I'm doing an essay on this. So might as well blog about it. Short one ah.

So free trade contributes alot to economic success. However, Singaporeans are feeling the pinch of free trade especially in the service sector aka manpower/labour. It's not really a free trade, but the essence of free trade is there: the ease of bringing in foreign imports(manpower) in the name of comparative advantage. Comparative advantage?

Basically, it is just trading a specialised service or commodity with a another country. It minimises the costs and effects of producing that 'another' commodity locally. Where manpower is concerned, it is not really a free trade as the trade is not of a service-to-service trade but a service-to-money trade. In local terms, the trade of manpower has little barriers which is what free trade is all about.

The trading of manpower is a fragile trade as humans are not an emotionless product. We may enjoy low cost due to the trade of low-cost workers, but the local labour force(which is Singapore's main or arguably the only resource/service) suffers due to the dumping of cheap workers. Undeniably, it affects the wages across industries. The domino effect of trading cheap labour resulted in the revised wages by employers to meet the par-value of these foreign workers.

To cut it short, I believe the cabinet should bring about a stronger policy in the name of protecting our local manpower. The current policies may have the same intent, but, it is easy for employers to go around it and employ the cheaper option: foreign workers.

The main problem that will arise when our government control the manpower and employ higher waged local workers will be a higher cost of living. I believe that the cost of living can be overcome by a well managed trade, not only in service sector but in other different sectors too.

Managing all trade tightly may result in further inflation such as the one which sparked the Great Depression. A well managed trade, which also supports free trade, is the way to go. The question now is, economic success or socal peace?