It had been reported early in January this year that Indonesia will be imposing a proficiency in Bahasa Indonesia as a requirement for foreigners seeking to work in Indonesia. The labor ministry of Indonesia announced that the new requirement would be rolled out this April. This means that workers looking for work in Indonesia, which has the largest economy among Southeast Asian countries, would have to prove their proficiency in the local language, Bahasa Indonesia.
There are more than 68,000 workers from different countries working in Indonesia right now, and they, as well as new arrivals must pass a test on the language. There is no word yet on the level of proficiency that they require, but it had been announced that their law required it and there would be no exceptions regarding this ruling.
A different proposal
Indonesia’s new President Joko Widodo had pledged to lower the barriers to attract foreign investors to come to Indonesia, and the recent drive is shaking the foreign business community. This is widening the gaps that exist within the new president’s administration. He had just returned from a trip to Japan and China, seeking to generate support for the construction of several infrastructure, power plants and ports that Indonesia could not build by itself. The language rule is working at cross purposes with the current objectives of the president regarding foreign investments, according to a presidential policy adviser.
Sofyan Djalil, Indonesia’s economics minister even said during an interview that they do not want a regulation such as this one, in principle, because it is like a non-tariff barrier and should not be applied to all foreign workers.
A ten-year old rule
The ruling on the language had been part of the country’s law since ten years ago but the implementation itself was as slow as can be.
A mining company legal adviser, Bill Sullivan said that the legal requirement would definitely be a severe obstacle for first-time job-seekers from abroad. He added that this is part of the growing nationalist sentiment among Indonesians, who have opposed Indonesia’s employment of foreigners. It would be all right with them if the need is critical.
Limit in the number of foreign workers
The move is to help in the transfer of skills and knowledge to the locals and to limit the number of foreign workers entering Indonesia, according to M. Hanif Dhakiri, the country’s labor minister. He added that this is in preparation for the free-trade agreement among Southeast Asian nations that would take effect in 2016. It is expected to have a ripple effect beyond Southeast Asia, since about half of the foreign workforce in Indonesia are from South Korea, Japan and China while the largest single investor in the country is the United States.
While Indonesia thinks this is a reciprocal thing, with other countries such as Australia requiring skilled migrants to be competent in English, other countries within the region that compete with Indonesia for foreign investments do not have a language requirement. Foreign companies think that it would increase their training costs as well as incur an increase in lost man hours. Others think that the sudden implementation gives them very little time to prepare. Many companies have been operating in Indonesia for several decades, while others such as IKEA and Uniqlo are newcomers. However, the expatriate workforce is diminishing. For U.S. companies alone, the reduction in the workforce had been about 75 percent since 2007.