Editorial: Streamline Expat Rules and Regulations


AUGUST 26, 2015

A new report by property market research group Colliers International shows that the government's mixed signals on how to deal with expatriate workers in Indonesia are not without consequence.

Economic growth is slowing, the rupiah has been rapidly depreciating against the US dollar and yet despite President Joko Widodo's pledge to seek more foreign investment in Indonesia, there continue to be policies and statements that make it look like foreign workers aren't really welcome in Indonesia -- at least as far as the government is concerned.

Indonesians continue to greet foreign tourists and residents with warm smiles, but on the official level it is becoming harder and harder to obtain work permits.

Now the Energy and Mineral Resources Ministry says it will uphold restrictions for foreign workers in the oil and gas sector, including a requirement on foreigners to speak Indonesian, in order to protect local jobs. Previously we were told that requirement would be dropped.

Indonesia surely does need to prepare for the anticipated inflow of skilled foreign workers once the Asean Economic Community takes effect in December, but ad-hoc regulations and decrees only contribute to a growing sense of bewilderment about what the government actually wants to achieve, and how.

We all remember the president telling business leaders at the World Economic Forum in April that if they ran into any trouble while trying to invest in Indonesia, they should give him a ring.

Well, the time has come to renew the call on Joko to streamline policies affecting foreign workers -- both in terms of the pending AEC and in terms of people working here already. This latter group is relatively small -- less than 70,000 on a population of 250 million -- and generally consists of people with relatively high incomes. But most of these incomes are largely spent locally: besides tax, there is housing, schools for children, food, entertainment etcetera.

Of course, however senior, a few expatriate workers more or less wouldn't make much difference on the ground in Indonesia, but the point is that these people spread the word in their home countries. And when trust is lost, it can be very difficult to rebuild.

The Colliers report suggests senior-level expatriates are already packing their bags. To be fair, this is not only due to decisions made in Jakarta, but here is one field in which the president can make decisive moves to restore the international community's trust in Indonesia.