Foreigners’ school fee hike: Economic implications

Singapore is taking new affirmative action to favour Singaporeans. They will get two chances instead of one to register their children in their favourite primary schools from next year. And school fees will more than double for permanent residents in 2011 while foreigners from outside Southeast Asia will have to pay one and a half times more. See this Ministry of Education chart.

 School_fees

While Singaporeans will continue to pay 11 Singapore dollars a month for primary school, permanent residents will pay 33 Singapore dollars (up from 14 and a half Singapore dollars), those from Malaysia, Indonesia and other Asean countries 196 Singapore dollars (up from 146 Singapore dollars), and other foreigners 256 Singapore dollars (up from 156 Singapore dollars). The fees will rise further in 2012 when permanent residents will have to pay thrice as much and foreigners more than twice as much as they pay now.

It's only fair Singapore should favour Singaporeans.

After all, it is Singaporeans who are called for national service on the principle they must be prepared to defend the nation.

One can only hope it will never come to that, for the outcome was devastating the only time war erupted on the island.

Singapore is a densely populated tiny city state 710 square kilometres in area and inhabited by 4.99 million people, which was quickly overrun by the Japanese in the Second World War, and there are much more potent weapons of mass destruction now.

Even peacetime national service puts lives in danger: conscripts have died in training. Singaporeans have to bear risks foreigners don't.

There is widespread resentment against foreigners in Singapore, who are seen as enriching themselves and enjoying the benefits of Singapore's excellent infrastructure without sharing the burden of defending the nation.

So the government has to address that resentment.

After all, Singapore is a democracy and every country gives preference to its own citizens.

But I don't think the government is trying to please the people simply because elections are coming.

The Singapore government always thinks long-term.

And what the new decision suggests, coming after the recession, is slower growth ahead for the Singapore economy.

Singapore may be favouring its own citizens because it no longer needs so many foreigners, because there are not enough jobs to go around.

Manpower Minister Gan Kim Yong said as much, reports Channel NewsAsia: "Over the next twelve months, we expect the employment market to remain more or less stable, but we do not see a massive recovery of the employment market."

The influx of foreigners and new citizens surged in recent years as the economy expanded rapidly.

But, as Prime Minister Lee Hsien Loong said in his speech at Nanyang Technological University on September 15:

We cannot expect to continue booming as in the last few years.

We permitted the surge in recent years to respond to an exceptional opportunity.

We always knew that we could not sustain this high inflow indefinitely.

Over the long term we do need to continue bringing in immigrants.

But we will always be mindful of how quickly our society can absorb and integrate the new arrivals.

The decision on school fees reflects this new line of thinking.

The mainstream media is saying more foreigners may now apply for Singapore citizenship.

But not everyone is likely to get it.

So this could be an ingenious selection process.

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