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Thread: Foreigners in S'pore

  1. #1
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    Default Foreigners in S'pore

    http://www.straitstimes.com/Breaking...ry_328492.html

    Jan 20, 2009

    Foreigners in S'pore

    200,000 may leave


    SINGAPORE'S population may shrink in the next two years as 'sizeable' job losses amid the city- state's deepest recession force 200,000 foreigners to leave, Credit Suisse Group said in a report on Tuesday.

    About 300,000 jobs may be lost by 2010, two-thirds of which are held by foreigners and permanent residents, economists Cem Karacadag and Kun Lung Wu wrote in the report, according to Bloomberg news.

    The number of people in Singapore may fall to 4.68 million by 2010 from 4.84 million now, Credit Suisse said.

    Companies in export-dependent Singapore are firing workers as demand for goods and services ebb. More than 10,000 people were retrenched last year and a worsening economy may result in job losses tripling in 2009, reaching numbers not seen since the Asian financial crisis a decade ago, the government said.

    'The contraction in exports and output and consolidation in financial and business services could lead to sizeable job losses, which, in turn, may drive as many as 200,000 foreigners and permanent residents out of Singapore,' the economists said.

    'These levels of job losses and population decline would be unprecedented.'

    Singapore's economy may shrink 2.8 per cent this year, Credit Suisse predicts, making it the nation's worst annual contraction in its 43-year history. The government says gross domestic product may decline as much as 2 per cent.

    Last week, the National Wages Council, which represents government, employers and union groups, advised companies affected by the deepening economic slump to freeze or cut pay rather than fire workers.

    Fewer births

    About 30,000 workers were retrenched in 1998 and some 26,000 lost their jobs in the 2001 downturn, acting Minister for Manpower Gan Kim Yong said in Parliament on Monday.

    Immigration is a key component of Singapore's population strategy, as incentives offered since 1987 to arrest a declining birth rate by offering tax breaks, subsidies and cash bonuses failed. Singapore, a quarter the size of Rhode Island, has no natural resources and the government relies on the skills of its populace to generate economic growth.

    The nation's population jumped 17.6 per cent in the five years to June 2008, and foreigners made up three-quarters of the increase, the Credit Suisse report said. Foreigners and permanent residents filled 61 per cent, or 484,700, of the 796,000 jobs created between 2004 and the third quarter of 2008, the analysts estimated.

    Singapore's employers added more than 435,000 workers to their payrolls in the seven quarters to September 2008, according to the Ministry of Manpower.

    'Harsh assumptions'

    'As harsh as our assumptions may seem, they only imply that the economy gives up all of the jobs it created in 2008 and a portion of the new jobs in 2007,' the economists wrote.

    About 160,000 positions in the services industry may be lost, while manufacturers may fire 100,000 workers, Credit Suisse predicts. The construction industry may cut 40,000 workers, it said.

    'The potential drop in employment and population would have far-reaching implications for the economy,' wrote Credit Suisse analysts Sean Quek and Kwee Hong Ching. 'Private consumption could contract in both 2009 and 2010.'

    The unemployment rate, at 2.2 per cent as of September 2008, may rise to 5.6 per cent by 2010, the highest in more than two decades, they said.

    Job cuts rose 'significantly' last quarter, and both unemployment and layoffs are expected to be 'substantially higher' in 2009, the National Wages Council said last week.

  2. #2
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    Default Many foreigners tipped to lose jobs

    http://www.businesstimes.com.sg/sub/...15238,00.html?

    Published January 21, 2009

    Many foreigners tipped to lose jobs

    Credit Suisse estimates number could reach 200,000

    By TANG WEN EN


    EXPECTED job losses will trigger a big drop in the number of permanent residents (PRs) and foreigners in Singapore, says Credit Suisse, estimating that the figure could rise to 200,000. And this will have a ripple effect on the economy, causing private consumption, employment and the property market to slide.

    Of the 546,700 foreigners and PRs (which include foreign construction labourers) who moved to Singapore between 2003 and 2008, 89 per cent filled new jobs here. Losing these jobs would give them little incentive to remain.

    In the services sector, Credit Suisse (CS) analysts reckon 50,000 jobs will be lost by foreigners and PRs this year and a further 50,000 next year. This equates to 40.5 per cent of the 247,000 services jobs filled by foreigners and PRs between 2004 and the third quarter of 2008.

    Projections are similarly bleak for manufacturing, where CS forecasts the loss of 50,000 jobs in 2009 and 20,000 in 2010. This equates to 42.6 per cent of the 164,400 new manufacturing jobs filled by foreigners and PRs from 2004 to Q308.

    In construction, 30,000 jobs filled by foreigners and PRs are estimated to be lost in 2010, a 40.9 per cent loss of jobs that were created from 2004 to Q308.

    Job losses in the various sectors can be attributed to Singapore's skills dependency. The country's natural resources are scarce or non-existent and the economy is fuelled by people. As the global economy slows, fewer imports are consumed and fewer exports are demanded, reducing the employment needs of companies engaged in either.

    Consolidation in financial services and business services, says CS, could also contribute to significant job losses in the services sector.

    CS acknowledges that these estimates might seem harsh, and reasons that employment would still be above what it was at the end of 2006; the figures only indicate that the economy will lose as many jobs as it created in 2008 and a portion of the new jobs in 2007, which would be consistent with the fall in real output to a level between 2006 and 2007.

