More investment leads to more jobs which means more foreigners.Khaw explains policy dilemma during difficult times in 2005 and 2006

The Government’s ‘yes’ to investments and inflows of foreign workers which led to today’s infrastructure crunch is also why Singapore now enjoys low unemployment and has room to raise wages at the bottom.

National Development Minister Khaw Boon Wan made this point in a recent interview with The Straits Times, pointing out that from 2005 to 2006 following the 2003 Sars crisis and recession, Singapore was experiencing ‘difficult times’.

It was looking for investments to create jobs for Singaporeans, but companies also needed foreigners to fill positions that required a wide range of skill sets.

  • People forget those were trying times for Singapore, he said, when the future was uncertain and the country struggled for a stretch to secure investments. Then suddenly, they came in a bunch.
  • ‘Do we take them or miss them? Sometimes we have to take a decision which has both negative as well as positive consequences. We have to weigh and make the trade-offs,’ he said.

So the Government had to make the tough choice of accepting the investments ‘knowing they’ll be good for the country, but at the same time (knowing) infrastructure will be hit’.

He was responding to a question on whether the Government would have done anything differently if it could go back four to five years.

If it had sought to be ‘populist’, it would have said ‘no’ to the big firms, he said.

  • Then, when the global financial crisis hit in 2008, Singapore would have suffered badly.
  • It might still be in recession as many more people would have been out of jobs – but trains would be less crowded, he said.

But because it welcomed the investments, Singapore’s economy bounced back with record 14.7 per cent gross domestic product growth in 2010.

That has kept unemployment low and enabled the National Wages Council to recommend wage adjustments upwards recently, he said.

So which is the better outcome? he asked.

Today, it is ‘very hard to find consensus’, but the answer to that question would have been a ‘no-brainer’ 20 years ago.

  • That is because there is now a comfortable middle-class who would rather forgo the investments, he said.

But young people graduating will want opportunities and jobs, he added. ‘You will get different reactions from different groups.’

The minister, who is also chairman of the People’s Action Party (PAP), is optimistic that the ‘infrastructure deficit’ can be fixed – and anti-foreigner sentiment brewing in Singapore will ease.

His comments come a year after a watershed general election in which voters expressed unhappiness over the rapid inflow of foreigners and its adverse impact on infrastructure such as housing and transport, and the cost of living.

Asked what the PAP’s biggest challenge is,

  • Mr Khaw spoke of the challenge of satisfying a maturing society made up of groups whose interests diverge from one another’s.
  • ‘Yet, you have to govern. You have to take into account what is the majority interest,’ he said.

By Jessica Cheam, Published on Jun 4, 2012


  • Do you think the PAP can maintain its share of the popular vote in the coming years?

We must try. What would it take? It requires our voters to understand the larger picture and accept the need for trade-offs. It also requires the Government to explain more, engage more, and earn the trust and confidence of the people. The first two generations of political leaders and the people went through crises and became bonded. A new generation will need to forge a similar bond of trust and confidence.

  • How will the Government get as many people on board with the decisions it has to make?

Engagement is necessary but not sufficient. It requires a certain maturity that at the end of the day, hard decisions, involving trade-offs, need to be made. Not all views can be taken on board. Indeed, as society matures, diverse interest groups will emerge, with often contradictory needs. There is no way one can satisfy all groups.

For it to work, we need patience and trust. Patience because it is time-consuming. Trust because without it, there can be no consensus or compromise.

  • What are the challenges ahead for the PAP?

That satisfying all almost becomes impossible. What makes populist slogans attractive is they only tell half the story. They tell you what you like to hear but they haven’t given you the bill. A responsible party must give both sides of the balance sheet. But very few or none of the opposition parties are doing that. And that’s why incumbents find it challenging – not just here but all over the world.

Fortunately, the majority of Singaporeans do understand and support a responsible government. But what we must guard against is an overswing… and to retreat from globalisation.

Singapore succeeded because we opened to the world. It will continue to need to open to the world to succeed. Or our children will leave us for better opportunities elsewhere and we will be very lonely without them when we grow old. That will be very sad. Japan is a good live example.

  • Any thoughts on the Hougang by-election?

It was a local election and it’s over. So let’s get back to business. We have many things to address. The world is in a state of flux, we’re bound to have many crises, big and small, coming our way over the next few years.

Sometimes I think Singaporeans become too focused on the domestic, forgetting about the larger world. Sometimes we forget… there’s no reason for us to be so insulated. The world affects us in multiple ways, we must always be very mindful of what’s happening and take challenges in our stride.

  • Population and demographic challenges are shaping up to be a big issue this year. What are your views on this?

At the end of the day, it is about what kind of Singapore we want. The technical challenge of how to house a particular population size can be solved technically. For example, we can always build higher or go deeper underground. But it is the political and social debate about the preferred nature of our society which is the more important and difficult discussion. What is the proportion of new to old citizens? What is the proportion of foreign to local workers? There are no right or wrong answers.

  • As someone who was in government for a long time as a civil servant and now in politics, what are your biggest worries for Singapore?

That we forget how we have come so far, and take our future for granted. We succeeded because we have always focused on the longer-term, larger good of the majority, made the right trade-offs, and took the right choices.

If we swing into a purely ‘what is in it for me’ mode, it will be very worrisome. We will lose our unity and our strength.


One comment on “More investment leads to more jobs which means more foreigners.Khaw explains policy dilemma during difficult times in 2005 and 2006

  1. […] A Vote for Change – SG Hard Truth: More investment leads to more jobs which means more foreigners.Khaw explains policy dilemma during d… […]

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