Effects of Regionalisation

1. Introduction

Acknowledging the fact that future growth will depend on overcoming resource scarcity and a small domestic market, the Singapore government has been strongly encouraging local firms to regionalise their operations and invest abroad. This report discusses some of the social and economic downsides brought about by the regionalisation strategy.

2. Regionalisation – Intent Of The Government

Singapore’s scarceness in resources i.e. land & labour as well as its undersized domestic market are the major drives for regionalisation. The rationales to propel Singapore’s economy beyond her shores are as follow.

Boundless Boundaries

Markets and workplaces are no longer limited by boundaries and distance. Capital is free to move to where it can generate the best returns. While our neighbouring countries gear up and build up, our competitiveness is eroded due to our high operational cost and unattractive domestic market. Many jobs are lost for good as business activities shift to these countries where operational costs are much lower e.g. for labour intensive industries. Also, the small consumer market here hinders the potential of local retailing industries unfavourably. On the other hand, the region offers far better returns for all.

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Economic Growth

The United States and Europe have all along been our traditional markets. In view of this dependency, the slowdown of economic growth rates in these matured economies invariably puts a brake on Singapore’s economy. Consequently, we have to look towards the up and coming Asia-Pacific region where growth rates are in double digits, no doubt due to its low base. But it offers vast opportunities for Singapore’s produce to be a part of them and to grow with them.

Mutual Benefits

Regionalisation looks beyond the borders to tap and leverage on one another’s strengths. This constitutes a win-win situation.

• Wider exposure & cultural diversity of people
• Expanded networks and contacts with international businesses, clients & talents
• Larger job market where career is not confined to local employment opportunities
• Healthier relations with affiliated countries through mutual beneficial trade

3. The Family Pays For Regionalisation

It is believed that while regionalisation brings us good, it will and is going to upset the family ties of Singaporeans in one way or another.

The Children

One major hurdle that deters Singaporeans who are married with children from taking up jobs overseas is their concern about their children’s education. Parents expressed concerns over the child’s resistance and adaptability to foreign curriculum system, possibility of racial discrimination in foreign schools, denial of foreign education credentials in future and loss of emotional ties with Singapore. Nonetheless, measures are taken to resolve these concerns:

• Singapore International Schools: Simulating home-style schooling environment abroad with parallel curriculum including Mother Tongue
• Leave of Absence Scheme: Entitling previous students to rejoin their former schools upon returning home
• Flexibility in Admission Criteria: Recognising foreign examination scores and conducting in-house examinations and interviews for admittance decisions
• CAMP SINGAPORE: Assembling overseas Singaporeans’ children back home to live through Singapore’s all-embracing way of life in a good fun & educating manner
• Abolishment of Monetary Bond Requirement: Encouraging males (> 11 years old) to follow their parents abroad to foster family cohesion & promote regionalisation

The Wife

The regionalisation policy seems to have become one that helps men more than it does women. Findings of a study have shown that the careers of many women ended on the backburner because of the country’s regionalisation drive. Women get locked into the stereotypes of being only mothers and housewives.

The Marriage

Findings of the study have revealed that 148 out of 150 spouses felt neglected when the other heads overseas to work. More than 75% of them fear the problem of extramarital affair. Furthermore, research has shown that a disillusioned family returns in spite of all preparatory measures taken by the family e.g. pledging to call/visit one another often, to stay faithful etc. E.g. A top manager resigned, choosing his marriage over his career and another who did the exact opposite and as a result suffered a broken marriage.

4. The Country Pays For Regionalisation

To begin with, let us understand that regionalisation implies the occurrence of a two-way flow of expertise between a sending country and a receiving country. When the inflow is greater than the outflow, we say there is “Brain Gain”. Conversely, when the outflow is greater than the inflow, we say there is “Brain Drain”.

Some Reasons For The “Brain Drain” Phenomena

• Economical reasons e.g. better job development prospects, lower cost of living, higher disposable income
• Political & Legal reasons e.g. less restrictive & dominative grounds
• Social reasons e.g. stress-free work, education & personal lifestyle, creative & self-interest development space
• Physical & Natural reasons e.g. ample cheap resources (land, labour, raw materials etc.), seasonal climate, picturesque landscapes

The Undesirable Repercussion

The phenomenon has weakened the country’s choice and pool of talents harshly. Given our diminutive population, we have no surplus of talents. This will in turn upset our competitiveness, economic potential as well as unbalance our mix of population e.g. Singaporeans versus PRs, aging population etc.

