small country that relies on the global economy, we face the following choices. Option A, strong competition but many jobs; or option B, less competition but few jobs. We want to avoid both extremes. What we need is to strike a balance. We cannot over-compensate in any direction. To ensure that our people continue to have enough good jobs, some competition is unavoidable.

If someone claims that he can give you an economic model that creates many jobs but no competition, he is definitely bragging and selling you snake oil.

Another challenge that we face is that we are now growing our digital economy and our need for tech talent has grown. Today, China and India are two of the largest global suppliers of tech talent. Many Chinese talent tend to work in China because they have many unicorn enterprises and significant domestic demand. India’s talent have continued to look outwards. Therefore, there are relatively more Indian digital and tech talent in Singapore. This is a phenomenon that we have to face. The Government is working together with industry players to explore adopting offshore outsourcing solutions. However, this must be done carefully to avoid losing important foreign investments altogether.

We must continue to discuss how to solve the problem, safeguard job opportunities and provide a level playing field for Singaporeans. Please do not listen to misinformation and reject FTAs and CECA. These will erode the foundation of Singapore’s open economy.

We note that many countries in the world are now facing the issue of xenophobia. We must not let this take root in Singapore. We have to try our best to address the concerns of our people and resolve these problems for Singaporeans. The Government is determined to do that. However, we need the cooperation of Singaporeans to defend the foundation of our prosperity together.

(In English): I will switch back to English to conclude my speech. As I explained earlier, our FTA strategy has benefited Singaporeans and Singapore. So, it is disappointing that FTAs are now a target of political attacks. But, perhaps, I should not be surprised, as this has happened in many countries.

Such debate goes beyond FTAs. The question of global versus local has emerged as the new dominant political divide in democracies around the world.

In the US, labour unions and various industry lobbies are against free trade. The Trump Administration pulled out of the Trans-Pacific Partnership (TPP) within a week of taking office, even though the US was the architect of the TPP agreement.

In the UK, Brexit was the culmination of a bitter political contest between those who wanted to be part of the European Union and those who wanted out.

In France, the next Presidential election is likely to be a face-off between the incumbent President Macron and the far-right nationalist candidate.

These political divides arose because of globalisation. While globalisation presents opportunities and creates jobs, it also brings about greater competition, the displacement of industries and jobs, and inflow of immigrants.

These consequences go beyond the economic sphere and often strike at the heart of a nation and a community's sense of identity and security. This is the most unsettling change, causing people to become unsure if they are on the whole better off with globalisation.

Such concerns are genuine and deserve serious and proper attention. We are a small country and an unrestricted flow of workers from a large country can change the lived experience of Singaporeans, alter the character of our society and even overwhelm us. But we need to be careful that these valid concerns are not exploited by political groups and, intentionally or not, end up sowing division, stoking fear and fanning hatred.

As representatives of the people, we all have a responsibility to realise that our words and deeds can shape public opinion and the direction of our political discourse.

That is why when Mr Leong Mun Wai said in this House, some months ago, that the naturalised Singaporean CEO of DBS was not "homegrown" and deemed this a failure, Minister Iswaran responded with a word of caution. I agree with Minister Iswaran and feel that Members of the House should be very careful about what we say on such matters, if we are not to give credence to very negative, even ugly, minority views. That is also why we appreciate the Leader of the Opposition standing up to say that when it comes to racism and xenophobia, we have to all reject them and there can be no "ifs and buts" about it.

Mr Speaker, Sir, before I conclude, let me remind Members that the House has invoked Standing Order No 44, so that the Members from PSP can give a full response after Dr Tan See Leng's speech. But even if Mr Leong Mun Wai and Ms Hazel Poa choose not to, I will be happy to clarify questions from Members.

The People's Action Party (PAP) 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. As a city state connected to the world, we want to welcome diverse talent from all over the world. When they are here, we invite them to fit into our society, respect our social habits and norms, and appreciate our multi-cultural society, join us at the hawker centres, try durians, try some sambal belacan, speak a few phrases of Singlish.

When Singaporeans go overseas to live and work – and about 200,000 of us do – we expect the same of ourselves and hope that we also receive hospitable welcomes from our foreign hosts.

I decided to make this Statement today, so that we can approach the debate on PSP's subsequent Motion with the right perspective and motivation. This House should continue to debate robustly the pros and cons of various policies to help Singapore navigate the balance between global and local.

But we must not inadvertently shake the bedrock that has enabled Singapore to succeed. We cannot survive, we cannot earn a living without being connected to the world, without being welcoming to the world, without the House unanimously supporting our FTA strategy. And we must always be a big-hearted people, even while we grapple with the significant challenges of globalisation to forge the best path forward for Singapore. [Applause.]

Mr Speaker: The Minister for Manpower will be making a related Ministerial Statement. Members will be able to seek clarifications on both Statements during the Debate after this Statement. Minister for Manpower.

1.55 pm

The Minister for Manpower (Dr Tan See Leng): Mr Speaker, in his Statement, Minister Ong has explained why FTAs are critical to Singapore, as well as how they have helped us reap significant benefits for our fellow Singaporeans.

The same goes for our openness to foreign workers. We take the same approach when we decide on foreign workers coming to work in Singapore: how does it help Singaporeans?

At the start of the 1970s, our GDP was S$20 billion. Now, the economy has grown to S$454 billion. Foreign workers account for around one-third of our workforce. There are more than 2.3 million locals who are employed and our resident unemployment rate is 4.1%, half of what it was in 1970.

We need to understand the real challenges we are facing today in order to have a constructive debate on the way forward. And that is why we are having these two Ministerial Statements.

I will explain with data, with details, as to exactly how our foreign workforce policies are implemented in order to benefit our fellow Singaporeans. I will also give our perspective on the real challenges we face today and the real solutions that are demanded.

Assoc Prof Jamus Lim and Mr Leong asked for the number of intra-corporate transferees or ICTs, professionals and dependants that come in through CECA. Let me reiterate a point Minister Ong has made, and that is none of our FTAs, including CECA, gives intra-corporate transferees, or ICTs, unfettered access to our labour market. So, please remember that. They all have to meet MOM's prevailing work pass criteria.

Under the ICT route, the employer does not have to advertise on MyCareersFuture.sg, but the ICTs themselves are subject to additional checks on their seniority, on their employment history as well as their work and industry experience.

They are also subject to more conditions in their eligibility to bring in dependants and apply for permanent residency or future employment in Singapore. And if they have brought in dependants, the dependants do not have the automatic right to work here. They can only do so if they qualify for a work pass on their own merits. This is a very fundamental point and I hope that everyone will remember this.

Thus, and as mentioned by Minister Ong, the total number of ICTs has consistently been very small. In 2020, there were only about 4,200 ICTs. Of these, about 500 were from India. That is 500 out of 177,000 Employment Pass (EP) holders in Singapore.

As for the number of "professional visas" issued, I am afraid to disappoint Mr Leong, there is no such category within MOM. As Minister Ong explained, all 127 categories of professionals under CECA currently come in under our regular work pass framework.

The PSP has made Indian nationals coming in through CECA a focus of contention. But I am afraid they have been barking up the wrong tree. The number of ICTs coming in under our FTAs, and in particular CECA, is a very small number relative to our total number of EPs. I suggest we set aside this red herring and move on, more importantly, to the heart of the matter.

The heart of the matter is this: how do we, as a small country devoid of any natural resources, remain open to global talent for us to continue to create opportunities for our fellow Singaporeans while, at the same time, manage the attendant social repercussions?

Singaporeans are pragmatic. They understand we need to remain open to global talent. However, they also face real challenges. In particular, they are worried about three things: first, that the growth in EP holders has come at the expense of our local PMEs; second, that some workplaces have become more concentrated with a single nationality; and third, that there may be discrimination against local jobseekers and employees.

I have come from the private sector, and I understand and empathise with these fears, these concerns and these anxieties. I would like to address each of them in turn, because I want to lay out the facts and also share our approach in dealing with each one of them.

I am not suggesting that all of our approaches are perfect. Obviously, we are always a work-in-progress. But we will continue to refine them in the light of our experiences, always with a focused view to having a system that will and can deliver good jobs, good livelihoods and a thriving economy for Singaporeans. Not just for our generation but for our future generations.

I hope this will enable us to arrive at a better understanding of the choices and the trade-offs that we constantly have to make.

First, on the increased competition from foreign PMEs. In Singapore today, we have one of the best local talent pools in the world. But it is insufficient to meet the breadth, the depth, the needs of investments that generate the quality and the range of jobs that we have today. So, when we bring in new investments, we will sometimes need to attract foreign expertise, foreign talent, while we build up our local capabilities. Ms Hazel Poa, Assoc Prof Jamus Lim and Mr Saktiandi Supaat asked for the breakdown of local and foreign workforce numbers by sector. Given the issue at hand, let me focus on EPs.

As of 2020, we have around 177,000 EPs, or Employment Pass holders, in our overall workforce. Manufacturing and construction account for about one-tenth. The rest are in the services sector. If you look at the top three subsectors: infocomm and professional services, these two sectors account for around one-fifth each; while finance accounts for another one-seventh.

If you look at the change from 2005, I think that was around the time when CECA was signed, to 2020, the total number of EPs has increased by around 112,000. This was also mentioned in Minister Ong's speech earlier on. Over this period, the total number of local PMEs increased significantly by more than 380,000.

There have been questions asked, both inside and outside of this House, whether most of the growth in local PME jobs was accounted for by Singapore Citizens.

If you look at our unemployment statistics, we provide the figure for Singapore Citizens. The citizen unemployment rate over the past 10 years has been consistently low, at around 3%. Hence, the answer must be a yes.

For those of you who have asked how much of this local PME job growth has gone to born and bred Singaporeans, notwithstanding the divisive intent of this kind of questioning, let me state simply that the majority of this growth over the past decade went to Singaporeans born in Singapore. And as we have also shared in response to a written Parliamentary Question yesterday, 87% of Singapore Citizens were born here.

Much attention has been placed on the finance and the infocomm sectors, which alone accounted for 40% of the increase in EP holders. This is significant but what is even more significant is that these two sectors saw even stronger job creation for local PMEs. In infocomm, the number of EPs increased by around 25,000. The number of jobs created in this sector alone for local PMEs was greater, at 35,000.

In finance, the number of EPs increased by around 20,000, but the number of jobs created for local PMEs was even greater, at around 85,000. This is more than four times.

We focus on these two sectors because they bring good quality jobs and Singapore, our beloved Singapore, can carve out an advantage and value-add significantly in these areas. And as a result, there has been significant job creation.

As we attract foreign banks, infocomm companies to create jobs here, they will inevitably need foreign workers to complement the Singaporean workforce.

I want to deal with a fundamental misconception which lies at the heart of some of the things being misconstrued.

When a company decides to come into Singapore to invest and they need about 3,000 people, they may be able to find about 2,500 of these talents in Singapore. But they still need to supplement the 2,500 with the other additional 500 from overseas. If we object and we insisted that the balance of their 500 must all come from Singapore irrespective, then how do we expect that investment to take off? How do you expect an investment to come in? These 2,500 jobs for the locals would be compromised greatly.

The simple point is that while we have a good Singaporean talent pool, our pool is not large enough to fulfil all of the needs, the breadth and the depth of these enterprises. Very often, foreigners also bring in skills which complement Singaporeans' skillsets as well.

The misconception is that if we said no to the foreigners coming in, these jobs they would have taken would, therefore, all go to Singaporeans. How can this be possible? This is a misconception. How do I know that this is a misconception? Because today, even as we speak, we still have 22,000 PME jobs that are not filled. Companies are desperate to fill these jobs. They would love to take in Singaporeans if they could, because they would be more productive. But these jobs up till now are still not filled. Perhaps Mr Leong would like to think deeply about that and deliberate and offer us some advice.

Mr Leong also suggests that doing away with foreigners will reduce the displacement of our older PMEs. I wish that were so, but the private sector and the real economy do not operate this way. There will always be displacement of PMEs, whether older or younger in any economy. Why? Because the business world is never static. Industries change, companies downsize, they expand, they relocate, they pivot, they transform.

Regardless of whether you have foreigners or not, that would not change because this is the function of the business world. What matters most for us is whether we are able to find jobs for these displaced PMEs. To do this, we need an eco-system where there are also new companies willing to come and start up in Singapore, new investments, new foreign direct investments coming in and expanding multinational corporations.

So far, I think we have done credibly in this regard. New jobs created have far exceeded the jobs that have been lost and our unemployment rate has been kept low. And the re-entry rates for displaced PMEs are high.

That said, it is not always easy or possible to find every single displaced PME an equivalent job in the same industry, especially if there is a skills mismatch. An IT sales manager who loses his job may not find a job as a cybersecurity expert. But we do our best to help them find jobs in other growth sectors.

If we tell companies which want to invest in Singapore that they can only employ Singaporeans, or first employ Singaporeans who have been displaced regardless of skills, I think the answer will be quite stark. They, I think, will opt not to come into Singapore to invest.

All companies will want to hire Singaporeans, but companies will also need to have that flexibility to hire the best available talent from around the world to complement our Singaporean workforce.

I understand. I understand what displaced Singaporeans are going through. Rest assured, we are doing our best to help you and your families. But it is important that we go to the root cause of the problem, that we are able to tackle it and we are able to diagnose the situation accurately, and not provide treatment to just treat and relieve the symptoms. Because only when we can identify the right solution, we are able to prescribe, we are able to provide the precise and the appropriate treatment.

The fundamental question now is, how do we strike a balance between ensuring that businesses have access to skillsets, to manpower, to grow and succeed, whilst creating opportunities for our local workers to grow and to progress?

Our strategy to achieve this has always been two-pronged: ensuring that our workers can compete fairly and can compete strongly. So, the first is to ensure that our local workers can compete fairly. We do this through our work pass controls. Our view, our prevalent view, is that foreign manpower should not come to Singapore just because they are cheaper to hire than locals. They should complement but not displace our local workforce. They should bring in extra skills to help the companies and, at the same time, create more Singaporean jobs.

In line with these objectives, at the Work Permit and the S Pass level, we have quotas. And we have levies in place to regulate foreign worker numbers. We have been progressively tightening quotas, we have been progressively raising levies to reduce manpower reliance, spur job redesign, push for quality growth. Over the past decade, we have consistently and steadfastly held our course in spite of numerous calls from businesses to relax our rules.

We commit to productivity-led growth because we believe many of these jobs have the potential to be transformed into good jobs that provide higher real wages and rewarding careers for Singaporeans. For EPs, we do not impose quotas or levies because there is fierce competition for global talent and worldwide shortages in areas such as tech and digital skills. A quota would be a hard cap that would limit our ability to compete at the high end of the global economy, while for a levy to have any impact or any effect at all on EP numbers, it would have to be set very high and would substantially increase business costs.

Instead, what we have done is that we have focused on setting and raising the quality bar for EP holders through requirements on salary and qualifications to make sure that the EPs who come in are at the right level and they bring the right skillsets, the necessary expertise and experience to contribute significantly to our economy.

Last year, we raised the EP minimum qualifying salary in two steps, from $3,600 to $3,900; and then, we raised it again to $4,500. The salary requirement increases with age, it is also on a graduated scale, which reflects the candidate's experience, his length of time in the workforce, in order to provide sufficient protection for our mature workers.

We also introduced a higher bar of $5,000 for applicants in the finance sector to take into account the higher wage norms in that sector.

We will continue to review and revise these thresholds regularly to ensure that they remain appropriate and they remain in tandem as our economy develops, as our skills, as our income levels, go up.

Mr Leong has also previously raised in this House his concern that foreign Employment Pass (EP) holders are cheaper to hire than locals, simply because their employers do not make CPF contributions.

I think he fundamentally misunderstands the purpose of our CPF. CPF is set aside for our retirement needs. It can also be used for housing. As foreign PMEs who are not working in Singapore on a permanent basis, I do not think we should be responsible for their retirement adequacy or home ownership needs. Hence, I do not think it makes sense for us to extend our CPF benefits and coverage to them.

Fundamentally, our CPF system is designed to benefit our resident workers, not to help attract or deter foreigners. Instead, when reviewing the qualifying salary to maintain a level playing field, we take into account CPF contributions as part of the cost to employers. That is packaged into the cost to employers.

Mr Leong did not suggest that employers should pay foreigners CPF too. I think he realises this. Instead, he says he wants to impose a $1,200 levy on EP holders. But as I have just explained, a levy is not the most effective or the right way to manage the population of foreign PMEs. I think that it would be better managed by appropriately setting the right salary level for entry into Singapore.

Ms Hazel Poa has asked for numbers on dependants in Singapore. This is relevant insofar as they are competing with locals for jobs.

As shared previously, the vast majority of Dependant's Pass (DP) holders do not work during their stay in Singapore. The number of DP holders who have sought employment in Singapore via a Letter of Consent (LOC) – for DP holders, up to May, if they wanted to work, they needed to get an LOC – this number constitutes only about 1% of all work pass holders.

In fact, Members would remember we have already regularised the work arrangements of DP holders in May this year. From May this year, DP holders who wish to work in Singapore can no longer obtain an LOC. Instead, they will have to qualify for a relevant work pass on their own merit. So, they go through the normal work pass routes.

There will always be calls from workers to tighten our foreign workforce policies further, just as there will always be calls from businesses to relax them. I can tell you that in my past life, I was also guilty of that. I have also lobbied to relax work pass policies; that was a function of a listed company. It is the tightrope that MOM and MTI have to constantly navigate very delicately amidst highly competitive global markets for both investments and talent.

Ladies and gentlemen, there are limits as to how far we can tighten our controls without eventually hurting Singaporeans.

With remote working becoming more prevalent, companies increasingly do not need to site their manpower in Singapore. In fact, we may find more businesses simply choosing to move entire business functions offshore if it becomes too difficult, onerous or expensive to operate here. Singaporeans will end up with the shorter end of the stick as well by losing some jobs too.

This is precisely why the second prong of our approach – that of ensuring that our Singaporeans can compete strongly – is just as important.

In an open and globalised labour market like ours, competition is intense and stiff. There will be some of our fellow Singaporeans who are displaced from their jobs and we need to help them find replacement jobs. This happens not just because of competition from foreign workers but because of other factors like technological change and industries phasing out.

This is why the Government invests so heavily in retraining and skills development so that displaced workers can gain new skills and reinvent themselves either by doing a different job in the same industry or transiting to another industry altogether. In fact, for some industries, as they get sunsetted, we have to help workers to pivot and transform even faster. That is really the subject of the 23 Industry Transformation Maps that we have set up over the last couple of years.

As Mr Lim Swee Say used to say, in Singapore, we are unable to guarantee your employment but rest assured, we will work very, very, very hard to ensure your employability. Upgrading skills and staying relevant is, ultimately, our workers' best form of protection.

We do this through our system of education, through training and that goes beyond formal schooling. We do this via SkillsFuture. We also help displaced Singaporeans through job facilitation and support.

COVID-19 has been an especially difficult time for many Singaporeans. Therefore, we have stepped up support.

As announced at Budget this year, we have extended the SGUnited Jobs and Skills (SGUJS) Package. MOF has set aside an additional $5.4 billion to support the hiring of 200,000 locals through the Jobs Growth Incentive (JGI) and provided 35,000 traineeships, attachments and training opportunities just this year alone. These programmes are in addition to long-standing programmes such as Workforce Singapore (WSG)'s career conversion programmes.

To make our career matching services even more accessible to locals, WSG has set up in all 24 HDB towns SGUnited Jobs and Skills (SGUJS) Centres. The retrenchment taskforce led by WSG and supported by NTUC's Employment and Employability Institute (e2i) reached out to nearly all retrenched local workers in 2020. Of those who took up the taskforce's employment facilitation assistance, you will be happy to note that more than two-thirds of them have found jobs within six months.

Ms Mariam Jaafar asked about the effectiveness of the different capability development schemes in building a local talent pipeline. As of end April 2021, more than 110,000 locals have been placed into jobs and skills opportunities as a result of the SGUJS Package. Within the first three months of implementation, the Jobs Growth Incentive supported 27,000 employers who hired 130,000 new locals.

With the support of employers and the unions, the policies that we have put up have preserved jobs for Singaporeans amidst the crisis of our generation. The numbers speak for themselves. Total employment in 2020, excluding migrant domestic workers, shrank by 166,600. Foreign employment took the most hit, shrinking by 181,500. Resident employment, on the other hand, managed to expand by 14,900 in spite of the downturn.

We are not quite out of the woods yet and there is more work yet to be done but, ladies and gentlemen, let us also build on what we have collectively achieved so far.

A second part on safeguarding diversity. I want to talk about nationality concentration amongst foreign PMEs. Mr Leong and Ms Poa have asked for the nationality profile of our work pass holders and their dependants from China, from India, from the US and from Australia. Ms Poa has asked for even more granular data on the sector and jobs commonly held by these same nationalities.

Mr Speaker, Sir, for foreign policy reasons, we do not publish detailed statistics on our foreign workforce, especially by nationality. I am not aware of any country that reports at that level of granularity requested. Nevertheless, we recognise that if misconceptions continue to spread, in spite of all of our attempts to address them in many other ways, even more damage will be done. So, I will share some numbers to address the misconceptions and allow for a meaningful engagement on the issue at hand.

The top nationalities that comprise around two-thirds of our EP holders have been consistent since 2005, namely, China, India, Japan, Malaysia, the Philippines and the UK.

I believe the interest is really in the Indian EP holders. The proportion of EP holders from India has increased from about one-seventh in 2005 to about a quarter in 2020. In comparison, the proportion of EP holders from China has remained relatively stable across this same time period.

Is this the result of more favourable treatment for Indian EP holders due to the CECA? The answer is no. As I have shared earlier, all work pass holders in Singapore have to meet the same criteria before they are allowed to enter our labour market. There is no differentiation based on nationality. Rather, these numbers reflect trends in the global demand and supply of tech talent.

The larger increase in Indian EP holders compared to other nationalities is driven by the result of rapid growth and choices of growing our digital economy and finance. As every sector seeks to be digitally enabled, their need for tech talent has grown significantly. We do not have enough locals to fill the jobs available. In the infocomm sector alone today, 6,000 jobs currently remain unfilled.

Companies can decide which overseas countries they want to bring in their manpower from. Based on their needs and the availability of the required talent, China and India, over the last decade or so, are two of the largest suppliers of tech talent.

But you would have read that China has sprouted so many unicorns and the Chinese companies themselves have a huge demand of their own. So, many Chinese talent decide to stay in China to work. I can tell you that these are the numbers that we are seeing across the construction industry amongst the migrant workers as well. I think prior to my coming onboard as the Minister for Manpower, many Members here would know that I deal with the dormitories most of the time. I can share with you the same statistics.

