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Indonesia – Expatriate recruitment restricted to encourage domestic employment

16 September 2013

Indonesia has cut back on the recruitment of expatriate workers since last year in a move to provide more opportunities to develop local human resources, according to Bernama, the official national news agency of Malaysia.

The Indonesian government is also planning to introduce more restrictions next year through a new set of rules to protect local workers ahead of the ASEAN Economic Community (AEC) that will come into effect in 2015.

Under the framework, ASEAN member countries -- Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- are slated to gradually lift restrictions on labour movement within the region.

Data from the Indonesian Manpower and Transmigration Ministry show that since the government closed off 19 types of jobs to expatriates last year, their numbers have declined by -6% by 4,880 to 72,427 compared to 2011.

Indonesian Director General of Labour Placement and Advisory Reyna Usman is quoted by English daily The Jakarta Post as saying: "We are tightening up on (expatriate) permits because we think that there are many Indonesians who are well qualified for the jobs,"

She said the restriction has, however, not hindered the operations of foreign companies in Indonesia because they have agreed to comply with the request from the authorities to employ local workers.

Between January and August this year, the ministry only issued 48,000 permits for foreign workers, and Reyna forecast a further decline this year.

The foreign workers being granted permits are dominated by Chinese nationals at 10,291 or 21.4% of the total, because most imported capital goods, such as machinery and equipment, come from China. Japanese nationals account for the second largest group at 9,788, followed by South Koreans at 6,013.

The industrial sector has the highest recruitment of expatriates, followed by the trade, construction, mining and oil and gas sectors.

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