Singapore - party Singapore is renewed cut immigration pressure and increase social spending after the opposition made gains parliamentary Records by campaign for fewer workers foreign and higher wages.
Popular Action Party, which has kept an authoritarian grip in power for more than five decades, won 81 seats in the 87 Parliament Saturday elections. However, the six seats won by the Party of the workers are the most by the opposition since independence in 1965, and the PAP of the overall vote share fell 60 percent from 67% in 2006 and 75% in 2001.
The Government is likely to reduce the number of foreign workers to ease the discontent of the electorate on wages stagnate and overburdened public services, a move that could slow economic growth in coming years to between 3% and 5% by an average of approximately 8.5% between 2004 and 2007said Wei Zheng Kit, an analyst with Citigroup to Singapore.
PAP leaders have taken the results of the elections as a wake-up call. Prime Minister Lee Hsien Loong said his legislators spent the next few weeks "soul searching" and suggest certain policy would be changed, although he did not specify those that.
"Many voters, including some of those who voted for us, clearly expressed their concerns significant both on the issues and our approach to Government," Lee said Sunday. "We understand in the PAP that this election is a watershed election, and we have to adapt to this new situation."
The explosion of foreign workers began in 2005, the Government sought to diversify the economy of manufacturing into services such as tourism. About 150,000 foreign workers entered Singapore each year from 2007 to 2009, and they now account for about one third of the $ 3 million labor force the island.
Foreigners have helped to build and staff projects such as the first two stations Casino City State and largely provide cheaper, younger labor Singapore, ageing population and low birth rate.
However, ordinary Singaporeans complain that competition with foreigners was falling wages, boosted the prices of real estate and stuffy public transport. Singapore economy grew at a record 14.5% last year and the Government expects growth 6% this year, but many people complain that their standard of living is slippery.
The Government has begun to reduce the number of foreign workers last year already and will after the results of the election on Saturday, probably cut back more, said Irvin Seah, an analyst with DBS bank in Singapore.
"It could be more stringent guidelines for approval for work permits, the use of passes," said Seah. "Because this could restrict the flexibility of the Government to respond to the increase in demand for foreign labour more, it might be close to transition costs of the term in the form of slower, higher employment growth.
The annual inflation rate of Singapore was 5.0% in March, more than 3.3% in August.
The Government may take further action to the cool prices, which increased by 70% since 2006. Increase in government spending and subsidies for health care, education and retirees may also appear in the coming months, with a more progressive structure and income redistribution tax schemes, analysts said.
"We expect a renewed focus on the means to check the growing income gap," said Ho Wai Leong, an analyst with Barclays Capital in Singapore. "There is generally likely to be the most attention has focused on issues relating to the constraints to growth - namely, affordable housing, the influx of foreign workers and the quality of life for the"tight"middle income group.".
Some analysts expect that a stronger voice of opposition in Parliament give more discussion and a policy development process more strict.
"A greater accountability and the diversity of views may result in better policies,", said Kit. "Measures to increase the average household income can help to promote more balanced, and private consumption less volatile growth model."
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