India's talent, on the other hand, have continued to look outwards. They also have the advantage of being English speaking. This phenomenon is not unique to Singapore. It is global.

Currently, India is the largest country of origin for international migrants; this is in the United Nations Department of Economic and Social Affairs (UN DESA) Report published in January 2021. In 2020 alone, it accounted for 18 million international migrants, up by 10 million from 2000. India has grown to become the second largest source of immigrants in the US and the third largest in the UK. These two countries are also heavily invested in developing their technological capabilities.

Our companies, our industries, our enterprises, they are both creators of technology and also adopters of the talent that is needed to create these technologies. Given our relative shortage of manpower, even if the workers do not come from India, they will come from somewhere else.

I hope that Mr Leong is not objecting to Indians per se. The point I think we should ask ourselves is this: are they helping our companies? Are they helping our enterprises? Are they helping us to grow our economy and create better Singaporean jobs? The answer is yes.

It is not surprising, however, that this increasing concentration has caused some social frictions and anxiety to Singaporeans. In some ways, this is understandable and to some, we may even say that it is expected because these EP holders are transient. They work in Singapore for a number of years and they contribute to our economic growth. Apart from some EP holders who settle down and become PRs or Singapore Citizens, most of them, most EP holders work here for a few years and they either return home or they move on elsewhere.

So, it is to be expected that they are different and we do feel that they are different. And this is the challenge of living in our multi-cultural society and a globalised world, as Minister Lawrence Wong spoke about recently.

This is something that we will have to, and have been, proactively and constantly monitoring and managing. Indeed, when a single nationality becomes too prominent and that can have a disproportionate impact on our existing culture, our beliefs, it can cause our fellow Singaporeans, ourselves included, to feel less at home in our workplaces and in our neighbourhoods. In the early 2000s, we experienced a similar situation when the share of PRCs in our foreign workforce increased significantly, before tapering as China’s growth took off. Both then and now, the larger numbers did not go unnoticed and they created frictions within our communities.

We understand these concerns, which is why we review and update our work pass policies regularly. We always seek to balance the needs of our economy with the needs of our society. We have to bring in the talent and the skills to keep our economy growing, while tracking that the number of foreigners in our midst stays at a level that we are able to cope with, and manage the social frictions that will arise from time to time. This is a series of trade-offs. It is not going to be a once-off adjustment. It will be a constant balance that we have to continuously monitor and get right.

Today, the Government does monitor the concentration of nationalities at the firm level. Mr Leong Mun Wai asked whether the threshold percentage of a company's workforce from a single nationality is a criterion for the Fair Consideration Framework, or FCF, Watchlist. The answer is yes. In shortlisting firms, MOM looks at whether they have a high concentration of foreigners from a single nationality source, in addition to a high share of foreign PMETs relative to their industry peers.

However, being flagged in the FCF Watchlist is not evidence that the firm has committed any wrongdoing. Potentially, it could be a sign that some unfair hiring may be occurring. The purpose of this Watchlist is to have the Tripartite Alliance for Fair and Progressive Employment Practices, or TAFEP, actively engage these companies to review and improve, where needed, their hiring practices and their human resource capabilities. The majority of the firms are cooperative. They respond positively and they exit the Watchlist. For the small minority that are unresponsive, they can have their work pass privileges curtailed or they can be suspended for a specific time period. And this is not a small penalty.

Today, this is an effective process, albeit resource-intensive. We currently have about 400 firms placed on the FCF Watchlist. There are limitations in terms of the reach and the number of firms that we can put through this process. We will be looking to complement, to strengthen the FCF Watchlist with a more scalable approach.

As mentioned in MOM’s Committee of Supply (COS) speech this year, we are also exploring further refinements to our EP framework. Today, we rely primarily on salary as a gatekeeper to select complementary talent, because this is easy to understand and administer. But we are also exploring further additional refinements to achieve our objectives of a strong Singaporean Core, complemented by a diverse foreign workforce. I hope to share more details in due course.

Last but not least, I want to deal with discrimination. We know that not all employers play by the rules. We have zero tolerance, zero tolerance towards discriminatory hiring practices. All employers are expected to comply with the requirements of the FCF and not discriminate on characteristics that are not related to the job.

When it comes to hiring foreign PMEs, employers must first advertise on MyCareersFuture.sg and consider all candidates in the local workforce fairly, before submitting a work pass application. TAFEP investigates potential cases of pre-selection based on proactive surveillance – we use data analytics and AI as well to find out. So, we actually sort of study the data quite aggressively. We also receive complaints from the public and we act on them as well.

Since its introduction in 2014, MOM has been progressively enhancing this framework. In January 2020, we stiffened penalties further for discrimination cases, so that errant employers can have their work pass privileges suspended for at least 12 months and, sometimes, up to 24 months.

Last year, we extended the FCF job advertisement requirements to cover S Passes as well as EPs and we doubled the minimum advertisement period from 14 days to 28 days to give local jobseekers more time to respond to job openings.

Mr Liang Eng Hwa has asked about the results of our efforts. Over the past three years, TAFEP has handled an average of 170 nationality discrimination cases arising from complaints annually. The top three sectors making up about half of the complaints are the wholesale and retail trade, administrative and support services and other service activities. These cases are investigated by TAFEP and, where warranted, they are referred to MOM for enforcement.

Going forward, we will do more to clamp down on egregious employers with discriminatory employment practices. Several Members of Parliament like Mr Louis Ng, Mr Patrick Tay and Mr Vikram Nair had earlier suggested strengthening our levers to give more bite to our Tripartite Guidelines on Fair Employment Practices. We take these suggestions seriously and we have been studying various options.

Ladies and gentlemen, on a fundamental level, the Government’s goal has always been to create a better life and a future for Singaporeans. We do that through growing the economy, through enlarging the pie so that more locals can enjoy better jobs and a higher standard of living. We do that by tirelessly building up the Singaporean Core through a world-class education system, through continuous upskilling and reskilling; and we do that through working closely with all stakeholders involved to stamp out discriminatory employment practices and ensure a fair playing field to protect our Singaporean workers.

There are careful balances and trade-offs to be made all the time. The Government is intent on keeping this balance right to achieve the goal of creating win-win outcomes for all. MOM will always be both pro-worker and pro-business.

This is necessarily a joint effort. The power and the responsibility to make this happen does not lie with the Government alone.

Businesses must be fair and progressive employers. They must win the confidence and the trust of their employees and the wider public by investing in a strong Singaporean Core, even as they complement it with a diverse foreign workforce.

Workers, too, must adopt a growth mindset and continuously develop their skills. This is the spirit of our Pioneers, who were resilient in the face of challenges and daring in new opportunities.

Unions and trade associations and chambers, or TACs, must continue to serve as multipliers of these positive changes. They help to build the bridge between Government and businesses and workers and they have spearheaded important initiatives to help our businesses and workers transform and upskill.

And I hope Members of all parties must take their responsibility as representatives of the people seriously and work towards constructive solutions and avoid exploiting divisive fault lines.

This tripartite partnership – between unions, employers and the Government – is the real reason why we have managed to succeed over the years.

We are at a critical inflexion point in our economic development. The pandemic has caused significant economic damage the world over. We face many challenges in the post-pandemic era, but there are also abundant opportunities if we play our cards right.

We have distinguished ourselves internationally with how we managed COVID-19 and we have enhanced our trust premium. Many businesses are now looking seriously at investing more in Singapore, which will create good jobs, but only if they can get enough workers, foreign workers as well, to supplement our local workforce. If we can bring them in, we can continue to grow our economy for another five to 10 years. But if we lose this opportunity, we will not only take longer to recover, the impact will be borne by our older workers and also by our youths who will graduate into the workforce over the next few years.

This is a golden opportunity for Singapore to pull ahead. But if we turn protectionist and we make it difficult for companies to hire talent from around the world, then we will lose this opportunity. A business hub means being cosmopolitan, having people from around the world, doing business with the whole world and creating more opportunities for Singaporeans. It will bring in competition. But if the competition is not here, it will be outside. The competition would be helping other companies in other countries to beat ours here and displace our workers.

Let us work together to continue improving Singaporeans’ lives and building a better future for all.

Mr Speaker, Sir, can I just take a couple more minutes in Mandarin, please?

(In Mandarin): [Please refer to Vernacular Speech.] We have always put Singaporeans at the heart of our economic policies, and have always strived to create good job opportunities for Singaporeans and improve their livelihoods.

Singapore's open economy has contributed to our strong economic growth over the past few decades. We have not only attracted many multinational corporations (MNCs) to invest and set up regional headquarters here, but also helped many local enterprises seize opportunities to expand and venture into overseas markets.

Foreign companies, especially those in specialised or emerging sectors, will inevitably need to bring in foreign professionals to complement the local workforce with skills that are currently in short supply. Nevertheless, such specialised capabilities can be transferred to local workers as these companies grow and develop. Over time, local workers will acquire new skills which will in turn raise their competitiveness.

I understand that the presence of such foreign professionals has caused some anxiety to Singaporeans. Some Singaporeans may feel that they face stiffer competition for jobs compared to the past, or that they have been treated unfairly when applying for jobs. Others may worry about whether Singapore's social fabric will change.

I understand the concerns of our Singaporeans. I would like to give the assurance that as we promote sustained economic growth, the Government will always continue to safeguard the livelihoods of Singaporeans. This is our firm commitment to Singaporeans.

Our strategy to achieve this is two-pronged. The first is to ensure that our local workers can continue to have access to good job opportunities. Over the past few years, we have been progressively tightening quotas for foreign workers, especially at the S Pass level. Last year, we also raised the Employment Pass (EP) minimum qualifying salary twice to ensure the quality of foreign professionals brought in by companies. At the same time, we have invested heavily in developing the skills of Singaporeans to ensure that they can maintain their competitive edge in the global market and succeed.

Second, we want to ensure that Singaporeans are treated fairly at work. We have been progressively enhancing the Fair Consideration Framework and stiffened penalties for discriminatory employers. MOM has also been exploring how to further refine the EP framework.

As the saying goes, "Life is like the waves on the sea, with occasional ups and downs. Whether in good times or bad times, we still have to work hard."

(In English): Somehow, it sounds different when I speak in Mandarin. [Laughter.] It is supposed to be sung in Hokkien. I think even Mr Pritam Singh knows that it is a Hokkien song.

(In Mandarin): Over the years, Singaporeans have gone through many ups and downs and never bowed to any challenges. After all, we believe in "working hard to succeed". In the face of this crisis caused by the pandemic, Singaporeans have upheld the spirit of selflessness and adaptability of our forefathers. This shows that Singaporeans are willing to work hard, but we also care about being treated fairly.

This requires the effort and cooperation of many parties. Companies must continue to innovate and transform to create more jobs that attract Singaporeans. At the same time, Singaporeans should continuously upgrade their skills and keep an open mind when looking for job opportunities. The Government will provide comprehensive assistance to help Singaporeans tide over this difficult period and maintain a fair and just society.

Over the past year, we have been hard at work dealing with the many challenges posed by the pandemic. At this juncture, I hope that we will stay united and uphold the Singapore Spirit. The Government will work together with Singaporeans to overcome the difficulties ahead, emerge stronger from this crisis and build a better future for all.

Mr Speaker: Minister Ong Ye Kung.

Mr Ong Ye Kung: Mr Speaker, pursuant to Standing Order No 44, I beg to move, "That the two Ministerial Statements made by me and the Minister for Manpower on Free Trade Agreements and Foreign Manpower be considered by Parliament."

