A few days ago Alex Au put up a blog post entitled “ASEAN single market and the free movement of skilled labour”. He mentions my previous post on this subject, “Have Singaporeans Woken Up to the Implications of the ASEAN Agreement on Free Movement of Labour?”. In it I warned that  though the agreement looked fairly innocuous this was potentially a serious threat to the wages and working conditions of our PMETs particularly when there were none of the standard employment protections and minimum wage legislation standard in other countries at comparable stages of development.

Alex is not as worried as I was. He has certainly done a very thorough job and had much more patience me to go through the agreement and quoting the definitions used in the agreement and showing how these serve to restrict the rights of companies to bring in cheaper workers from other ASEAN countries.  He also points out some loopholes that serve to undermine even the limited voluntary job protections we have. Ultimately even he admits to battle fatigue at the “mind-numbingly complex” texts and says he “didn’t have the patience to keep slashing through the thicket.”

I had pointed out that “While permanent rights to work in other member countries are excluded the fact that free movement is extended to Contractual Service Suppliers and Intra-Corporate Transferees means that the bar to stop businesses bringing in cheaper PMETs from other ASEAN countries is set very low.”

Alex quotes the definition of Contractual Service Supplier given in the Agreement:

Contractual Service Supplier means a natural person who is an employee of a juridical person established in the territory of a Member State which has no commercial presence in the territory of the other Member State where the services will be provided 

and who comes here, for example, to “supply a service temporarily pursuant to a contract”.

and of Intra-Corporate Transferee:

Intra-Corporate Transferee (ICT) means a natural person who is an employee of a juridical person established in the territory of a Member State, who is transferred temporarily for the supply of a service through commercial presence (either through a representative office, branch, subsidiary or affiliate) in the territory of another Member State, and who has been an employee of the juridical person for a period as may be specified in the Schedule of Commitments, and who is…

Alex goes on to quote the definition of “temporary” in the Agreement:

Temporary Entry or Temporary Stay means entry into or stay by a natural person covered by this Agreement, without the intent to establish permanent residence.

And Article 4(1) of the Agreement which states:

Each Member State shall, in accordance with that Member State’s Schedule of Commitments in ANNEX 1, grant temporary entry or temporary stay in accordance with this Agreement to natural persons of another Member State…

Frustratingly the ANNEX is absent (is this just an oversight or a deliberate attempt by unelected bureaucrats and the PAP to stop us finding out what our government has signed up to without us knowing?).

However Alex is able to find out the definition of “temporary stay” in the Singapore context from a research paper by the Jakarta-based Economic Research Institute and other agreements Singapore has signed, including the ASEAN-Australia-New Zealand Free Trade Agreement and the ASEAN Framework Agreement on Services. Under these Singapore has extended an initial two-year stay to Intra-Corporate Transferees though as stated under Singapore’s 8th Package of Commitments:

Entry for these intra-corporate transferees is limited to a two year period that may be extended for up to three additional years each time for a total term not exceeding eight years.

That would seem more than long enough to pose a considerable threat to wages and employment prospects of our PMETs particularly as, as Alex Au points out, ICTs do not even have to go through the toothless Fair Consideration Framework which was set up by MOM to pay lip service to the fears of Singaporeans that they are being subjected to unfair competition in the labour market. Another loophole is that ICTs do not even need to come from a branch or a subsidiary but from an “affiliate”. 

While one safeguard is that ICTs need to have worked at the branch, subsidiary or affiliate for a year before they can be considered for transfer to Singapore, this is worryingly lax. Any large employer could set up a recruitment subsidiary or use an affiliated recruiter to put trainees on its books for a year before the employer can bring them in freely under the ICT route.

Alex Au mentions that I had drawn attention to the Mutual Recognition Arrangements which so far cover eight professional categories: engineers, nurses, surveying service providers, architects, accounting service providers, medical practitioners, dental practitioners, and tourism professionals. This is another potential Trojan Horse since it allows anyone with a degree from a recognised ASEAN educational institution in these categories to qualify either under the Contractual Service Supplier or the ICT route or even more straightforwardly via the S-Pass or Employment Pass route.

While I agree with Alex that free trade and the international division of labour is generally a good thing, we need safeguards for our own skilled and not-so-skilled workers from erosion of their wages and working conditions by workers from countries much poorer than ourselves. While theoretically we can all be better off from free trade this assumes that there is a mechanism to compensate Singaporean workers if they are laid off. But the PAP has set its face completely against any protection for Singaporean workers. We have no minimum wage, no anti-discrimination legislation, no employment protections. The Fair Consideration Framework seems to be disregarded completely now. A foreign journalist whose newspaper has extensive operations in Singapore told me they were not even asked whether they had advertised the jobs to Singaporeans when they brought in two new expatriate hires.

Even in the UK with a minimum wage and much better safeguards for workers there was widespread unhappiness over the much greater than expected influx from Eastern Europe that that the then Labour Government completely miscalculated. There was a much smaller gap between wages in Eastern Europe and the UK than there is between Singapore, Indonesia, the Philippines, Burma, Vietnam and Cambodia. Despite the safeguards, the UK has become very much a low-wage low productivity economy like Singapore since 2008.

Finally I would wholeheartedly agree with Alex that this Agreement is being imposed on Singaporeans in an anti-democratic manner:

What I find troubling is that there has been a democratic deficit in the process of reaching these agreements. This tangle of agreements has been reached in backroom deals among Asean politicians. Locally, there has been little more than the occasional announcement in the mainstream media, dutifully trumpeting the government’s spin, with virtually no searching questions asked. The lack of enough opposition in parliament means another opportunity for scrutiny missed.

I don’t think I am the only one who has to do a couple of hours of websearch to understand just the brief details I have presented here. Most Singaporeans, I’d reckon, have little idea that these treaty instruments have been signed and are on their way to implementation. Their effects however, will not always be hidden. When people start noticing, they are likely to be controversial. As the paper by the Economic Research Institute for Asean and East Asia noted, “some countries have started to become concerned over the ‘free flow of skilled labour’.”

Alex Au says it is better to have an honest public discussion and convince the public ahead of signing the agreements than to scramble, hide and backtrack on policies (causing much business uncertainty) when controversy erupts? 

However he is far too naive about the way the PAP works. There is unlikely to be any backtracking just relentless spin in the State media about the benefits of the deal and a few carrots tossed to appease particularly troublesome opponents who cannot be cowed or intimidated. That is why in my last blog I said that up till now Singaporeans have behaved like turkeys voting for Christmas.

The ability of the PAP to ride roughshod over the people and completely disregard democracy is what anti-democratic and elitist bureaucrats in the EU and multinational institutions like the IMF, World Bank and ASEAN like so much about Singapore. Christine Lagarde, the head of the IMF,  loves Tharman and called him a “rockstar” because whenever she wants $5 billion or more he will deliver the goods. She need not worry about niceties like Parliamentary approval or democratic processes. No matter that Singaporeans go without free education, health care, child allowances or an old age pension that voters in other rich countries, including her own, take for granted!

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam