Citigroup Inc, HSBC Holdings Plc, UBS Group AG: Global capital's gleaming logos dominate the night skyline of Singapore's central business district. They don't have the vista from a balcony at the Marina Bay Sands hotel and casino to themselves, however. Nestled among them, competing for eyeballs, is a tower bearing the logo of the National Trades Union Congress. Local lenders and property developers also jostle for attention.
Long a beacon for planet-spanning corporations, a sanctuary of administrative stability in a volatile neighbourhood and a template for global cities, Singapore is undergoing a subtle but significant reorientation. It still wants foreign investment and is keen as ever to retain its status as a hub: Ministers assure companies they are welcome and insist Singapore won't turn its back on the world. Yet those soothing incantations now come with an important caveat: The republic sounds far less enthusiastic about the talent that those prized firms want to bring with them.
Instead, Singapore's leaders find themselves focusing increasingly on social cohesion. A series of race-related incidents and violence have played across domestic media this year. Concerns about a growing wealth gap are prompting consideration of a wealth tax on local tycoons and the many well-heeled globetrotters who have taken up residence. While the foreign workforce has receded over the past two years, it still represents more than 20% of the population. Where Singaporeans once accepted that for their small nation to survive, they needed to welcome foreigners, the question now asked has become akin to: Is there sufficient direct benefit in it for me? How Singapore emerges from this period of soul-searching will say a lot about the mobility of cash and skills in the post-pandemic era and whether Asia, which rode to prosperity on outside investment, still wants that infusion — and at what social price.
Like any nation, Singapore understandably wants to adjust its expectations of, and demands on, international companies. The republic controls its borders, who enters and leaves and on what terms. But the transition to a more nuanced landscape also requires a recalibration of the country's reputation. It may well still be a top Asian destination for commerce, but its appeal will rest as much on the shortcomings of its neighbours as the warmth of its welcome.
Singapore's shifting attitudes could also be a harbinger of changes to come in other global cities. Singapore, often compared with Hong Kong, has spawned imitators such as Dubai that follow the same formula: Get rich, suck in talent, build great infrastructure, keep taxes low — or nonexistent — and have fabulous ports and airports where people and goods can get in and out quickly. Can global cities, especially urban centers without a hinterland, survive trauma as big as Covid-19? They rode out the global financial crisis of 2007-2009. Yet they will have to be even more alert and nimble in adapting to an era of constrained travel, shortened supply chains and heightened tensions between two superpowers increasingly attuned to who's loyal and who's not.
In the eyes of some expatriates, Singapore is leaning against their once-valued expertise. Expats face ever-tighter requirements for work papers. The salary requirements for employing foreigners are being raised, narrowing the positions open to them, with those in banking subject to even higher pay thresholds. Companies suspected of discriminatory hiring and failing to promote Singaporeans can find themselves on a watchlist. In a contentious recent step, foreigners living as dependents now need a company-sponsored visa to work. Companies are falling over themselves to put a local face on what they are doing. Finance, where non-Singaporeans are heavily represented in senior management, gets particular scrutiny. On July 6, the day of a parliamentary debate on the workforce, Citigroup issued a press release headlined: "Citi announces senior appointments of five Singaporeans across the Asia Pacific."
Singapore's recalibration toward the import of labour actually has its roots in policies aimed at securing the nation's viability. Soon after independence in 1965, the republic suffered a setback when the UK said it was withdrawing from its military bases. Lee Kuan Yew, Singapore's long-serving first prime minister, determined that the country's survival hinged on becoming an inextricable link in the global chains that sustained American-headquartered multinational firms. "It thrived because it was useful to the world," Lee wrote in his memoir "From Third World to First." "It is part of the global network of cities where successful corporations of advanced countries have established their business."
This meshing wasn't intended to be static. In 1999, Lee's successor, Goh Chok Tong, said being best on the block wouldn't cut it. "We must make Singapore an oasis of talent," Goh said that year, according to a biography of Goh, "Standing Tall," by Peh Shing Huei. "Many cities are vying to be the key global node in the region — Hong Kong, Shanghai, Sydney, Taipei, Singapore. Who wins depends on who attracts the most talent, and forms a critical mass that draws in still more entrepreneurs, bankers, artists, writers, professionals."
Singapore's population did, indeed, boom. It rose by about 40% in the first two decades of this century and stood at about 5.5 million at the end of June. While that growth buttressed recoveries from the Asian financial crisis and its global sequel a decade later, it also led to strains. In 2011, the long-ruling People's Action Party suffered its worst election outcome since independence, with its share of the vote dipping to 60.1%. The most common critique was that the population had grown too quickly, straining housing and transport. Such complaints were considered as a proxy for immigration.