Question proposed.

Mr Speaker: We will proceed with the debate. Clarifications? Speeches? Mr Patrick Tay.

2.47 pm

Mr Patrick Tay Teck Guan (Pioneer): Mr Speaker, Sir, I thank both Ministers for their Statements and wish to provide my comments, clarifications and suggestions on this sensitive and important topic which concerns Singaporean workers, especially our Professionals, Managers and Executives (PMEs).

I co-chair the NTUC-SNEF PME Taskforce set up by NTUC last year to look into the concerns of PMEs and to flesh out a set of recommendations later this year in relation to employment and employability of PMEs in Singapore. In the past six months, we have surveyed and engaged, through more than 15 focus group sessions, about 8,000 PMEs to better understand their concerns, fears and anxieties and ideate proposals to overcome them.

We have heard ground sentiments on a plethora of issues and challenges faced by Singaporean PMEs. At the top of their mind is job security amidst this COVID-19 pandemic. One concern, amongst others, which was surfaced is the intense competition from the influx of foreign manpower and anecdotes of unfair employment practices by employers who favour hiring foreigners and discriminate against our locals.

Some PMEs shared with us their personal experiences of foreign hiring managers bringing in co-workers of the same nationality while others have shared about disguised discriminatory practices at work where they felt ostracised when their foreign colleagues, who form a majority of the team, communicate in their native language at work and through the unfair allocation of off-days given to their foreign colleagues during public holidays by their supervisors of the same nationality. While it is clear only a minority engages in such unacceptable practices, the concerns are legitimate and we should not ignore them.

PMEs I spoke to acknowledge the need for FTAs and foreign manpower in this age of globalisation, global competition and economic survival and success, but we must recognise the need to support our local workforce's aspirations and to address their concerns and anxieties.

One Singaporean PME who is an Asia Pacific Sales Director, as well as many other PMEs in those sectors with a higher proportion of foreign PMEs, such as the financial, ICT and professional services sectors, shared with me that we should not allow the import of non-specialised and non-highly skilled foreign manpower to compete against Singaporeans for well-paying jobs which many Singaporeans can do. I think this principle of complementarity and not direct competition is an important concept which we need to continue to embrace and strengthen.

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 going to be an evolving process. Together with fellow Labour and PAP Members of Parliaments, I have been speaking and lobbying on this important area in and outside of this House the past decade to ensure fairness, equity and levelling the playing field, especially for our Singaporean PMEs.

Since 2011, I have been pushing for stronger enforcement against employers who discriminate against or unfairly treat Singaporean PMEs, a foreign PME dependency ratio, labour market testing which subsequently came in the form of the Fair Consideration Framework (FCF), the National Jobs Bank as well as many other policy measures, from Employment Pass qualifying salaries to regular tightening of the FCF and the prosecution of companies who are recalcitrant. We even set up the Employment Claims Tribunal, Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) as well as the Tripartite Alliance for Dispute Management (TADM), and issued many tripartite advisories, standards and guidelines to strengthen the Singaporean Core.

I am heartened that in these past 10 years of lobbying and advocating for a stronger Singaporean Core, many of these measures have been put in place, as shared by Minister Tan See Leng earlier, with the support of our tripartite partners and other economic agencies, such as MAS and EDB, to better support and protect our Singaporean workforce and provide them with a fair and level playing field in the job market.

In fact, less than a year ago, in the midst of the pandemic and worsening of the economy, the Labour Movement lobbied, and the tripartite partners created and updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment with key principles on fair retrenchment which provides added safeguards to preserve our Singaporean Core in our companies during retrenchment exercises.

That said, more needs to be done to strengthen the Singaporean Core, further develop our local workforce's capabilities and protect our locals from being unfairly discriminated. It is important to recognise the role that foreign manpower plays, which is to complement and enhance the capabilities of the local workforce and not to replace or displace it. In this vein, I would like to put forth some proposals to the Minister that aim to address fairness and localisation of PME jobs.

First, we can enhance fair hiring practices through strengthening enforcement and imposing stiffer penalties for errant companies with discriminatory hiring practices. I have previously submitted in this House on revealing or publishing the "triple weak" watchlist which MOM and TAFEP maintain, so that the potential reputational loss would serve as a deterrence. We should not allow the few black sheep to weaken our entire working structure. I further submit that MOM should consider giving TAFEP even more teeth and bite through expanded powers of investigation, enforcement and to even mete out punishment.

Second, we can level the playing field for local PMEs by enhancing the EP application review process to move beyond looking at the individual applicant's educational qualifications and salary, and pay close watch to sectors with a particular imbalance.

Finally, we need to ensure that locals have fair access to PME roles and progression opportunities to improve localisation of jobs in high growth sectors. As I have lobbied before in this House, it is imperative that we ensure concerted, structured, institutionalised and mandatory skills and knowledge transfer from these foreign PMEs to our local PMEs within a stipulated and agreed timeframe, as employers bring in foreign PMEs to fill skills or knowledge gaps in their current workforce. This will help to develop a pipeline of local talent. At the same time, we will also need to build our leadership bench strength to ensure that Singaporeans can benefit and take up leadership roles in multinational corporations that we bring into Singapore.

To sum up, to say that we have found the silver bullet or antidote will not be an easy one as it is a treadmill journey. We need to constantly watch our step, keep pace and stay in touch with the pulse. Pay close watch to economic competition and competitors, keep pace with the changing demographic profile and the future of work, and stay in touch with the pulse and heartbeat of Singaporeans, their stresses, aspirations, interests and well-being because every worker matters.

Mr Speaker: Prof Hoon Hian Teck.

2.57 pm

Prof Hoon Hian Teck (Nominated Member): Mr Speaker, Sir, an issue that has surfaced in the debate on Free Trade Agreements (FTAs), such as the Comprehensive Economic Cooperation Agreement (CECA), is that of their impact on jobs.

It is important to state at the outset that the number of jobs in an economy is not an immutable datum. Rather, it is variable and it is the result of the net effect of the pace of job creation, which adds to the number of job vacancies and the pace of job destruction, which reduces the number of job vacancies.

In the first few decades, after gaining Independence, the World Trading System under the General Agreement on Tariffs and Trade (GATT) steadily reduced every race and lowered trade barriers. The World Trade Organization (WTO) was established in 1995 as a multilateral institution that facilitated the signing of agreements in areas such as services, investment and Intellectual Property. This enabled the Singapore economy to attract MNCs to base production in Singapore, thus creating jobs and sell into the world market. With increased protectionist sentiments expressed in many advanced countries in recent years, the WTO has had difficulty in reaching new agreements.

It has been necessary for Singapore to turn to FTAs to provide a means to enlarge markets for Singapore-based firms. By negotiating and signing FTAs that enable our firms to export to destination markets with lower or zero tariff rates, Singapore can attract foreign capital to work in Singapore to employ Singapore-based workers and pull up their wages. With Singapore's total fertility rate consistently below the replacement rate of 2.1 since the mid-1970s, the size of the citizen labour force will begin to shrink, with more people retiring than the number of new entrants into the workforce.

A shrinking workforce will put downward pressure on GDP growth because productivity growth is unlikely to fully compensate for the labour force shrinkage.

Singapore's rise in living standards over the past decades has been facilitated by a steady inflow of foreign direct investments, which brought technology and good jobs. So, continuing to attract MNCs to base their production here, even as we become more service-oriented, with manufacturing hiring a smaller share of labour force, yet, doing this is likely to require a complementary set of skills that can be offered only by a combination of local and foreign workers, given the low fertility rate.

At this stage of our development, where indigenous innovation must contribute to productivity growth, FTAs also allow new start-ups as well as both Large Local Enterprises (LLEs) and SMEs, to face lower trade barriers when selling into particular overseas markets. So, we continue to need to rely on MNCs because they are large, they pay better wages, but we are also at a stage where we need to stimulate indigenous innovation. And they will start small. Many will fail. But they need to have the capacity to be able to sell abroad. Therefore, establishing FTAs that allow the partner signatories to the agreement to lower their tariff rates enlarge the market for our new start-ups as well as SMEs and LLEs.

To be clear, the increased international competition faced by our local firms also means there will be some job destruction because, with increased competition, some of our SMEs may fail. Nevertheless, the creative destruction resulting from FTAs is likely to leave the economy overall with more productive firms that are able to pay better wages

So, with stiffer competition, some will not survive and they have to try again, but, overall, for the economy, the level of productivity is higher as we seek to generate indigenous innovation as a source of our productivity growth.

So, FTAs are helpful both from the point of view of continuing to attract MNCs to base their production here, but it is also important as a way of giving a lift to our more productive local firms, SMEs, to break into potentially neighbouring markets and further overseas.

The derived demand for workers resulting from the need to meet this external demand for our goods and services, like foreign firms and consumers in the partner countries who are signatories of the FTAs, will translate into the creation of new job slots, in particular, tasks. Because, what is a job? A job is a combination of tasks that we create. So, the allocation of workers with the right skillset to fill these job slots with these particular set of tasks is necessary in order to maximise these Singapore-based firms' profit. Only then will the productivity of the firm be boosted and the salaries correspondingly increased.

As the local workforce raises its human capital because of the huge investments we have made from the beginning in education, the proportion of the cohort leaving Primary school that goes to University has gone up. So, from the point of view of increased human capital, as well as the investment in SkillsFuture to allow learning on the job, I think there is every reason to have confidence that our local workforce will both have a higher level of human capital as well as have the ability to acquire new skills to function in an age of digital transformation. If we succeed in doing that, then our resident workers will have the comparative advantage to fill these new job slots, the sort of thing that Mr Patrick Tay talked about.

Going back to Mr Ong Ye Kung's "Analogy A" of more jobs slots but more competition; and on the other hand, less competition and future jobs lost, he talked about being somewhere in between. Given our history, the ability to ultimately compete in the world market says that there is something positive of a tilting towards the direction of increased competition. But we make investment in our local workforce, starting from the Primary school level. And there is every good reason to believe that even as we transit to a phase of the country's development where you are not going to have the 5% growth per year, because that was catch-up growth, we are now at the stage where the potential for growth has to come from innovation driving productivity.

I believe that there is every good reason to think that, ultimately, many of these jobs that our locals take, they graduate from a university, they perhaps start off with an MNC at a lower managerial position, but with the sort of human capital, with the sort of ability to adjust and compete, there is every good reason to believe that many of them, on their own merits, have the potential to fill in these new job slots because there is local advantage.

Mr Speaker, Sir, to conclude, in the absence of a vibrant international trading system that can conclude new agreements to further liberalise trade in goods and services, I believe that the signing of FTAs overall provides the Singapore economy a means for its firms to expand their market despite the job churning and the creative destruction. That, ultimately, I believe, has a positive net impact on our labour market.

Mr Speaker: Mr Louis Ng.

Mr Louis Ng Kok Kwang (Nee Soon): Thank you, Sir. Not a speech, but just a clarification. If I could ask Minister Tan See Leng whether moving forward, we will consider legislating the Tripartite Guidelines on Fair Employment Practices. I think that is important because it is not just discrimination based on nationality, but also based on race, religion, gender, family responsibility, disability, amongst many others. So, I really hope we will consider legislating those guidelines.

Dr Tan See Leng: I thank the hon Member Mr Louis Ng for his suggestion. As I have shared in my speech earlier on, we are looking at refining and strengthening not just TAFEP, but also the Fair Consideration Framework. Give us a bit of time. We are reviewing it with the different parties because it is of a tripartite nature. And in the months forward, I should be able to come back and update this House again.

