THE PLATONIC GUARDIANS NEED TO CONSIDER THEIR OWN ELECTORS
It is not only in the UK, the USA and the EU that politicians favour inward immigration. This idea has spread to the hard headed countries of South East Asia where Malaysia, Thailand and Singapore all now have large immigrant workforces, both legal and illegal.
The motivations appear to be the same as in the US and EU. The elites benefit from cheaper services, they own the capital which benefits from cheaper labour and their own jobs are largely protected from competition. Their own citizens are not in that favourable position. One of the interesting things about South East Asia is that the immigration problem is not sidetracked by bogus charges of racism used in the UK when the subject of immigration is raised.
As for Thailand, with an estimated two million migrant workers (Bangkok Post 28/10/07), the World Bank is, of course, a cheerleader and goes to great lengths to say that “immigration in the Greater Mekong sub-region’ does not affect Thai workers’ although a ‘recent poll showed the majority of Thai people believe that Thai workers have been hurt by the increase of illegal immigrants in Thailand.”
In Malaysia, the government is seeking to have it both ways. In the new investment zone in Johore Bahru, it is openly stating that much of the construction will be done by migrant workers but they will be segregated in special residential zones. Malaysian law requires police and medical checks and workers are not allowed to bring in their families. At the same time, responding to popular pressure, the government allowed the formation of People’s Volunteer Corps (RELA), a volunteer body to conduct raids in search of illegal immigrants with bounties for each arrest (the bounties have now been withdrawn).
However, it is in Singapore, with its relatively high income (median is £12,000 p.a.), tight border and efficient administration, that the theory of the benefits of immigration is being tested to destruction.
The non-resident population of Singapore has increased from 2.9 per cent of the total in 1970 to 19 per cent in 2006 (29 per cent of the labour force). The Singapore government now wants to increase this further with the Prime Minister, Lee Hsien Loong, declaring, for example, 20/08/06, “If we want our economy to grow, if we want to be strong internationally, then we need a growing population and not just numbers but talents in every field in Singapore” … “We have to welcome new immigrants. I know that some Singaporeans do not agree.”
He is certainly right there. Income spreads are widening among Singaporean residents, those earning below £4,000 p.a. increasing to 16 per cent of the total while those earning over £34,000 rising to six per cent. Singapore now has an income inequality profile similar to Guatemala or the Philippines.
The Straits Times reported 2/11/07, ‘If Singapore feels more crowded these days, it is. In fact, an influx of foreigners and runaway growth has seen a squeeze on infrastructure that is palpable to any resident who takes the MRT (railway), drives a car, needs a hospital bed or goes house hunting’. Office rents have doubled in three years.
The complaints are all familiar to readers of London’s Evening Standard. The government now proposes yet more immigrants by a new relaxation of immigration laws.
Singapore’s immigration policy does not seem to be founded on any reputable study of the benefits/disbenefits of immigration. Indeed the PM’s rationale of simply bulking up size is a throwback to the nationalist ideas of early twentieth century European politicians but singularly inappropriate for the fourth most crowded country in the world.
Singapore residents are not convinced. A poll (9/1/07) showed 52 per cent of Singaporeans wanted immigration to cease.
Yet on the face of it Singapore has a tough and properly enforced immigration policy. At present there are about 100,000 high skilled immigrants and 570,000 low skilled immigrants, the ones you see being driven about in the back of a lorry.
Rules are tough for the unskilled. They remain a transient workforce managed by a work permit system, a dependency ceiling which regulates the proportion of foreign to local workers and a foreign worker levy. They are not allowed to bring in their families and may not marry Singaporeans. There are stiff medical and police checks. Employers must post substantial bonds. Under the Singapore Immigration Act, illegal immigrants and smugglers face jail terms, fines and a minimum of three strokes of the cane (similar to Malaysia). There are hotlines for the public to report illegal migrants and employers and landlords must exercise due diligence or face imprisonment.
At the other end of the scale, highly skilled workers can bring in their families and are not subject to levies. However, the skill definition is quite low – the pay level is set at about £12,000 p.a. for the high skilled.
While such strict control may reduce the fiscal and cultural costs of immigration it has no bearing on the economic effects which are the usual ones of reducing the wages of competing labour and increasing returns to capital and competing labour. Additionally, the depressing balance sheet effect of greater numbers on existing wealth, capital and infrastructure per head remains high as the Strait Times indicates.
Further, a fresh supply of competing labour distorts the economy with capital diverted to industries in which Singapore does not have a comparative advantage. Industries which should die or mechanise are kept in being without being forced to modernise. The industries further down the demand curve of value enhancement are kept in being.
There is a lot of talk now about ‘two Singapores’.
As the Straits Times reports 13/11/07,
“At a deeper social level, the question of how the income gap will affect social cohesion does not go away. Inflation has a more painful impact on the lower income, as a higher proportion of their pay goes to food.
Foreign Minister George Yeo discussed social cohesion compellingly when he spoke of ‘two Singapores’ recently.
‘If we became two Singapores, there will be resentment’.”
In effect the budget of 2007 began to subsidise the incomes of over 45 year olds on low wages.
In short, intellectual confusion in the Singapore government’s attitude to immigration is leading to a spreading out of incomes. One wonders why this has not got through to ministers. The Lee Kuan Yew tradition of top down decision-making by an elite and encouraging political rule by the talented on the Platonic model is buttressed by the fact that Singapore government ministers are the best paid in the world. The Singapore prime minister has the world’s highest political salary.
What is the reason for their enthusiasm for immigration! They are not in the grip of an anti-racism crusade or chimerical multi-culturalism (they have got it already and are well aware of the problems).
