Indonesia Tries to Improve Competitiveness

KOMPAS/PRIYOMBODO

Members of the Union of Independent Workers Federation perform a play during a rally on Tuesday (1/5/2018) to commemorate International Labor Day, or May Day, in Jakarta. The workers also objected to Presidential Regulation No. 20/2018 on foreign workers during the rally.

JAKARTA, KOMPAS — A special aid to the Vice President, Wijayanto Samirin, said in Jakarta on Wednesday that Indonesia was trying to improve competitiveness.

However, neighboring countries have improved their competitiveness faster. Indonesia’s true competitors include Vietnam, Malaysia, Thailand and the Philippines.

The aspects that may make it difficult for Indonesia to compete are being assessed. This process is carried out through meetings with employers, diplomats and multinational corporations.

"A number of problems have concerned investors. The difficulty in obtaining a permit for foreign workers has always been raised," he said.

According to him, Presidential Regulation (Perpres) No. 20/2018 on the Employment of Foreign Workers (TKA) is actually only about the simplification of licensing procedures.  In seven days, the desired foreign workers can begin their work in Indonesia.

The licensing process is no longer handled by relevant ministries. "However, the relevant ministries should submit the negative list and positive list to the Manpower Ministry through an online network. It is quite transparent. All ministries can monitor," he said.

Wijayanto said the Perpres would be implemented beginning June 26, 2018. "We still have the time to give input to relevant ministries on the negative and positive lists. That is crucial," he said. The negative and positive lists will be used as a reference for the issuance of foreign worker permits.

Not a new thing

The head of the legal bureau at the Manpower Ministry, Budiman, said the regulation on foreign workers was not a new thing. "Since 1974,  Presidential Regulation No. 23/1974 has been implemented," he said in Jakarta on Wednesday in a focus group discussion held by the Indonesian Chamber of Commerce and Industry (Kadin).

The discussion was themed "Perpres No. 20 of 2018: The Ultimate Weapon to Lure Investors?”

Budiman said the Perpres had been revised several times, including through the issuance of Perpres No 20/2018. "Perpres No. 20/2018 was issued to simplify procedures, but not to ease the requirements. Requirements to work in Indonesia remain tight," he said.

The president of the Indonesian Workers Association, Mirah Sumirat, said the problems related to the invasion of foreign workers had been discussed in a national seminar in August 2016. "A recommendation from the seminar had been submitted to the President, the Manpower Minister and House Commission IX, but there has been no response," she said.

In an interview following the discussion, the director of control on the employment of foreign workers at the Manpower Ministry,  Wisnu Pramono, acknowledged that one of the difficulties facing the ministry was detecting illegal foreign workers. "Our supervisor can only obtain data from companies. We cannot get data outside companies," he said.

Wisnu also ensured that his office would take immediate action if unskilled foreign workers were being employed. "We need information from the public. The number of supervisors is limited. If there are unskilled workers, please report it to our office," he said.

He said the number of foreign workers in Indonesia totaled 85,974 people as of the end of 2017. "They are all skilled employees, such as those at the commissioner level, directors, professionals, technical advisors and technicians," said Wisnu.

Infrastructure projects

Foreign workers are mostly employed in road construction projects, such as toll roads. The director general of highways at the Public Works and Housing Ministry (PUPR), Arie Setiadi Moerwanto, explained that the employment of foreign workers was part of the deal on the use of foreign loans in the projects. The loan agreement includes the involvement of companies from the creditor country.

Foreign-funded projects include part of the Solo-Ngawi-Kertosono Toll Road project and the Medan-Kualanamu-Tebing Toll Road project, which are financed by loans from China. Loans from China are also used to finance the Cileunyi-Sumedang-Dawuan (Cisumdawu) toll road project, the Balikpapan-Samarinda toll road project, and the Manado-Bitung Toll. The construction of toll road projects still rely on foreign loans.

The government is quite strict that foreign companies should cooperate (joint operation) with Indonesian companies. The composition of works handled by local companies should be also greater than that of foreign companies.

"For example, at the Cisumdawu toll road project, the work composition is 70 percent local companies and 30 percent foreign companies," explained Arie Setiadi.

To ensure that as many local experts possible are being employed, the projects use the Indonesian national standard (SNI). For example, the number of workers for the Cisumdawu toll road project amounts to 1,202 people. Of that number, there are 70 skilled workers from China.

They are working with Indonesian experts to build a 472-meter twin tunnel. The foreign workers hired to build the tunnel wall should show proof of their expertise.

International Labor Day or May Day near Sunan Kalijaga State Islamic University (UIN) Campus, Sleman district, Yogyakarta Special Region (DIY) Tuesday, was marked by a riot that saw police posts burned and banners rose urging more restrictions on foreign workers.

Yogyakarta Governor Hamengku Buwono  and  local police chief Brigadier General (Pol) Ahmad Dofiri hoped the community was not affected  by the provocation.

From an initial investigation, the protests had allegedly planned the destruction. "The police found 38 Molotov cocktails, 17 bottles, four plastic bags containing oil, four firecrackers and pieces of wood, iron and stone," said the head of the local police office’s public relations division, Insp. Gen. Setyo Wasisto.

(HRS/SAN/CAS/NAD)