Office workers make their way during lunch hour in Singapore's financial district on Oct. 30, 2008
On the northern fringe of Singapore, overlooking the slate gray waters of the Johore Strait, the public-housing project where Anthony Fulwood lives is so far from the city's affluent expatriate enclaves that cabdrivers are stunned when he announces his address. " 'For God's sake, why do you live there?' they regularly ask me," says Fulwood. " 'You're white!' "
Fulwood isn't the only Western expatriate to take up residence in the cheaper peripheries of this Southeast Asian city. An English teacher and community volunteer whose duties include helping integrate Westerners into the Bukit Panjang neighborhood, the 30-year-old Englishman sees a small but steadily growing number of Americans, Australians and Europeans in the fluorescent-lit coffee shop where locals often gather after work around cold pitchers of beer. These foreigners are economic refugees of a sort. Because of the global recession, expat bankers, traders and corporate managers have lost their high-paying jobs with multinational corporations. But instead of returning to their home countries, they've decided to stay in Asia, even though that means moving into cheaper housing and giving up privileges that once set them apart from ordinary Singaporeans. (Read TIME's cover story on expats in Singapore.)
Just a few years ago, when an economic boom was pulling a flood of Western professionals into Singapore, a Western face in a working-class neighborhood like Bukit Panjang was a rare sight. According to investment bank Credit Suisse, Singapore's population grew 18%, to about 4.8 million, from 2004 to 2008. More than three-quarters of that growth, Credit Suisse estimates, came from newly arrived foreigners taking lucrative positions at expanding private banks, oil-exploration firms and shipping companies. Foreigners filled 61% of the 796,000 jobs created in Singapore during that four-year period.
As the expat ranks swelled and foreigners put down roots, the city's tonier districts filled up. Prices for apartments in Western enclaves like Tanglin and Orchard doubled in value from 2004 to 2008 as buyers snapped them up. Waiting lists for coveted spots at international schools like the Singapore American School or United World College of South East Asia were so long that expats were encouraged to register their children at birth in order to gain admission four or five years later. The cost of joining the Singapore Island Country Club and the American Club soared as transferable memberships were bought and sold on the open market like hot stocks. (See 10 things to do in Singapore.)
Today, as beleaguered investment banks shutter offices and commodity prices and trade flows plunge, Credit Suisse estimates that hundreds of thousands of expat jobs are disappearing from Singapore. Property prices, particularly of high-end homes, are expected to fall some 50% as the recession gathers force.
But in a departure from previous downturns, some expats are electing not to return to banking centers such as New York City and London. This recession is global, and the implosion of the financial-services industry means job prospects back home are even bleaker. American Marc Rudajev, a 37-year-old ex–hedge fund manager whose $350 million fund dissolved in the middle of 2008 as global stock markets swooned, is one of the Singapore expats not hurrying home. "This economic crisis is affecting every country," he says wearily. "But if there is a glimmer of hope anywhere, it's here rather than in the U.S. or U.K."
For people like Rudajev, staying put means learning to live without many plush perks of the expat lifestyle. The first to vanish are the generous housing allowances that many companies use to entice foreign talent overseas. "I'm beginning to see more expats downgrade to smaller and cheaper apartments," says Michael Ciola, an Australian real estate broker who caters to foreigners. The second luxury to be dropped is the private club. The cost of a transferable membership at the Singapore Island Country Club has slumped to $100,000, down nearly a third during the past 18 months, according to the Business Times Golf Index, a widely followed local benchmark. (See pictures of Singapore.)
Last to be relinquished in most cases is a child's enrollment in an exclusive school, where annual tuition ranges from $15,000 to $20,000. Local schools like Hwa Chong International (tuition: about $10,000) are reporting strong growth, not only because they're cheaper but also because these schools are popular with foreigners who see their children's long-term future in Asia rather than in the West. Enrollment at Hwa Chong, which offers classes in English and Chinese, jumped from 283 students last year to 440 this year, according to school officials. "The education in Chinese gives us an edge over other international schools," says Ian Barker, Hwa Chong International's principal.
A Canadian sales executive for a global media company, who requested anonymity because he is negotiating a severance package with his former employer, is another expat who has been living parsimoniously since being laid off. In the boom years, he occupied a spacious sea-view apartment near downtown Singapore that rented for $5,000 a month. Today he occupies more modest digs, paying about $700 a month for an apartment he shares with a friend. "I'm interested in creature comforts like hot water, but I can do without joining a country club or driving a Lamborghini," he says.
After all, Singapore is not a hardship post, even in hard times. For 10 years in a row, it has been named the best city in the world for expats by the London-based advisory firm ECA, garnering high marks for its superior roads and airport, health care, low crime and decent air quality. The government makes an effort to retain foreign knowledge workers, who are viewed as vital to the health of Singapore's small but highly competitive economy. Unlike many countries, Singapore does not automatically deport foreigners who lose their jobs. Expats can apply for a special visa that allows them to look for another job for up to six months.
But Westerners who elect to stay need to lower their expectations. Ex–hedge fund manager Rudajev is adjusting to a humbler lifestyle. After his fund closed, he accepted a sales position at a Singapore-based stock brokerage for a modest salary. "We're not eating out as much," he says. "We're cutting back on holidays." Even so, he has decided not to pull his two children out of their international schools, and he still frequents the American Club sports bar, where the TV screens hanging from the ceiling blare more CNBC financial news than football or tennis. Most evenings, the crowd of bankers and businessmen groan and gulp their drinks as they watch markets plummet.
The mood is more cheery around the chipped Formica tables at the Zhenghua Community Club's coffee shop in Bukit Panjang, where Fulwood often stops for a greasy fried-oyster omelet on his way home. Asked if he'd rather be sipping lychee martinis in an air-conditioned hotel bar or swanning around a big Victorian bungalow, Fulwood grins and says, "I'd be crazy not to, of course. But I'd still come back here every weekend. This is real life."