Covid threatens Singapore's business hub crown

Pavla and Alain Schneuwly called Singapore home for more than a decade, raising their two sons in the South East Asian business hub.

"Everything was perfect, life was beautiful. We could travel around and enjoy the best of Singapore," says Pavla.

But, she says, things changed when Covid-19 hit, prompting them to leave for a new life in Dubai.

"It became increasingly obvious that there was a bit of divide in the treatment of the local residents and the expat community. We felt increasingly that the restrictions that were imposed on us were unfair," she says.

The Schneuwly's predicament shines a light on the difficult position Singapore's government finds itself in.

Its economy has traditionally relied on the many foreigners who live and work in the country - the high-earning professionals at global firms that set up their regional headquarters in the city state and the manual and domestic workers who take up many low-paid roles.

Now, with economic pressures increased by the pandemic, and a rising - albeit low - unemployment rate, there is growing anger amongst some Singaporeans towards the high number of workers from overseas.

Some say they have been deprived of better job prospects by foreign professionals, while others have been irked by cultural differences and a few high-profile incidents where foreigners have "misbehaved". For instance, a group of foreigners had their work passes revoked for breaking lockdown rules last year, while a British man who refused to wear a mask on a train was recently deported.

On Sunday evening, the country's Prime Minister Lee Hsien Loong highlighted these issues in his National Day speech.

"We must not turn our backs on them, and give the impression that Singapore is becoming xenophobic and hostile to foreigners," he said.

"It would gravely damage our reputation as an international hub. It would cost us investments, jobs and opportunities."

Despite these promises of inclusivity however, some foreigners have felt the impact of the country's shifting policies.

Like other governments in the region, Singapore has at times during the pandemic had different border rules for its citizens and foreign residents.

There have also been differences in vaccine eligibility, while companies have come under pressure to hire more locals, with foreign-worker quotas for certain industries changed in recent years.

This will continue, according to Prime Minister Lee, who said Singapore will tighten the criteria for foreign working visas "gradually and progressively" to tackle companies overseas that sometimes hire based on "familiar links and old boys' networks, rather than on merit".

There is already some evidence to suggest that these policies are having an impact on the number of foreign workers in Singapore.

Annual figures from the country's Ministry of Manpower shows the total number of workers from overseas declined by almost 14% in the year to December 2020.

And it's not an insignificant number. Even after that decline, there are still more than 1.2m overseas workers, or about a third of Singapore's total workforce.

Federico Donato, President of the European Chamber of Commerce, said parts of this workforce are vital for Singapore's development:

"Allow me to borrow an example from soccer. If you play in the Champions League, you need to have the best talent, you want to have Ronaldo, Bonucci and Messi to compete at the top level.

"If you want to be a top banking centre, you want to be a global tech hub, you cannot do it without an influx of people - especially if you are a country with just five million people."

"Countries everywhere face the same concerns about whether foreigners are taking over jobs and opportunities for locals, whether you might result in higher income and wealth inequalities, whether there will be unfair hiring practices, these are not unique to Singapore," the country's Finance Minister Lawrence Wong told the BBC just days before the Prime Minister's speech.

"But these concerns have always been there, accelerated, amplified by the pandemic," he added.

Simon Hayes is an executive recruiter at Andrews Partnership in Singapore. He says the new policy is working and demand for local talent has increased:

"Policy is obviously a factor, it is harder to get an employment pass than it would have been five years ago. But there's also a recognition of the strong talent you can get in Singapore."

Mr Hayes has recruited a number of Singaporeans to Asia-Pacific regional leadership roles, and also enticed a number of Singaporeans to return home.

"Companies need to be bolder in exploring the talent here," he says, highlighting that Singaporeans have specialised understanding of the region and its politics as well as how to do business with China.

While Singapore is keen to make assurances that it is still open to workers from overseas, it is inevitable that some of them, like Pavla Schneuwly and her family, will no longer feel welcome.