Gifted, driven kids, the kind who will leave their family and everything they've known, to cross an ocean to study in your country, are a scarce resource.
I'm not saying you shouldn't prioritize locals, but if you want competitive, world-class educational system, you should be open to foreign students and faculty helping to keep your system competitive. It's the same worldwide, whether it's in Singapore's NUS, or Oxford, or Saudi Arabia's KAUST.
But, what do I even know?