It is simply two things. They are insulated from the problems of the voters because of their own incomes and, because they interact and exchange ideas with others, mainly business leaders in the case of Singapore, who are in the same position and they cannot see the damage their policies are doing to the poor.
FUTURUS/6 December 2007
The motivations appear to be the same as in the US and EU. The elites benefit from cheaper services, they own the capital which benefits from cheaper labour and their own jobs are largely protected from competition. Their own citizens are not in that favourable position. One of the interesting things about South East Asia is that the immigration problem is not sidetracked by bogus charges of racism used in the UK when the subject of immigration is raised.
As for Thailand, with an estimated two million migrant workers (Bangkok Post 28/10/07), the World Bank is, of course, a cheerleader and goes to great lengths to say that “immigration in the Greater Mekong sub-region’ does not affect Thai workers’ although a ‘recent poll showed the majority of Thai people believe that Thai workers have been hurt by the increase of illegal immigrants in Thailand.”
In Malaysia, the government is seeking to have it both ways. In the new investment zone in Johore Bahru, it is openly stating that much of the construction will be done by migrant workers but they will be segregated in special residential zones. Malaysian law requires police and medical checks and workers are not allowed to bring in their families. At the same time, responding to popular pressure, the government allowed the formation of People’s Volunteer Corps (RELA), a volunteer body to conduct raids in search of illegal immigrants with bounties for each arrest (the bounties have now been withdrawn).
However, it is in Singapore, with its relatively high income (median is £12,000 p.a.), tight border and efficient administration, that the theory of the benefits of immigration is being tested to destruction.
The non-resident population of Singapore has increased from 2.9 per cent of the total in 1970 to 19 per cent in 2006 (29 per cent of the labour force). The Singapore government now wants to increase this further with the Prime Minister, Lee Hsien Loong, declaring, for example, 20/08/06, “If we want our economy to grow, if we want to be strong internationally, then we need a growing population and not just numbers but talents in every field in Singapore” … “We have to welcome new immigrants. I know that some Singaporeans do not agree.”
He is certainly right there. Income spreads are widening among Singaporean residents, those earning below £4,000 p.a. increasing to 16 per cent of the total while those earning over £34,000 rising to six per cent. Singapore now has an income inequality profile similar to Guatemala or the Philippines.
The Straits Times reported 2/11/07, ‘If Singapore feels more crowded these days, it is. In fact, an influx of foreigners and runaway growth has seen a squeeze on infrastructure that is palpable to any resident who takes the MRT (railway), drives a car, needs a hospital bed or goes house hunting’. Office rents have doubled in three years.
The complaints are all familiar to readers of London’s Evening Standard. The government now proposes yet more immigrants by a new relaxation of immigration laws.
Singapore’s immigration policy does not seem to be founded on any reputable study of the benefits/disbenefits of immigration. Indeed the PM’s rationale of simply bulking up size is a throwback to the nationalist ideas of early twentieth century European politicians but singularly inappropriate for the fourth most crowded country in the world.
Singapore residents are not convinced. A poll (9/1/07) showed 52 per cent of Singaporeans wanted immigration to cease.
Yet on the face of it Singapore has a tough and properly enforced immigration policy. At present there are about 100,000 high skilled immigrants and 570,000 low skilled immigrants, the ones you see being driven about in the back of a lorry.
Rules are tough for the unskilled. They remain a transient workforce managed by a work permit system, a dependency ceiling which regulates the proportion of foreign to local workers and a foreign worker levy. They are not allowed to bring in their families and may not marry Singaporeans. There are stiff medical and police checks. Employers must post substantial bonds. Under the Singapore Immigration Act, illegal immigrants and smugglers face jail terms, fines and a minimum of three strokes of the cane (similar to Malaysia). There are hotlines for the public to report illegal migrants and employers and landlords must exercise due diligence or face imprisonment.
At the other end of the scale, highly skilled workers can bring in their families and are not subject to levies. However, the skill definition is quite low – the pay level is set at about £12,000 p.a. for the high skilled.
While such strict control may reduce the fiscal and cultural costs of immigration it has no bearing on the economic effects which are the usual ones of reducing the wages of competing labour and increasing returns to capital and competing labour. Additionally, the depressing balance sheet effect of greater numbers on existing wealth, capital and infrastructure per head remains high as the Strait Times indicates.
Further, a fresh supply of competing labour distorts the economy with capital diverted to industries in which Singapore does not have a comparative advantage. Industries which should die or mechanise are kept in being without being forced to modernise. The industries further down the demand curve of value enhancement are kept in being.
There is a lot of talk now about ‘two Singapores’.
As the Straits Times reports 13/11/07,
“At a deeper social level, the question of how the income gap will affect social cohesion does not go away. Inflation has a more painful impact on the lower income, as a higher proportion of their pay goes to food.
Foreign Minister George Yeo discussed social cohesion compellingly when he spoke of ‘two Singapores’ recently.
‘If we became two Singapores, there will be resentment’.”
In effect the budget of 2007 began to subsidise the incomes of over 45 year olds on low wages.
In short, intellectual confusion in the Singapore government’s attitude to immigration is leading to a spreading out of incomes. One wonders why this has not got through to ministers. The Lee Kuan Yew tradition of top down decision-making by an elite and encouraging political rule by the talented on the Platonic model is buttressed by the fact that Singapore government ministers are the best paid in the world. The Singapore prime minister has the world’s highest political salary.
What is the reason for their enthusiasm for immigration! They are not in the grip of an anti-racism crusade or chimerical multi-culturalism (they have got it already and are well aware of the problems).
It is simply two things. They are insulated from the problems of the voters because of their own incomes and, because they interact and exchange ideas with others, mainly business leaders in the case of Singapore, who are in the same position and they cannot see the damage their policies are doing to the poor.
FUTURUS/6 December 2007