Should Hong Kong and Singapore relent from tight Covid-19 rules to retain foreign talent?
- The financial hubs, traditionally among the world’s most open economies, have kept Covid-19 from overwhelming their health care systems through self-imposed isolation
- But as frustrated foreign workers begin drawing up exit plans, questions have arisen about whether the authorities need to act to avoid long-term damage to their status
“Unless they drop all restrictions, drop all quarantine in the next two or three months, I’ll probably drop the apartment, and drop the office, and drop the employees and drop the company,” said Coyne, whose business – which he has been running from Malta since June last year – employed 15 people in Hong Kong at its peak.
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Currently, only citizens and permanent residents – who make up 71 per cent of the island nation’s population of 5.7 million – can leave and enter freely. The 1.23 million work pass holders, including professionals and executives, must obtain approval to re-enter, but the process has been suspended since last month due to a sharp spike in domestic cases and the emergence of new virus variants. Only workers in key strategic and infrastructural projects are exempted.
Zach, an American who has worked in Singapore’s legal sector for the past 10 years, said he had not seen his parents in the United States for two years.
“The desperation and frustration among the expats is starting to grow,” said Zach, who asked to be identified only by his first name. “It’s tough because you can’t see your family for a long period of time. This has been going on for longer than 12 months, now with no end in sight.”
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While many expatriates in the two Asian financial hubs are holding out hope for restrictions to be eased so there will be no push factors to leave the cities they have grown to love, others are mulling over leaving or drawing up exit plans.
An American businessman who has called Hong Kong home for 22 years, who asked to remain anonymous, expressed dismay over what he described as a government that appeared “disconnected from the population they should be serving”.
“It’s no longer acting like a cosmopolitan city, it’s acting like a second-tier Chinese city that’s afraid of its shadow,” said the businessman, whose work as a marketing consultant requires frequent travel around Asia.
“I mean if the mayor of Beijing or Shanghai acted like [Hong Kong Chief Executive] Carrie Lam is acting they’d be tossed out on their ear, because they understand not to challenge Chinese sovereignty – they would never think about doing that – but they also understand how to advocate for their population.”
He said he intended to leave Hong Kong once his young child had completed his first few years of schooling.
STEADY OUTFLOW OR EXODUS?
Mark Moorby, a lead partner at Hong Kong’s Danos Associates, which specialises in recruiting talent in the financial services industry, said more of his expatriate clients were looking to leave the city than at any period since he began working in the industry 15 years ago.
“I think there are a lot of people here who are conscious of the fact that if the borders don’t open up or if there isn’t a change in the next year, that they don’t think it’s going to be tenable to spend that extensive amount of time away from family without being able to travel back and see family more easily,” said Moorby, who described the border situation as the most immediate concern among his clients.
Jack Hoysted, CEO of Stirling Henry Global Migration, said his company had also seen a big rise in clients drawing up exit plans.
“It’s hard to be sure of motivations as often they are mixed,” he said. “The border situation, the unrest, the new laws, general uncertainty and the difficulty of travel in and out of Hong Kong are all factors.”
In Hong Kong, almost all arrivals must undergo hotel quarantine of between two and three weeks, depending on their country of origin.
Although it remains unclear exactly how many expatriates are making plans to leave or have left already, about 50,000 Hong Kong residents departed the city last year, contributing to a net outflow of about 40,000 people, according to official statistics, which include local and foreign-born residents and take account of non-permanent migration such as work and study.
Dozens of international companies also moved offices out of the city last year, which along with the pandemic-induced shift towards working from home contributed to a 15-year high in vacancy rates in the main business district Central.
In a survey undertaken by the American Chamber of Commerce last month, one in four respondents said they were considering relocating, with nearly two-thirds expressing concerns about the national security law.
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Singapore has also seen a reduction in its foreign workforce over the past year. According to its manpower ministry, the number of employment pass holders – those who earn at least S$4,500 (US$3,390) per month – fell by 8.6 per cent to 177,100 in December last year compared with 2019. The total foreign workforce, including domestic and lower-skilled workers, fell almost 14 per cent to about 1.23 million.
Hong Kong Chief Executive Lam has not laid out firm criteria for easing controls, but has indicated that a high vaccination rate, along with other measures, would be “beneficial to the reopening of borders”. On Thursday, Bloomberg, citing unnamed sources, reported the government was considering allowing most vaccinated travellers to serve just seven days in quarantine if they passed an antibody test, although no decision had been made on when the change might take effect.
Singapore, too, has said that it will ease restrictions based on the pace of vaccinations, but officials have said that the inoculation rate was not high enough to resume activities confidently. So far, 49 per cent of its population has received at least one dose, and 35 per cent have been fully vaccinated.
Officials had earlier said they aimed to have 50 per cent of the population fully vaccinated by August and 75 per cent by October, though these targets depend on whether supplies remain steady.
Residents of the city state generally support its stricter border restrictions, with some even calling for tougher measures when the more contagious Delta variant of Covid-19, which first surfaced in India, began spreading in the community.
In Hong Kong, where vaccine take-up among locals has been sluggish, opinion polls have shown mixed attitudes toward the government’s pandemic measures. In an April survey by the Chinese University of Hong Kong in April, 41 per cent of respondents said the current restrictions should be maintained, while one-third favoured their relaxation, although the poll did not refer specifically to border controls. Just under one-fifth of respondents said they supported tighter restrictions.
BRAIN DRAIN OR A TEMPORARY GLITCH?
The growing frustration among expatriates has raised questions about whether there could be long-term damage to the financial hubs’ status, and if authorities need to act.
Moorby of Danos Associates said he wouldn’t be surprised to see expats returning to Hong Kong once border controls relaxed, but the city would need a clear exit strategy from its isolation to continue luring overseas talent. “If people know when the situation is going to end and know what the plan coming out of it is, then it’s much easier for them to plan,” he said.
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A Hong Kong government spokesman said the authorities believed the city remained “the best place in Asia in which to invest, do business and live”.
“We have a safe and growing market with considerable potential and upside; we offer an unrivalled springboard to China and Asian markets; we have a growing reputation for innovation, creativity and entrepreneurial spirit; and our cosmopolitan character and cultural richness make Hong Kong a great place to live,” the spokesman said. “None of this has changed as a result of Covid-19 or the Hong Kong national security law.”
The spokesman also defended the city’s response to the pandemic, pointing out that it had avoided severe outbreaks and the stringent lockdowns experienced in many other places around the world.
“Our approach has worked well and served the best interests of all who live here,” he said, adding that the government remained committed to attracting foreign talent to aid Hong Kong’s long-term economic development.
Singapore’s manpower ministry and Economic Development Board did not respond to a request for comment. Anecdotal evidence, however, suggests that wealthy people from the region have seen the city state as a safe hideout from the pandemic in the past year, with some investing in homes, purchasing cars and even applying for residency.
Jo Bell Johnston, who relocated from Australia in 2019 when her husband landed a job with the Hong Kong cricket team, said she found the city to be full of opportunities.
“Two years on, I have a company here in Hong Kong and in Australia,” said Johnston, who operates a property consultancy. “We’ve seen this time as opportunistic on many levels and it’s our hope we can remain in Hong Kong for many more years.”
Walter Theseira, an associate professor of economics at the Singapore University of Social Sciences, said every country’s Covid-19 policy had largely been driven by domestic health, economic and political considerations.
In making these rules, he said, governments had subjected non-citizens to their rules more strictly, and they would likely have the lowest priority when it came to travel. “In my view, this is fair, given that the bulk of the costs, health and financial, for managing or failing to manage Covid-19 fall on each country’s citizens,” Theseira said.
He said non-citizens had a right to – and, if they could, would be quick to – flee to their home countries if Singapore failed to manage the pandemic. Citizens, on the other hand, had nowhere else to go. “So our first responsibility must be to our own citizens,” he said.
Even so, Theseira, who was a former Nominated Member of Parliament, said Singapore should be mindful of balancing the public health response with the realities of having a global, highly skilled workforce used to international travel.
“Singapore has marketed itself as a business destination offering connectivity to the world precisely to overcome our challenges of having a small domestic market,” he said. “There is a real risk that not being able to deliver on that expectation of global connectivity will erode Singapore’s competitiveness.”
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But Lawrence Loh, a business professor at the National University of Singapore, said it would take more than the current uncertainty over travel to result in a brain drain of foreign talent. He said Singapore’s measures were understandable given the fluidity of the virus situation globally.
The ebb and flow of foreign talent was driven by economic opportunities and a socially conducive living environment and if these were in place, “the brain drain would take care of itself”, he said.
Singapore and Hong Kong’s attractiveness for expats would be hard to replicate, Loh said, with one key factor being both cities’ use of English.
“It is natural that internationally mobile human talent will do their sums carefully in choosing the places of abode,” he said. “They may even swallow the bitter pill and wait out the restrictions if the reasons for staying put are compelling enough.”
Robert Chipman, Hong Kong CEO with the global relocation company Asian Tigers Group, said he did not believe the city’s allure was in free fall despite the “transitory” and “annoying” border situation and Beijing’s tightening control.
“As a financial centre, I think Hong Kong will continue to be OK,” said Chipman, who does not believe a major exodus is under way. “As a ‘world city,’ that may be more tenuous.”
