Singapore raises bar on foreign workers

Singapore will make foreigners pass an English test to get a skilled worker permit next year, a move seen as addressing a poor services industry and public worries over competition for jobs ahead of possible elections.

The city state is looking to grow its labour-intensive services industry to offset dependence on manufacturing, and said earlier this year it would restrict the flow of foreign workers after the financial crisis hit growth and increased unemployment. This first step may be a move to appease voters' concerns about jobs not only going to foreigners, but to foreigners who struggle to communicate with locals and shift the balance of population in multi-racial Singapore, analysts said. "The government is responding to complaints from the public over the inability of many of these foreign service staff to speak in English. They can't serve ethnic Malays and Indians who may not able to speak Mandarin," said Terence Chong, researcher at Singapore's Institute of South East Asia Studies

"They recognise this resentment (of job competition), especially during this economic downtime and you have the elections coming up by early 2012. So there is a political need as well." Many of the new immigrants are from mainland China, adding to around three-quarters of Singapore's population that is ethnic Chinese, with the rest ethnic Malay, Indian or overseas workers.

Singapore's economy has rebounded this year from its worst ever recession, but some analysts think unemployment could still risae next year. The unemployment rate among residents rose a five-year high of 5.0 percent in the third quarter.

Some investors are betting on a improving growth leading to tighter monetary policy next year and a stronger Singapore dollar, which the central bank manages in a policy band.

Economists said Singapore still had to address poor productivity, which data showed as falling 0.8 percent in 2007 and 7.8 percent in 2008, and to improve worker skills to move away from being beaten by lower cost centres such as Vietnam.

"We can't compete solely on the cost basis, relying on lower skill foreign workers to maintain our cost of production. It is not a long time solution," said Irvin Seah, economist at DBS Group in Singapore.

"The only way to stay ahead of the race is to embrace on innovation, improve the skill sets of our labour cost, and move up the value chain." 

SINGAPORE, Dec 3 (Reuters)