Careers
Blurring the causeway
Singapore-Malaysian border could be ‘erased’ by global movement of careers and ideas, says British blogger.
Jan 8, 2007

First blog by Erik (London)
Dec 23, 2007
I have recently been thinking of taking up a contract or a permanent position in Singapore. Now, Singapore's salary rates for skilled labour are definitely at par with Europe or North America.

I have noticed that salary rates for tradable skills and services are converging to the same points all across the globe. So, if you are making more or less the same amount of money for doing the same job, where should you go?

Even though salary rates are converging, taxation rates and house prices are not.

Singapore's maximum tax bracket of just 22% does stand out. There seems to be an additional old day’s pension scheme as well, but you are allowed to use it to buy your house, and they do capitalise your money inlays, and they do pay out the returns you make on the assets you invested it in.

It is not a bad savings scheme. It is surely not some kind of everybody cross-subsidises everybody else, a kind of rip-off you will find in Europe or in the USA.

Those schemes are preposterous. Why should I cross-subsidise a bunch of Germans and not a bunch of Bolivians? Or a bunch of Nigerians? Or a bunch of Burmese? Or a bunch of inhabitants from the planet Mars?

Of course, I think charity is commendable. And I may need it myself some day, so I do not mind being charitable.

But then again, I want to choose by myself whom I am going to be charitable to. Being charitable in Europe is totally insane. They think that foreigners are "lucky" to pay their exorbitant tax rates.

Most Europeans are totally ignorant of the fact that the Asian middle class has much better standards of living than their middle class.

It is not a "privilege" to get ripped off for the best part of your income.

I currently work in London, paying 40% tax in the maximum bracket with another 10% social security on top of that. Just try the calculation with tax code 503L.

The tax code has to be "computed". That is how complicated their crap is. Most of the counter-parties I work with are in other offices, in multiple different time zones.

We mostly communicate by email, even though we occasionally call each other on the phone.

So, I am going to tell the global firm I work for, that:

(1) I can do my job from any of their offices in the world;
(2) It does not make any financial difference to them to pay my London gross salary elsewhere;
(3) I like the job and the company, as well as the counterparties, but not the tax rates and the cost of housing in London;
(4) I do have an alternative offer from another global firm for a position in [Singapore].

The last bit is only half true. The truth is that I have only just started looking for an alternative offer for a position in [Singapore], contract or permanent.

Obviously, I am only going to make the proposal after landing this alternative offer. That should hedge my options.

The gist of the proposal is simple: I am going to report for work on Monday in an office in [Singapore], regardless of what you decide.
Why do I place [Singapore] in square brackets?

I think Singapore is a brilliant place to work in, but I want to buy a house across the causeway in the sultanate of Johor Bahru, in Malaysia, across the causeway.

The Malaysia my second home immigration programme gives me the right to stay there in renewable 5-year terms, if I buy a house in Malaysia. I just love it.

I can buy a fully-fledged mansion for less than US$35,000 over there. If anybody is interested, I will post a few more interesting urls of real estate e-markets in Johor Bahru.

Unfortunately, Singapore seems to dislike the scheme, and has instituted policies that prevent people from working in Singapore while living in Johor Bahru.

I understand that there are risks associated with the scheme. But then again, it is perfectly well possible to hedge against these risks. I will weigh in on how to hedge against such risks, in a future post.

Risk control is always based on very simple concepts. The biggest problem I would face is the fact that the traffic on the causeway between Singapore and the Malaysian peninsula is perennially jammed around peak hours.

The train service is notoriously abysmal. That what should be a 10-minute commute seems to take well over an hour; for a few miles, mind you.

Adding insult to injury, both sides of the causeway would insist on stamping my passport every morning and every evening. I would run out of passport pages within weeks.

It is actually the British who built the causeway during the era of the crown colony. If the Singapore government could blow up the causeway, they probably would.

Obviously, Singapore bans every public or private investment in additional railways or causeways.

Singapore would lose much of the heavy-handed control over its residents, native or foreign, if these residents decided to take advantage of the cheap housing across the causeway.

This is probably the true, underlying reason why Singapore wants to stop people from moving across the causeway, regardless of whatever other reasons they may claim.

This strategy, however, is truly self-defeating.

The long-term trend is not determined by staff following their companies where they go, but by companies following their staff where they want to go (and following their customers, and following their suppliers, and so on).

The long-term result of this policy can only be that companies now based in Singapore, will set up satellite offices in the sultanate of Johor Bahru, to cater for the staff who want to live in Malaysia, but not be subjected to traffic jams every morning.

The next step would to move the main office to the mainland. They might keep their incorporation in Singapore, and forward Singaporean phone numbers to Johor Bahru across the internet, but the real action would be in Johor Bahru.

Eventually, they might even drop their incorporation in Singapore, and incorporate elsewhere.

Another problem lies in Malaysia. The fact that foreigners buy houses to live in Johor Bahru while working in Singapore, bothers a certain proportion of Malaysians.

The other Malaysians may think it is a great idea, (but) this small, but very vocal group of xenophobic Malaysians, simply do not like it.

The sultan himself calls foreigners "dirty", and also wants to blow up the causeway.

Now, indeed, some foreigners are "dirty", while others are not. Why don't the Malaysians keep out the "dirty" ones, and leave the clean ones in peace?

Or even better, why don't the Malaysians publish a definition of what they think "dirty" means, so that all of us can figure out beforehand, if we are dirty or not, in terms of Malaysian sentiment?

Being a foreigner myself, in terms of Malaysia, I have every interest in the Malaysians keeping out foreigners who are truly "dirty".

If the Malaysians get rid of those, the outlook of things would improve for everyone, including myself.

How am I going to solve these problems, that is, the fact that Singapore and Malaysia are trying to blow up the "colonial" causeway, sabotage it, or render it inoperable in other ways? Well, I am actually not going to solve the problem.

The global firm I work for also has an office in Dubai. I am currently also soliciting alternative, competing proposals from other global firms with offices in Dubai.

As soon as I am able to enter the one-way bet, by having a back-up offer sitting in my inbox, I will drop the bomb to my manager.

I more or less expect my company to agree to the idea of me moving to Dubai (or Singapore anyway), and I do not expect that I will have to leave the firm.

But then again, that will not prevent me from hedging this particular position prior to entering it.

Read: http://powerpresent.blogspot.com/2007/01/trends-in-singapore-job-markets-pros.html