Mr Speaker: Ms Hazel Poa.

3.07 pm

Ms Hazel Poa (Non-Constituency Member): I thank the two Ministers for their Ministerial Statements, providing a wide range of information and explanation, and for this additional opportunity for us to seek clarifications on an issue that is of great concern to many Singaporeans. An open debate based on the right information can only be beneficial to all parties involved, whether in or out of this House.

I would like to seek a few clarifications. The first one relates to Minister Ong's claim that PSP has made false allegations that CECA is allowing a free flow of Indian PMEs. Can I ask the Minister to provide the specifics of these false allegations that he mentioned, including details like when and where and who? He gave partial quotes, but partial quotes can be taken out of context and if he can provide the specifics, we can look into it further.

Secondly, Minister Ong said at the beginning of his Statement that he would be happy to provide all information that we request for in order to have a more robust debate on the Motion subsequently. But at the end of the two Ministerial Statements, unfortunately, the bulk of the information that we have requested for in our nine Parliamentary Questions is not released. So, will there be any more data forthcoming in the form of Written Answers?

Thirdly, we agree that FTAs are important to Singapore's economy and we are not calling for the abolition of FTAs. Our concern is over specific provisions in FTAs relating to the movement of natural persons. In CECA, just now Minister Ong mentioned that the listing of the 127 professions does not mean that anybody who applies under this will be approved, but it can be rejected even if they apply. Article 9.5, clause 2, under the heading of "Professionals", states that "each party shall grant temporary entry and stay for up to a year" and it goes on to list several conditions.

So, my question here is, because it says "shall grant temporary entry and stay for up to a year", if an applicant meets the criteria that are listed in this clause, namely, proof of nationality, letter of contract or similar documentation, educational certificates or similar documentation, as well as the minimum salary requirements for EPs, for anybody who satisfies these conditions, are we obliged to approve their application?

Fourthly, under this clause, temporary entry and stay is up to one year. I would like to seek a clarification: can this entry and stay be further extended or renewed or re-applied?

Mr Speaker: Minister Ong Ye Kung.

3.11 pm

Mr Ong Ye Kung: Thank you, Mr Speaker. Let me try to answer the hon Member's four questions. I hope I got them all correct.

Proof of the allegations of PSP:

On 3 August 2019, Dr Tan Cheng Bock – I think he was then Secretary General of PSP – stated on The Online Citizen Asia Facebook page, I quote, "PSP will call for a review of the India-Singapore Comprehensive Economic Cooperation Agreement, known as CECA. This agreement, you must understand, was negotiated by our current Deputy Prime Minister Heng Swee Keat and signed in 2005. Amongst the terms of CECA, it allowed the free movement of professionals in 127 sectors to enter and work in Singapore."

On 7 July 2020, Dr Tan, in an interview with Mothership said, I quote, "CECA is an agreement between Singapore and India to bring in, to allow, I think, 127 categories of professionals to come to Singapore and be given that free hand actually, practically free hand, to come and work here."

On 31 August 2020, Mr Francis Yuen, on the PSP Facebook page and website, he urged the Government to release more data on the matter, which is fair enough. But then went on to state that the Government, I quote, "could not share the next level of details, including the number of Indian nationals converted to PR and those who subsequently gotten citizenships within the eight years under the intra-corporate transferee provision of the agreement." And then that starts to suggest that they come in and then become PRs and citizens as well.

Most recently, on 22 June 2021, in a Facebook post, Mr Leong Mun Wai said, "the most important economic policies that have affected the jobs and livelihoods of Singaporeans relate to foreign PMEs and Free Trade Agreements, in particular, the Comprehensive Economic Cooperation Agreement with India."

As Members of the House and also members of the public, through our handphones, we would also have received many other unattributable divisive messages coming through our feeds and chat messages. And I think these quotes and all these messages you receive, if you are Singaporean, especially one facing challenges at the workplace, feeling insecure, you are bound to feel upset and angry. You are bound to feel, "I do not want to welcome foreign PMEs". You will grow suspicious of them, even reject them. And that will be a natural reaction because the messages feed on our worries and our fears.

We have seen how this has turned out in so many other countries, how the extreme right, nativist, populist parties have grown in strength, just by tapping into that fear and insecurity because of globalisation. It is there.

But these far-right or nativist parties, they have been growing stronger in many places around the world and created divisions in societies. Sometimes, they have replaced the governments who take a more moderate policy. I really hope that it does not happen here because if it happens in Singapore, as it happened elsewhere, our policies, our politics would have gone disastrously wrong.

Ms Hazel Poa said that I promised to give all the data they requested. We tried. We tried our best. But as Dr Tan See Leng explained, no country release data to that level of granularity. But if I may just go back to my speech, what I said is, "Dr Tan will provide more detailed answers to the specific questions, including providing the data which will be useful for our subsequent debate and putting that data in context". I did not promise that all the data will be tabulated and provided, and Dr Tan explained why. We try to provide as much as we can, but I think there is a limit to what we can do.

Ms Hazel Poa also asked about Chapter 9 of CECA. As a trade negotiator, we always look out for the word "shall". When you see "shall", it means you must do something. If you do not do it, you are in breach of the agreement. So, what is the "shall" here? You "shall grant temporary entry and stay up to one year for the duration of the contract."

That is what we agreed to. That means if we approve, if you meet our work pass conditions, we shall grant you one year of admission. I think that is very reasonable. Imagine if you apply for something to the government, and then they tell you, "I approve but we do not know for how long"; tomorrow, revoke it. It cannot be. It is not market-friendly at all.

Remember, the ordering of the clauses matter as well. I was mentioning page one. I printed a copy and I highlighted the second and third paragraphs, the carve-outs. Carve-outs come at the beginning. You read this Chapter, you know that this Chapter does not apply to immigration measures. Government policies on immigration and on the granting of work passes, permanent residency and citizenship are not covered in this Chapter.

Then it goes on to say what the parties must then do. So, later on in the Chapter, it says that you "shall" grant one year of approval should you approve. That is how you read the agreement.

I hope I have answered all of Ms Hazel Poa's questions.

But I do have some questions too for PSP. If I may ask these. I tried to correct the falsehoods of CECA because the whole purpose of this Statement is that I know PSP is preparing for a Motion debate. But I am also hoping that we all go into the debate with some common ground.

First of all, common ground must be, let us put aside the falsehoods. Therefore, I clarified which are the falsehoods and let us put them aside. Do not bring them into the Motion. What are the falsehoods?

First, CECA does not allow a free flow of intra-corporate transferees to Singapore. Most companies prefer to apply for EPs than to use the intra-corporate transferee route, which is actually more cumbersome. Hence, I mentioned, as of 2020, there were only 500 intra-corporate transferees from India, in Singapore.

Second falsehood: CECA also does not give Indian nationals from 127 professions a free hand to come to Singapore to live and work. CECA allows them to apply for EPs. It does not oblige Singapore to approve the applications. Approval is subject to them meeting our criteria. Immigration measures are carved out from the agreement, like for all FTAs.

In the spirit of seeking common ground, we come to this House and we recognise that globalisation is a difficult thing. There are lots of pros but there are also cons. In the case of Singapore, globalisation has allowed us to grow and to create a lot of good jobs and has benefited many Singaporeans. If we had not done that, today, we will be having a very different kind of debate, of massive unemployment, of stagnating wages, of graduates not being able to find jobs.

But we also recognise there are downsides. There are two social downsides, other than the increased competition.

First, while foreign EP holders have come in to help us sustain our growth and though the growth in local PMEs outnumber that of foreign EP holders, the presence of foreign EP holders has nevertheless created more competition, discomfort and social issues. We must manage this.

Second, Singaporeans want to know that they will be given fair treatment at the workplace. It is entirely justified. We have rules to achieve such fairness and we will continually review these rules and framework, and how they are implemented to ensure that fairness is assured.

This is what the Government, on its part, has done in the spirit of trying to achieve some common ground as we go into the debate.

So, may I ask PSP, our two hon Non-Constituency Members of Parliament from PSP, after hearing all the explanations from Dr Tan and I, will you agree to the following?

First, the FTAs, including CECA, are fundamental to Singapore's economic survival and our ability to earn a living and we should not shake this bedrock for political purposes.

Second, CECA does not allow a free flow of Indian PMEs into Singapore. This is a gross misunderstanding of the agreement and FTAs in general. Nor is CECA the cause of the challenges faced by our PMEs. We must put a stop to the spreading of the falsehoods.

If you agree to this, I think we have a good chance to have some common ground that when we come into the House again for a debate on the Motion, we can have a meaningful and constructive debate.

If I may seek the clarifications of our two Members from PSP, please.

Mr Speaker: Mr Leong Mun Wai.

3.21 pm

Mr Leong Mun Wai (Non-Constituency Member): Thank you, Mr Speaker. I thank Minister Ong Ye Kung for the clarifications on our position. I also thank Minister Ong Ye Kung and Minister Tan See Leng for their detailed explanation of the situation on foreign PMETs, foreign manpower, Free Trade Agreements and CECA.

As to Minister Ong Ye Kung's questions, I will leave them to the last or we will leave them to be answered in the debate that we are going to conduct later on. But there are a few things I would like to bring up here or a few questions I would like to ask to clarify the situation further.

One, we are not against FTAs. We know the importance of FTAs for Singapore, as an open economy and especially as a small city state. However, what we are concerned about is what price we are paying.

The first question I would like to ask is, in the process of negotiating an FTA, what are the bargaining positions that we can give? I read things like, because we do not have many bargaining chips, the implication is that we may have to be a bit more relaxed with the movement of people. One question I want to ask is, is the movement of people or natural persons used as one of the bargaining chips when we are negotiating an FTA?

The whole purpose of PSP – as well as Hazel and I – bringing up the issue about foreign manpower or foreign PMETS or foreign talent, whatever term is used, and the FTAs is because it is about Singaporeans' jobs and livelihoods. When PSP's Dr Tan Cheng Bock raised the issue at the August 2019 launch of PSP, it is due to the huge amount of feedback that we got from the ground. By raising the issue, we had hoped that we would get some response from the Government to explain more about FTAs, in particular, CECA.

Indeed, you would admit that no other FTA has given and stated specifically that 127 professions can come in to work. You may say that no one has come in through the CECA route but the clause is there. It is up to the other party, whether they want to use it or not and, most importantly, up to our Government to administer our employment policies. Because our employment policies are already quite relaxed in granting work passes to foreigners, so the Indian nationals do not have to come to Singapore through the CECA route.

So, the first question I want to ask is whether the movement of people is used as a bargaining chip.

The second question I want to ask is, we should not focus on the number of people that got into the job market through the FTAs or CECA. They have provided some conditions. Most importantly is how those conditions under the FTAs interplay with our domestic employment policies.

The number to focus on is, how many of the respective FTAs' nationals – in the case of CECA, it is Indian nationals – have come to Singapore and taken up our PMET jobs? What is the share of that as a percentage of our foreign PMETs, and then, of our total PMET jobs? That is my second question.

The next point I want to bring up or question is, the Government has admitted that something needs to be done. There are concerns by Singaporeans regarding jobs and livelihoods. This has been going on and on. Have sufficient measures been taken to address them?

One of the questions I want to ask is, has the Government actually tried to find out what the total number of displaced Singaporeans is?