In a way, we have flattened our own pyramid of talents with our own hands by encouraging the dispersal of Singaporeans. Many of our best now contribute to others’ economies permanently instead of returning to Singapore. They are only thinking, worrying and creating wealth for foreign lands. This is the facet of regionalisation that we need to reflect on and address (Goh Chok Tong, 1997).

“Go Regional, Stay Local” Approach

It is crucial that overseas Singaporeans are tied to Singapore strongly by helping them to stay in touch with us. The setting up of Singapore International Foundation, Singapore International Schools, Singaporeans Overseas Programmes, over 85 Singapore Clubs and the regular monthly SINGAPORE magazine are efforts paid out to preserve the Singaporean identity and the sense of national belonging of overseas Singaporeans (Lee Hsien Loong, 2003). Other efforts include giving overseas Singaporeans voting rights e.g. the recent GE 2006 in Shanghai, home-stand assistance in times of emergency e.g. evacuation from Cambodia & Indonesia during those troubled times and welcoming them back by helping spouses to find jobs & children to schools in the re-entry stage.

5. Foreign Talents Policy

The policy aims to attract two groups of foreigners. It also covers transient low-skilled workers who will have to leave after a period of time. The first group refers to the crème de la crème of talent. Sought by countries all over the world, they include neurosurgeons, top-notch scientists, professors, sportsmen etc. Examples include table tennis player: Li Jia Wei from China, CEO of DBS Bank: John Olds from America etc. The other group refers to qualified young people who meet several objectives e.g. lab technicians, nurses, IT personnel, multi-skilled or experienced persons etc.

Population Distress

Statistics show that more than a quarter of the people in Singapore are foreigners (PRs and non-residents). In 1990, our population numbered 3.05 million. It has since jumped to 4.02 million with the gap mainly attributed to the increase of foreigners. As such, Singaporeans now make up approximately only 74% of the population size compared to 86.1% ten years ago.

Importing Foreign Talents

The rationale behind this is fairly apparent. Foreign talents are needed to boost the economy, create jobs and strengthen the country’s competitiveness (Goh Chok Tong, 2003). Singapore’s small population cannot produce enough talent; what’s more when the “Brain Drain” phenomenon is mounting (Lee Kuan Yew, 2003). Foreigners are needed. America has been a top-notch marketplace for ideas owing to its readiness to welcome foreigners into all industries. The Singapore government wishes to emulate this example as well. Reasons for importing foreign talents include:

• Fill in jobs which Singaporeans lack the expertise in or that we do not want to do
• Promote healthy competition among foreigners and locals, motivating locals to work harder & upgrade their skills to compete on fair grounds
• Encourage fruitful diversity in creative thinking and value-adding innovation

For instance, out of the 32 Chairmen of Statutory Boards, 12 were born outside Singapore and in the Singapore Symphony Orchestra, 51 out of the 87 musicians were foreign born. Many ministers were also born overseas: Goh Keng Swee (Malacca), Rajaratnam (Ceylon), Toh Chin Chye (Taiping), Hon Sui Sen who joined later was from Penang. Without this inflow, Singapore could never have made it, let alone become what it is today.

Nonetheless, many Singaporeans have raised questions over the following issues:

• Managerial positions and those of good pay & benefits are taken up by expatriates
• Fear of “second-class citizen” treatment
• Nepotism over fellow foreigners, unfair gap in disposable income (foreign exchange difference) etc.

6. Regionalisation – In Mandarin

Our government has identified China, in addition to India and ASEAN nations, as the direction to our regionalisation strategy. In 20 years’ time, China will be the second most powerful nation in the world after the U.S. & probably the world’s largest economy. Many non-Chinese will see the advantage of learning the Chinese language to do business in China. Therefore we must find ways to sustain a high level of proficiency in Mandarin in the Singapore. We have to reproduce a core group of Singaporeans who are steeped in and knowledgeable about the Chinese cultural heritage, history, literature, and the arts (Goh Chok Tong, 1991).

7. Conclusion

We agree that regionalisation is today no longer a choice but very much a necessity. But as we encourage the dispersal of Singaporeans, there is a possibility that we are disposing them for good as our pyramid of talents gets flattened, family gets disillusioned and foreign talents gets within. If Singaporeans are not deeply rooted to Singapore through strong bonds of family, friends, community and nation, the core of our nation will be shattered. In a nutshell, regionalisation has a world of opportunities & yields to offer to all of us as long as we fulfill our individual and collective rightful obligations with utmost virtuousness.