    CS also expects departures to follow job losses with a few quarters' lag, which could ease a possible shock in the fall of the population.

    CS says the exit of foreigners and PRs could cut the island's population by 4 per cent. And this will take a big bite out of the residential property market. It expects a 40 per cent drop in prices from their 2008 peak, as vacancy rates rise to an unprecedented 15 per cent. Additionally, the fall in capital values will make homeowners feel worse off, causing them to cut back on consumption.

    According to CS research, the average pay in the services industry is higher than that in the manufacturing and construction industries, particularly in financial intermediation, where average monthly earnings were $6,768 in 2007, as compared to the average of $3,764 in manufacturing and $2,646 in construction. Job losses in services would therefore result in a more than proportionate fall in private consumption.

    Furthermore, as foreigners and PRs leave, they will take their spending power with them, sparking a possible 1-2 per cent cut in consumption growth in 2009 and 2010.

    The Singapore government is unlikely to create incentives for people, especially foreigners and PRs, to buy property, after ruling out measures to ease the housing slump, says CS.

    According to a recent report by Citi Investment Research, tomorrow's Budget is unlikely to reinstate a deferred payment option for property.

    Furthermore, Prime Minister Lee Hsien Loong has said the Budget is designed to 'protect jobs' and will 'introduce measures to help (viable companies) with their business costs'. As a result, Citi reckons any measures on property will likely focus on the commercial and industrial segments, not residential.

    Singaporean citizens are not spared from the crunch. CS estimates that 100,000 of the jobs filled by Singaporeans from 2004 to Q308 might be lost, increasing the unemployment rate to 5.6 per cent from its relatively low 1.9 per cent in Q3 2008. It would be the highest level since 1986, where it peaked at 6.5 per cent.

    In order to ease unemployment, the government has plans to hire 7,500 new teachers and 4,000 healthcare workers. However, CS believes that the government sector will probably be unable to expand by much.

    And while the integrated resort (IR) projects might create up to 30,000 jobs in 2010, CS reckons that this would not substantially change market conditions for foreigners and PRs, not compensating for the predicted population loss.


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    Default

    http://www.straitstimes.com/Money/St...ry_328784.html

    January 21, 2009 Wednesday

    Credit Suisse predicts 300,000 jobs on the line here

    By Robin Chan


    A NEW Credit Suisse report has predicted that an astonishing 300,000 jobs could be lost in Singapore this year and next.

    Most of the workers to lose jobs would be foreigners, who would then have to leave the country, leading to a drop in Singapore's population, it said.

    But other economists and industry body heads say the Credit Suisse figure is extreme, even in an unprecedented crisis such as this one.

    Monday's report was written by Singapore-based Credit Suisse economists Cem Karacadag and Kun Lung Wu. They estimated that, notwithstanding government action, a deep, economy-wide recession will mean that 160,000 jobs could be lost in the services sector, a further 100,000 from manufacturing and about 40,000 in construction over this year and the next.

    Most of the job losses would be from the 725,000 new jobs created over the past five years which were taken mainly by foreigners, who make up a quarter of the population here.

    'As harsh as our assumptions may seem, they only imply that the economy gives up all of the jobs it created in 2008 and a portion of the new jobs in 2007,' they wrote.

    Of the total, 200,000 would be foreigners and permanent residents who, if they leave Singapore, would reduce its population by around 160,000, after accounting for births, to 4.68 million.

    The drop in population would have serious implications for any economic recovery as it would lead to a fall in private consumption, a surge in unemployment to 5.6 per cent in 2010 - it was 2.2 per cent in September last year - and a plunge in residential property prices.

    The job losses would represent a reduction of about 10 per cent of Singapore's workforce of just under three million. By comparison, the Asian financial crisis of a decade ago led to job losses of over 30,000, or about 1.4 per cent of the workforce.

    However, other economists say the numbers are far too bearish, even given the severity of the global crisis.

    OCBC economist Selena Ling said: 'The socio-economic implications of that would be severe... The figures discount the Government policy responses which would kick in before we get to that stage.'

    CIMB-GK economist Song Seng Wun said: 'Our labour growth has been well above trend...so job losses of that magnitude are not unimaginable.

    'But the Government has indicated that it is willing to dip into the reserves, and it has shown a strong response to the crisis right from the word go.'

    Still, they believe that in a worst-case scenario, job losses here could reach 100,000.

    President of the Singapore Manufacturers' Federation Renny Yeo also disputed the Credit Suisse numbers. He said Singapore has seen growth in higher-end manufacturing industries such as biotechnology and renewable energy, which are not as susceptible to a dip in consumer demand. The manufacturing sector employs about 230,000.

    The Credit Suisse report comes just days before the Budget, which will set the tone for how the Government plans to tackle a worsening recession. In Parliament on Monday, ministers faced questions from MPs over the job market. Acting Minister for Manpower Gan Kim Yong said that job losses this year could exceed 30,000, while Minister for Trade and Industry Lim Hng Kiang said more than 30,000 new jobs would be created this year.

  4. #4
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    Default Many foreigners tipped to lose jobs Credit Suisse estimates number could reach 200,0

    What will happen to rental? This impacts the property prices in their yields. and therefore the impact on property stocks? If this is true, I'd cut out all the profits and run. and wait to buy back at a much cheaper price?

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