By Chuang Peck Ming

The government faces a dilemma: should it go for maximum economic growth and accelerate the inflow of foreign workers and talent, or should it accept slower growth and slow down the inflow?

The answer lies somewhere in between. But Senior Minister Goh Chok Tong acknowledged yesterday that it would not be an easy balance to achieve.

'For when growth slows down, so do the incomes of Singaporeans, while the cost of living may rise,' he said in a keynote address to kick off the three-day Singapore Human Capital Summit conference.

'Moreover, many Singaporeans may lose their jobs,' Mr Goh said. 'But if the government goes for growth, Singaporeans have to accept the increasing social costs of a growing foreign population in their midst.'

He noted that immigration policy 'is potentially even more controversial than trade policy' in many countries. 'Unlike nameless production workers who live many thousands of miles away, guest workers are often seen as directly taking away jobs from locals. So governments are often forced to restrict the much-needed inflow of talent and foreign workers, at the expense of economic growth.'

Countries in need of foreign manpower must manage the political friction that can arise from the presence of large numbers of foreign workers, according to Mr Goh.

While Singaporeans may be more at home than most countries with foreign workers - partly because of Singapore's history as a nation of immigrants - it is still important for the government to recognise Singaporeans' anxiety and fear of foreigners taking their jobs, and places in schools and universities for their children, he said. 'These are legitimate concerns that governments must deal with.'

Regardless of how this dilemma is fixed, the government's policies must continue to make Singaporeans feel that it's worthwhile for them to be Singaporeans, Mr Goh said.

They must therefore continue to enjoy benefits which foreigners do not - significant subsidies for public housing, education and health, and various top-ups from government budget surpluses.

But these benefits offered to Singaporeans do not amount to a policy to disadvantage foreign talent, he said. Welcoming foreigners remains one of two key planks of Singapore's strategy to build human capital and talent - and human capital is even more critical in these uncertain times.

The other plank is to develop Singaporeans to their fullest potential, Mr Goh said.

Singapore's talent strategy is simple, he said. The real challenge is in its execution - and there are three thrusts to it: heavy investment in developing Singaporeans, from the young to adults; building Singapore into a distinctive global city to attract and retain talent; and making Singapore 'cool and funky' for creative and entrepreneurial types to live in.

This article was first published in The Business Times on October 23, 2005.