A decrease in permanent residency visas followed. The number granted each year has hovered around 30,000 since 2010, well down from around 80,000 in 2008. "There was a strong reason why the government was bringing foreign manpower in to support and grow our economy," Goh told Peh. "Unfortunately, the negative ground sentiment went beyond crowdedness. It also encompassed perceived job competition from foreigners and the preference of some companies for foreigners over Singaporeans. Well, every medicine has its side effects. The key point is how quickly the government responds."
Sure-footed governance and political stability have traditionally been assets for global cities. Singapore has benefited: The grip on power exerted by the People's Action Party, say Singapore's fans, has enabled the government to make far-reaching decisions of long-term benefit. Predictability has been a touchstone.
That's made recent mixed messages, not just on labour but also on pandemic management, all the more jarring. Few countries have handled Covid with aplomb, but few have Singapore's reputation for technocratic and administrative excellence. As a consequence, it inevitably faces a higher bar.
Despite a vaccination rate exceeding 80% and official assertions about the need to live with the virus, Singapore is struggling to dismount from a carousel of openings and closures. Different ministers have emphasized different things. Singapore's storied sureness of touch and clarity of message have suffered. "I am very sympathetic to the sense of confusion around how come your specific actions today doesn't quite gel with what we said a few weeks ago," Communications Minister Josephine Teo said in an Oct. 1 interview with Bloomberg News. "We obviously have to address that." A week later, Prime Minister Lee Hsien Loong tried to draw the strands together and align the government behind a simple message. We can't be "locked down and closed off indefinitely," Lee said in a national address. "We should respect Covid-19, but we must not be paralyzed."
Tight border and quarantine orders appear to have hit white-collar foreigners hardest, though new vaccine travel lanes may alleviate some of the worst of this. In fact, for every Singaporean gripe about outsiders hogging job opportunities and being paid too much, there's an expatriate professional weary of Singapore's frequent U-turns and red tape in the name of combating Covid. For many, visits home — once an accepted staple — now have to be coordinated with the government via human resource departments.
The tough travel restrictions have hurt more than just European or American expats: More than 100,000 Malaysians who used to commute daily across the bridge have been stranded. What's more, Singapore's once lucrative lodging industry has suffered from the drop in tourism and conferences; same with footfall at some malls. Time was when a visit to the lovely bike paths and running tracks along the city-state's east coast served as a tonic for worries about globalization in the aftermath of Brexit and President Donald Trump's election. You could almost set your watch by the passenger jets approaching Changi Airport, coming in over the tops of tankers and crammed container vessels waiting to berth at Singapore's world-class port. No more. On a recent run late one afternoon along the coast, I spied only a lonely PT Garuda International plane appear through the drizzle.
There's been no real gnashing of teeth accompanying figures showing the population retreating more recently. The number of people calling Singapore home fell 4.1% last year, the second consecutive dip and only the third contraction since 1950. As was the case in 2020, the dip was largely a result of foreigners departing.
More declines are on the horizon. The fertility rate fell to 1.1 last year, a record low, despite a raft of incentives for couples to get busy. Society is also ageing: The ranks of folks aged 65 and above approach 18% of the total, up from 16.8% a year earlier and a bit more than 10% a decade ago. The city-state is cooling on the world just as its homegrown demographics swing against it.
Prime Minister Lee, the son of Lee Kuan Yew, acknowledged the interests the government is trying to balance in his pre-national day Aug. 8 address. "We have to adjust our policies to manage the quality, numbers and concentrations of foreigners in Singapore," Lee said. "If we do this well, we can continue to welcome foreign workers and new immigrants, as we must."
Singapore's latest effort at a tightly controlled re-opening — work from home is still the default setting — struck many of the right notes, as did the premier's rejection of a prolonged defensive crouch and some of the steps that followed. And for now, Singapore benefits from a robust global upswing: The International Monetary Fund projects world gross domestic product to climb 5.9% this year; Singapore forecasts a range that's a bit better.
Yet don't expect the Singapore that emerges from the pandemic to pick up where the old one left off. An instinct for survival has often gotten global cities through. For Singapore, it means reckoning with choices deferred during less dire times, like finding the right mix of imported and home-grown labour. Meanwhile, though, let's get back workers, whether imported or local, into those glass towers downtown. Global cities are infinitely preferable to global shells.
Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.
Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement