Singapore (CU)_ In recent months, the Southeast Asian country has tightened its policies regarding the recruitment of overseas workers, on whom the country relies heavily in the majority of sectors, even as economists from Morgan Stanley and Maybank Investment Banking Group cautioned that labor shortages could exacerbate the inflation rate that reached decade-high in March.
As a result of the pandemic-induced downslide in foreign workers and a relaxation in virus restrictions, Singapore is experiencing its biggest labor crisis in over two decades. Hence, the government urged the businesses to recruit more local workers. Last month, Maybank economists Chua Hak Bin and Lee Ju Ye said in a research note that the government may need to examine its rigorous foreign labor rules to combat cost pressures.
Tan See Leng, the Manpower Minister, stated in parliament on Monday that while some industries, like construction, have witnessed a recovery in the number of foreign workers to more than 90 percent of pre-Covid levels due to the easing of virus restrictions, other businesses experiencing labor shortages should make use of the available sources of local labors to strengthen their manpower core.
Tan spoke about the country’s reliance on foreign workers. He said, “We expect labor market tightness to ease in the coming months as non-resident employment rebounds following significant relaxation of border restrictions”. He added, “Still, given the uncertainties in the global geo-political and economic environment, over-reliance on foreign workers will leave businesses vulnerable to disruptions.”
According to Tan, outward-oriented businesses such as Information & Communications and Financial Services continue to have numerous job openings. He stated that businesses may recruit around 5,200 individuals who are currently serving in temporary pandemic-related positions such as enforcing social separation and giving vaccinations, as their contracts expire in the coming months.