I would think that you cannot deny that there are Singaporeans who are displaced. Your narrative is that it is because they do not have the skills. Let us not push the blame to the Universities and the Polytechnics so easily. It has been 20 years since we started the foreign talent policy. Within 20 years, have we still not got our act together in training our people?

That is my third question, what is the total number of Singaporeans that are displaced over the last 10 years? They would like to have the job that was taken by a foreigner, but were not able to. They lost their current job and when they got another job, they got a lower pay.

There is also a significant number of Singaporeans who are under-employed. If you look at the growth of the Grab driver population, the growth of our traineeship programme and many of our independent workers, are they voluntarily opting for the independent lifestyle or are they facing difficulty in getting a permanent job? Has MOM done a study on those? Have you got the statistics? That is the third question.

The fourth question is, of course, we are particularly concerned about the finance and the IT sectors. Minister Tan See Leng has given some numbers. Unfortunately, we do not have enough time to digest those numbers. We will maybe discuss that in our debate in the future. But the fourth question I want to ask is, really, how many foreigners are there in the IT and finance sectors versus the number of Singaporeans and PRs? That is the fourth question. I think the Minister might have given some figures just now.

The fifth question is, the Minister said that we are not competitive, Singaporeans are not competitive but —

Mr Speaker: Mr Leong, I would urge you to stick to the facts. I think we have all been participating in this debate and listening intently, so I do suggest that you keep to what has been said. A lot of questions have been answered as well. The idea of a debate is to debate the issues that have been raised, so please do that.

Mr Leong Mun Wai: Mr Speaker, Sir, I am raising questions, can you be more specific?

Mr Speaker: You are free to raise questions. Some of these points have been covered. So, we are happy to take the time to debate whatever that is meaningful, but please make it meaningful.

Mr Leong Mun Wai: I do not understand what you mean by meaningful, because I am going through those points. Okay, never mind, I will try.

The fifth question is, we have had this foreign talent policy for 20 years. But if you look at the way MOM has administered and regulated the flow of foreign PMETs into Singapore, you find that the policies, of course, over time, there is a bit of tightening at a time but, generally, it seems to be too little and too late.

For example, the foreign talent policy has started in the late 1990s or around the year 2000. But the Fair Consideration Framework was only introduced in 2014. Only in 2016, I was told that the Fair Consideration Framework watchlist was started. Do you mean there were no problems the one- and a half decade before that? And the threshold salaries that we have, just EP alone, up till 2020 last year, it was still $3,600. At the kind of threshold salary plus no CPF, do you think we are attracting the right foreign talent into Singapore? That is the fifth question.

My sixth question is, I totally agree with Minister Tan See Leng about what we are driving at, it is not abolishing things, it is not totally eradicating things. We are also talking about a rebalancing, but the rebalancing cannot come as a result of a natural attrition from COVID-19. There must be a policy recognition that whether our past foreign talent policy was on the right track or not. If we review the policy and we think that there are certain things that we need to change, then make it a policy point. Do not allow natural attrition to come by and say tens of thousands have left Singapore. That is not the way we conduct policy.

So, it is about rebalancing and when we talk about rebalancing, Minister Tan also said, one thing is to ensure that Singaporeans can compete fairly or there is no unfair competition. He explained that not having to pay CPF for the Employment Pass holders is not a disadvantage. I respect you for your experience in the private sector, Minister Tan. As an employer, is that not a wage concession? So, how can we say that Singaporeans are not being treated unfairly in the job market competition? That is my sixth question.

My seventh question is, Minister Tan said that there is simply not enough local talent. Again, I will raise the point which I have said just now: then what happened to our education system? What happened that after 20 years, you are still telling Singaporeans that we have not enough talent? Of course, we are not saying that we can substitute the foreign PMETs completely. But at least there can be some rebalancing, and we get back to my question just now. And if the Minister admits that there is some displacement of Singaporeans, then that rebalancing means we must slowly allow Singaporeans to be given the first opportunity to take up the jobs first.

My last question is, the Minister talked about diversity, but here again, is it not something that MOM should have done long ago about diversity in the workforce when we introduced our foreign talent policy? We also know, because we have worked in an international environment before, that the group dynamics at the workplace can change very fast with changes in the nationality composition in the company. So, especially when MOM is monitoring and regulating the granting of the work passes, do you mean you have not, at the beginning, taken that as an important consideration?

And, today, then you have to say that, "On my watchlist, I have this number of companies that have a very large concentration of PMETs from a single nationality". So, we really want to understand how MOM actually administers this whole foreign PMET policy.

After this, maybe I will add a few more points, I will ask a few more questions about the approval process, some of the experiences I had in the private sector with regard to MOM and its approval process. But my questions are these questions for now.

3.39 pm

Mr Ong Ye Kung: It is a long list of questions which I am not sure would help us bring the discussion forward.

Let me take questions four to eight and then one to three. Four to eight is for MOM but I think let us not prolong this because, as Mr Speaker has noticed, many of the questions were actually addressed in our speeches. But if you do not accept what we say, there is very little room for us to further explain.

The long and short is, we have been extremely successful, as I have explained in my Ministerial Statement, in growing the Singapore economy, creating this multitude of jobs. I gave examples of our port, airport, financial services, ICT, manufacturing, you name it, we are a hub of all hubs. All these would not have been possible if we have not ridden on the wave of globalisation, welcomed foreign talent and given our own people very good training and education to rise up and take the positions.

I mentioned that our only problem is there is not enough of us. Investors come here, they want to hire Singaporeans. They know our education system is solid and we have such a wonderful reputation around the world, something that, as Singaporeans, we should be proud of. The education system is a bit stressful still, but we should be very proud of that. The problem is, there is still not enough of us.

There are some questions, and we have given figures, so I do not think I would answer those. He mentioned a whole series of procedural policy, how come the Fair Consideration Framework came in so late, why is the salary bar for entry raised only later. MOM's successive Manpower Ministers have been reviewing policies all the while. Policies are never static.

Old policies worked for a period of time. Then, when China and India grew, you get a different influx of workers. You need to adjust your position, hence, you review. And this process will continue and we will debate in this House on the pros and cons of prevailing and new policies.

You cannot say because we implemented something new now to respond to the situation, therefore, we have failed. Why did you not do it five years ago? It does not work like that. That is not policy-making. That is not how this House works. If it were so, then, for every Bill that is tabled in this House, we have failed, because we should have tabled this Bill five years ago. It does not make sense.

I will go back to the first three questions that the Member posed to me, but actually I posed to him first. [Laughter.]

Ms Hazel Poa made a point, if I heard correctly, she said, "We are not against FTAs, we support the FTAs". I thought we started to have some common ground. Then, she asked me about Chapter 9. She is not a trade negotiator, so, I think those are fair questions. I have been a trade negotiator for many years, I explained how the chapter ought to be read. And when she asked that, I hope it is because she might have read the chapter wrongly to think that Singapore shall allow professionals from 127 categories to enter, no questions asked. After my explanation, I was hoping that she would come to the conclusion that they might have interpreted the chapter wrongly but after hearing Mr Leong Mun Wai speak, I think my assumptions are all wrong.

I had two questions for the Members and was hoping to hear "yes" to both. But after hearing Mr Leong, although he said he is not against FTAs, but he then went on to say that, "you use movement of natural persons as a bargaining chip and sell away our rights for immigration". I already explained that is untrue.

So, after all the explanation and you still come to that conclusion, then I say this: number one, PSP you are against globalisation, you are against FTAs, even though I have gone to great lengths to explain that this is the bedrock of Singapore's economic survival; number two, you are really not taking back the falsehoods and the allegations. I do not think you are taking it back. You do feel that the FTA, that CECA, despite our explanation, let in Indian professionals freely into Singapore. I think those are your positions.

Please prove me wrong, but after hearing you, I am afraid these are your positions.

Mr Speaker: Minister Tan See Leng.

3.44 pm

Dr Tan See Leng: Mr Speaker, I must admit that, notwithstanding the fact that this is my first Ministerial Statement, I actually struggle to follow Mr Leong's line of reasoning. I guess it is because of the fact that, for quite a number of the issues, I think he is looking at it, first and foremost, from a hindsight kind of perspective: why is it that we did not do this, why is it that we did not do that?

If you look at the entire thing – and I am going to take a bit of time on this, to try and gather my thoughts and to connect his thoughts together which, like I said, I am struggling with. So, please be patient with me.

I think what is important is that, if we look at the evolution of our industry, how we started in the 1970s, in the very early part of my speech, at that time, our GDP was about S$20 billion; I think we are at S$454 billion now.

We started with a very conscious effort in the 1970s to go and build heavy industries. So, we developed Jurong Island. There were all these heavy industries that we built up. Our Pioneer founding generation leaders under former Minister Mentor Mr Lee Kuan Yew, Dr Goh Keng Swee and so on, I think at that time when we first started, we were very, very heavily invested in these heavy industries. We went on then into manufacturing. In the 1980s, we went into electronics. We did disk drives, wafer fabrication and then, eventually, in early part of 2000, we went into services, we went into bio-pharmaceutical, life sciences and so on and so forth. And now, we are into tech, we are into infocomm and we are into finance.

Every 10 to 15 years, we have seen fairly dramatic transformation. I think it is inconceivable that you would expect that policies that you enact do not get refined, do not get tweaked and do not get adjusted over time.

So, I guess to his point about the fact that why is it that we did not do this and so on, I think in the last 15, 20 years – and he has sort of pointed out the fact that I have been from the private sector; perhaps, I have not been in the Government long enough – if anything at all, for the last 20 years, change was the constant. Change is a constant and change will be a constant. We will continually face disruption, we will face transformation.

So, to his other point about why is it that we are not able to have all this workforce ready in spite of all of our education upgrades and so on, I think if we all had a crystal ball 20, 30 years ago and we could gaze so clearly into the future, perhaps, even for himself, as a CEO of a private equity firm, I think all the necessary investments made would have been perfect and spot on. But, perhaps, I think, hindsight, like what they always say, is perfect.

To the other point about private sector and how we package the CPF into it, indeed, I can share with you. Perhaps my experience is very limited; I have just been in healthcare all my life. I do admit that I lobbied at that time, five, six years ago, for an increase in the number of S Passes because of the fact that I needed to deliver a certain level of nursing care. I just could not hire enough healthcare personnel, for example, nurses, to come in and help us.

While we do not pay CPF, the overall costs of bringing them in is higher because we have to package in housing and other allowances. And, really, because the employer part of it is imputed into our cost, I can tell you with conviction, because I have done it for many, many years in my life, that that package that we pay out is higher than what we do pay to locals. The only difference of course is the overtime charges and so on. But I think that is another sort of thing altogether.

To the Member's point about the education system, I just want to share one bit. In the early 2000s, our Universities, our Institutes of Higher Learning, the number of IT students that they produced at that particular point in time, today, we are training about four times more what we used to be training before. The entry levels, in terms of the grades, the credits and so on, that are required for the students to make it to get into the Universities are also significantly higher.

So, I guess the point of this is that every single initiative, every single policy, we can always do better. And that is something that I have acknowledged. But the point is this, we are not that far worse off.

Today, if you look at the absolute PME growth numbers, three quarters are our local PMEs in good jobs; one quarter are filled by foreign work pass holders. Our glass is not even half full; our glass is three-quarters full. And we are looking at it from that perspective. Are you saying that we should even adjust that? Of course, we should try to bring it up to 90% or 100% full. But let us also be mindful of the sentiment, the worries and also the hard work of the other three-quarters in that glass that is three-quarters full.

I look forward to a robust debate with Mr Leong and Ms Poa. I think when they can put up questions which I do not struggle so hard to follow, that would be very welcoming. Thank you very much.

Mr Ong Ye Kung: I think, Mr Speaker, you will agree with me that we really need to move on. And to move on, can I go back to my two questions for the two hon Members from PSP?

One, do they not agree FTAs, including CECA, are fundamental to Singapore's economic survival? Yes or no?

Two, CECA does not allow a free flow of Indian PMEs into Singapore and this is a falsehood and a gross misunderstanding of the agreement. If they agree, I think we can have a meaningful debate when they table the Motion.

Mr Speaker: Mr Leong.

Mr Leong Mun Wai: Thank you, Mr Speaker. I thank the Minister for the two questions. As I said, the answers to the two questions actually require a bit more debate and study. But, first, I want to say that PSP and Hazel and I, we are for FTAs. Having heard that jobs and livelihoods of our people are not being used as a bargaining chip, we are very reassured that our interests, Singaporeans' interests are being taken care of.

However, whether CECA has contributed to the overall influx of nationals from that country, I think we need to study a bit more. Because we have to go back and look at the numbers provided by the two Ministers to see what is the share of the Indian PMETs in our overall PMET workforce and to take into consideration what Minister Tan See Leng has said about how we really need them. Then we would like to know whether there are skills transfer programmes, whether our education system is catching up fast enough and also the various practices in the market, before we can make a final conclusion that CECA is really neutral to beneficial for Singapore.

Mr Speaker: Minister Ong.

Mr Ong Ye Kung: I thank Mr Leong for that. I will just summarise that yes, PSP now agrees that FTAs are fundamental to Singapore's economic survival and that includes CECA. So, at least, that is common ground that we have established. I think that is useful and I thank Mr Leong for that.

And, second, the PSP now agrees movement of natural persons, Chapter 9, is not used as a chip and we are not giving away our rights for immigration. There is no free flow of Indian professionals into Singapore.

If I hear him right, I think he is confirming that. He is not sure about the overall balance of the Free Trade Agreement. I think we will leave it there for our debate later on. But I think these two, I will say, form quite good common ground, but it will also mean —

Mr Speaker: Mr Leong, I will call you when it is time to call you. Let the Minister finish.

Mr Ong Ye Kung: And it will also mean, naturally, that PSP will take back their allegations that CECA has led to an unfettered flow of Indian professionals into Singapore.

Mr Speaker: Mr Leong.

Mr Leong Mun Wai: Mr Speaker, to what the Minister has said just now, I think there is a bit of misinterpretation. What I have said is that we fully support FTAs. We know that that is important for Singapore. And we appreciate the point that we are not using the movement of people as a bargaining chip in the negotiation of the FTAs.

But as to whether CECA has contributed to the influx of some of the PMETs into Singapore in relation to our overall foreign talent policy, we have to explore that. And we do not agree that CECA is net beneficial to Singapore at this stage.

Mr Speaker: Minister Ong.

Mr Ong Ye Kung: I think Mr Leong is waffling. Yes, no, yes, no; it is quite hard to catch. I take it that you are not withdrawing your allegation and so be it. And I think at least we got you to say FTAs and CECA are fundamental to our survival. But if you continue to allege, notwithstanding all our explanations, I think there is no choice, we have to leave it as such.

It is regrettable because generations of FTA negotiators worked very hard to make sure our interests are all protected. This is not a backdoor. This is not an avenue for any professionals from any country to enter Singapore with a free hand and unfettered.

But I take it that this is PSP's position, notwithstanding and after hearing all our explanation. This is most regrettable but we will have to accept how they feel.

Mr Speaker: Ms Janet Ang.

3.57 pm

Ms Janet Ang (Nominated Member): Mr Speaker, I would like to declare that I am a Council Member of the Singapore Business Federation (SBF). On behalf of the business community, I thank both Ministers for their Ministerial Statements. Contrary to closing the doors, the businesses are begging, "Please open the doors, we need workers. Otherwise, who's going to do the work?"

Nonetheless, if I may, I am a product of Singapore’s MNC strategy. And during the Budget Debate and COS, I have shared my views in regard to embracing diversity of talents from all over the world, so that we can be uniquely competitive. So, for today, I will not go there. I will talk more about FTAs, in support of FTAs. A lot has been said but, perhaps, if Members can bear with me for a while, I will talk, from the business community, why is this important.

As a small and open economy without natural resources, we are highly dependent on international trade and highly integrated, well-functioning global value chains. International trade not only provides us with the products that we import and consume, but also connects us to the global market that supports our businesses and sustains our economy, creating the good jobs that Singaporeans have enjoyed in the past and aspire to for the future. With Singapore’s international trade more than three times its gross domestic product, our livelihoods and prosperity depend heavily on international trade.

For Singapore businesses, free and open trade, premised on the foundation of a rules-based multilateral trading system, is crucial to ensuring a conducive, stable and predictable environment. This is particularly important for us, considering that we are just a little red dot. Hence, the importance of FTAs.

Sir, as Minister Ong Ye Kung has earlier said, we have over 26 FTAs and our network of FTAs covers about 85% of global GDP, enhancing the value proposition of countries and economies that sit at the nodes of these networks, and Singapore is one of them. So, the FTAs yield tangible value to our companies. In 2018 alone, I understand that our companies enjoyed more than $1.1 billion in tariff savings. These FTAs accord our businesses preferential market access into the markets of our major trading partners, lowering entry barriers for the export of goods and services, as well as protecting their investments in other countries. This strong FTA network can be a tool for businesses, not only in reducing their costs and time-to-market, but also in ensuring a predictable trading environment.

Despite the pandemic, Singapore’s total services trade exports in 2020 amounted to $259 billion, with China, US, EU and Malaysia as our top trading partners. I would dare say that because our Singapore businesses remain very much plugged into our FTA network, we have been able to ride the storm of COVID-19 a little better than if we were disconnected. We should know first-hand what it Is like to be disconnected, considering the impact we experience in aviation and tourism because of border closures. Trade, along with foreign direct investments into Singapore, will drive our economic recovery and the resumption of business activities post-COVID-19, even as we restlessly reinvent our industries, innovate ideas, products, services and business models to emerge stronger post-pandemic.

Through this crisis, businesses have realised the urgent need to build resilience in their business models and supply chains, partly by exploring new markets and supply sources. Many have shifted away from lean supply chain models to adopt agile supply chain strategies and the FTAs are even more relevant than ever before for our businesses.

The COVID-19 pandemic has dramatically accelerated digital transformation to the top of the board’s agenda in every company. Singapore’s Digital Economy Agreements (DEAs) with Chile, New Zealand, Australia and, potentially, the UK look to provide frameworks for regulatory cooperation in support of trade and business in a digital economy and address issues arising from these emerging technologies. As we have heard the Minister for Trade and Industry yesterday, MTI and the Government agencies have been hard at work looking into various new opportunities for us to enter into new trade agreements, including for renewable energy, green economy and so on. On that count, frankly speaking, on behalf of our business community, I would like to acknowledge the efforts of MTI, MOF and all the Government agencies in helping our businesses to be competitive.

It is all about teamwork. In order to help our companies familiarise themselves with Singapore’s FTAs and improve their global competitiveness, the business community, supported by SBF, holds regular workshops as well as seminars and provides complimentary advisory services to assist the Singapore companies on FTA-related enquiries. Businesses can utilise these available resources and leverage SBF to provide feedback on how existing and future FTAs can better serve their needs, and we will continually do so.

Sir, to conclude, Singapore businesses, in our opinion, cannot afford to take a wait-and-see approach. We will need to navigate the pressing issues that adversely impact supply chains and business processes. Singapore businesses need to be "born international". Across industries, developing the DNA to tap into overseas markets and to trade with multilateral partners is critical for businesses to be successful, given Singapore’s limited domestic market.

FTAs offer a key tool for businesses to expand into new markets, enhancing accessibility of different markets by allowing businesses to export more freely and easing some of the regulations.

But Singapore and Singaporeans must humbly recognise that we are vulnerable. Past success does not guarantee future success. We need to exercise humility and restlessly reinvent ourselves. Some areas of concern highlighted in the recent World Competitiveness Report, in my opinion, are rather worrisome. These include potential relocation of businesses being a threat to the Singapore economy; perception of Singapore’s changing attitude towards globalisation, which Minister Ong Ye Kung has also highlighted earlier; the availability of skilled labour, qualified engineers and competent senior managers in Singapore, regardless of nationality. So, the availability of skilled labour and competent senior managers is a concern; as well as our immigration laws preventing hiring of foreign labour. Such perceptions could erode Singapore’s attractiveness as a business capital and our businesses are concerned and, I am sure, the Government is equally concerned. And, I believe, as Singaporeans, we should be concerned as well.

Singapore’s miracle has been attributed to our leaders deciding on a few right strategies, from generation to generation, and then, together with the support and passion of all Singapore businesses and workforce, executing those strategies brilliantly, with humility but with pride and solidarity as Singaporeans. We believe in each other. We have done it before. We can do it again. [Applause.]

Mr Speaker: Deputy Prime Minister Heng.

4.06 pm

Mr Heng Swee Keat (East Coast): Mr Speaker, Sir, thank you. Well, I was not intending to speak, but since Minister Ong Ye Kung mentioned that I was the chief negotiator for CECA, I thought I must put on record the question that Mr Leong Mun Wai asked.

Let me first say that I am terribly troubled by the way that PSP has taken this. And I want to put on record clearly, that the movement of natural persons is a very important chapter but it was not used as a bargaining chip to trade for what else we got. It was not.

So, let me give you a very brief history of FTAs because I was in MTI at that time, first, as a Deputy Secretary and then as a Permanent Secretary.

In 2000, the Doha round of WTO negotiation was launched and then-Minister George Yeo and I were at Doha. We saw the entry of China into the WTO.

But soon after the launch, our assessment and Minister George Yeo's assessment then, was that it looked like the Doha round would not go very far. And, indeed, he was proven correct. And he said, what does Singapore need to do to ensure our continued survival? Minister Ong Ye Kung earlier mentioned the importance of free trade to Singapore. Trade is more than three times our GDP and it will continue to be so.

So, he decided that we should pursue Free Trade Agreements, and our very first Free Trade Agreement was with New Zealand, two small little economies. And I must say that people were laughing; what could two small little economies do to advance the cause of free trade? But we persisted and we got the first agreement done and, thereafter, we went on to do a number of other agreements. When I was Permanent Secretary, I was in the trenches negotiating many agreements with our ASEAN counterparts. And that is how we had the ASEAN Economic Free Trade Agreement; that was enhanced to the ASEAN Economic Community. Thereafter, it was not just ASEAN. There were two things that we did. One was Free Trade Agreements between Singapore and other countries, far bigger economies: Japan, Australia, US; and then, more recently, the European Union.

You asked quite correctly, what is Singapore's bargaining chip?

The honest answer is very little. We only have tariffs on three items: beer, stout, samsu. And what is that as a bargaining chip? But I think a very important quality for our public policy is that we must be creative and we must learn to meet the needs of other countries to see what may be in the agreement that is of benefit to them.

So, how did we manage to negotiate trade agreements with big economies that have a lot of concerns? For example, Japan was very concerned about agriculture. In the case of India, there was an even wider range of concerns. So, let me tell Mr Leong and his team that I spent three years of my life negotiating this agreement because although I was a Permanent Secretary – and Permanent Secretaries usually just supervise, they do not get into the trenches – the Indian side decided that it was an important agreement, they would have a permanent secretary, and Minister George Yeo said, "Well, you have no choice". So, I ended up being the chief negotiator for CECA.

I can tell you the amount of homework I had to do to look at how we can come to an agreement. I went to different parts of India because there was objection from every part of India, from business groups to states. And I can share with you long stories about some of those most intriguing demands which I managed to explain why we cannot do. So, the movement of natural persons was a chapter which, indeed, the Indian negotiators were very keen on because they said, "What do we get?"

Well, I said no. Because this is of great importance to Singapore. You have a population that is over a billion. Singapore has a population of, at that time, probably about three-odd million, and I said we will be easily swamped. So, we must have very strict agreements on this. And that was, in fact, among the last chapters. There were two chapters that were the most difficult to conclude for which I never let go and we got what we needed.

So, I think Mr Leong Mun Wai must not think that, well, you said, "I hope that the Government has the people's interests at heart". Of course! Why do we negotiate FTAs and why do we do this in public service if it is not with the interest of our people at heart? Why do I spend three years of my life doing the agreement? So, please be reasonable and do not mislead Singaporeans.

I want to raise two other issues which are very important too.

First, you said, "Why is it that we do not have talents and what happened to our Universities?"

Senior Minister Teo Chee Hean was the Education Minister. So, was I, and all our former and current Education Ministers are sitting here. I must say that I am extremely proud of what our schools and our Institutes of Higher Learning (IHLs) have done over the years to groom Singaporeans. The World Bank has ranked Singapore the best in the world in educating our people. So, please do not go around thinking that we have not put in enough effort. And, in fact, we have increased cohort participation rates from 20% of cohort to now 40%, Government-funded. We now have six Universities. We have Polytechnics and ITEs which provide the most valuable practice-oriented learning. We have enhanced it with SkillsFuture. We have now the Earn and Learn Programme and a whole range of programmes.

So, I think, Mr Leong, you will better serve Singaporeans if you help Singaporeans understand how changes are taking place so quickly and you must help to encourage people to upgrade and learn new skills, and work to support our unions in forming Company Training Committees and Job Security Councils and the like, in order to raise the ability of Singaporeans to compete.

So, I think to say that our education system has not done a good job or that the Government has not put in enough, I would seriously ask you to rethink that, and come back and debate us on that.

Let me end by mentioning two very important points which two Members have just raised. Prof Hoon Hian Teck made an excellent point that the future of competition will be a future of competition of innovation and technology. And it is very important for us to bring in some of the best people to work with Singaporeans, grow Singaporeans to be able to excel in that new realm. It is going to be a different world. So, please do not get stuck in the old world and think that we can excel all on our own. Let us have an open attitude to work with countries around the world who are willing to cooperate and work with us.

Just last week, I had a very good session with the Minister of Higher Education, Research and Innovation of France and we talked about what France and Singapore can do together in our research agenda, in our innovation agenda. France is not a small country and they have a long history of science and innovation. So, that is a very important point that Prof Hoon Hian Teck had made.

The other important point is from Ms Janet Ang, who talked about digital opportunities and the new market.

No sector in our economy is going to be immune from competition. Economists used to have this concept of tradable and non-tradable sectors. Non-tradable sectors are naturally protected because they are in your neighbourhood. Your neighbourhood shops, who is going to compete with them? Today, with e-commerce, our neighbourhood shops are under stress. That is why we have a programme, as part of our industry transformation, to help our neighbourhood shops upgrade. That is why IMDA has put in so much effort on SMEs Go Digital programme.

I think it is very important for the right policy in Singapore: (a) to stay open; (b) to learn how to cope with changes which will be accelerating; (c) to make the best use of science, technology and innovation to allow us to move forward; and (d) to maintain unity so that businesses, unions, workers and the Government work closely together to make the very significant changes that you need to make. [Applause.]

Mr Speaker: Mr Pritam Singh.

4.16 pm

Mr Pritam Singh (Aljunied): Thank you, Mr Speaker. I just have two supplementary questions: one for Minister Ong and one for Minister Tan.

For Minister Ong, in 2016, my parliamentary colleague and Workers' Party Member of Parliament Leon Perera asked the then-Minister for Manpower – and this was arising out of feedback from the ground about CECA – issues about a lot of Indian nationals working on the ground. And the question Mr Leon Perera asked was about the number of intra corporate transferees (ICTs) that were working in Singapore through CECA. At that point, the reply that came was the Ministry does not disclose the data on foreign manpower with breakdown by nationality, including data on ICTs.

In February this year, Mr Leong Mun Wai of PSP asked a question about the number of ICTs working in Singapore. This time, the Government disclosed the overall ICT numbers over Employment Pass (EP) holders. And the number was something like 5% of EP holders. Today, we have more information, that for last year at least, 500 of these ICTs originated from India.

The point I want to make to the Minister and to the Government at large is the opportunity to quell or at least to nip some of these issues in the bud when they start moving into the realm of xenophobia and nativism. One important way to prevent that is the availability of information.

In August 2020, a Straits Times reporter mentioned that "ICTs were a key bone of contention with respect to CECA".

If this information on the number of ICTs had been made known earlier, it does occur to me that a lot of the misunderstanding and the reaction we see about CECA could have been addressed and actually nipped in the bud.

I hope the Government understands that with more information, actually, we can hold the line better before these discussions move into a realm of xenophobia and so forth.

My question to Minister Tan See Leng pertains to TAFEP and the strengthening of the enforcement arm of TAFEP. We had an exchange at the opening of Parliament about this and I would just like to confirm with Dr Tan whether raising the numbers in the enforcement arm of TAFEP is on the cards and what discussions have taken place since August last year insofar as how TAFEP will be beefed up. The Workers' Party has a position about anti-discrimination legislation. Is that something that MOM will be prepared to look into?

4.20 pm

Dr Tan See Leng: Mr Speaker, I thank the Leader of the Opposition, Mr Pritam Singh, for his question.

We are reviewing our existing frameworks. The suggestion that he talked about, the position he had alluded to, in terms of legislation and all that, it is not something that has just come out from the Workers' Party. If you go back in terms of the past proceedings, I believe that quite a number of the Labour Members of Parliament, including Mr Patrick Tay and even non-Labour Members of Parliament, such as Mr Louis Ng, have also raised it at different times.

The assurance that I want to give to the House – to everyone who has raised it and who is concerned about this – is to allow myself, together with the team, together with the tripartite partners, to go deep, look at all the different implications, look at also the various options that we have to see how we can strengthen it. As I have alluded to in my speech, Mr Pritam Singh, I think you will appreciate the fact that given where we are today, it is a very tight rope that we are navigating.

On the one hand, we want to continue to strengthen, to tighten. On the other hand, businesses have the competing interest of asking us to be a bit more lax. One of the reassurances that our Ministry wants to give to Members of the House here is our consistent focus on – and we have never diverted our attention away from it – developing the Singaporean Core. We are fully cognisant of the angst, the fears, the worries about making sure that there is fair, there is equal opportunity in terms of capability development, capability transfer, fair hiring, promotions and so on and so forth. All those things, we will be reviewing in order for us to strengthen that framework.

I do not want to sort of go down a prescribed route today because we are exploring the entire universe. I hope that answers your question.

Mr Speaker: Minister Ong Ye Kung, if we can wrap up the debate.

4.23 pm

Mr Ong Ye Kung: Thank you, Mr Speaker. I will answer the question from the Leader of the Opposition and then seek to conclude this debate.

I take to heart what the Leader of the Opposition has said, that with information, we can quell such falsehoods much earlier. We work in a bureaucracy. Some data is classified secret, confidential and so on. So, we are not at liberty to always disclose them. But what you say is true. Some information, it is better for it to come out early and then we can move on. Especially, as you said, when it concerns issues like racism or xenophobia, it is much better to quell it early.

I take comfort that based on what you have said, I think you do agree that FTAs and CECA are fundamental to our survival. I hope you heard our explanation and are convinced that CECA's Chapter 9 does not allow an unfettered inflow of Indian professionals. If you disagree and I misrepresented you, please jump up and correct me. I do not think you will.

The Deputy Prime Minister and myself are former trade negotiators, fighting in the trenches with our fellow teammates, which is why I think we both felt compelled to say something today.

Negotiating an FTA requires a lot of dedication and hard work. It takes a toll on the family because you are out of the country all the time. Our negotiators are up against very formidable partners sometimes. Our job is to advance Singapore's interests while protecting our areas of sensitivities. But we work hard at it, nevertheless, because we know it makes a huge difference to Singapore. It benefits industries and companies, creates jobs for our people, secures our place in the world. This is where we are coming from.

So, I felt sad, somewhat, that PSP did not withdraw their allegations.

When we explained how an FTA works and how Chapter 9 works, it is a statement of fact. This is how it works. It is not a matter of your opinion or your perspective. The logical thing for PSP to do, I felt, is to withdraw their allegations. Then, we can discuss employment policies, how we can better protect, educate, train our workers. These are very legitimate questions.

But PSP did not do the logical thing. I could not hear a definitive position from Mr Leong Mun Wai or Ms Hazel Poa. They waffled a bit and then I think what I heard was they cannot conclude either way now whether CECA is better or worse for our workers. But if you cannot conclude either way, then the honourable thing is to also withdraw the allegations while you figure out which way you want to lean. But I do not think what we saw was logical or honourable.

A successful FTA strategy is not just about negotiating skills. Those are important but, fundamentally, it requires us to be broad-minded and able to cast our sights far and wide to the whole world and work with like-minded partners out there.

That is why COVID-19 is such an existential crisis for us. It has forced us to close our borders. But I am confident that once we get the great majority of our population vaccinated and control the pandemic, we can re-open the borders progressively again.

What I am worried about is, even when our borders are re-opened, what about our hearts and our minds? Will they be re-opened?

If, because of COVID-19 or during the COVID-19 pandemic, anti-foreigner sentiments and xenophobia creep into our collective psyche, then even if our borders are open, our hearts and minds are not and will remain closed. Then, we will not recover from COVID-19. Then, we will truly have long COVID-19.

Of all times, this is the worst time – in the middle of a crippling pandemic – to talk about turning inwards, to reject FTAs and to reject globalisation. I say we should emerge from COVID-19 announcing to the world that Singapore continues to be that shining jewel in Southeast Asia: the largest transshipment port in the world; the special Changi experience; the financial services hub and IT capital; a hub for manufacturing, hospitality, meetings, incentives, conventions and exhibitions (MICE), and so on.

Here, the world converges. You can experience the richness of many cultures and also the uniquely Singapore character. Singaporeans will benefit immensely from this because of the opportunities it brings and of how the international linkages and relationships cement our position in the world.

Most importantly, we will be more united. We must be more united than ever. Every one of us know that because we all did our part – whether it is getting vaccinated, undergoing regular testing, observing safe management measures, helping others in need, taking care of patients – all of us did our part. We stayed united. Unity is what helped us conquer and overcome this pandemic. [Applause.]

Mr Speaker: Pursuant to Standing Order No 44(2), the Motion to consider the two Ministerial Statements on Free Trade Agreements and Foreign Manpower lapses at the conclusion of debate.

Order, I propose to take a break now. I suspend the Sitting and will take the Chair at 4.50 pm.

Sitting accordingly suspended

at 4.29 pm until 4.50 pm.

Sitting resumed at 4.50 pm.

[Mr Speaker in the Chair]