Easing up on expatriates<\/p>\n
President Soeharto's instruction to ease restrictions on the
\nemployment of expatriates addresses one of the major problems
\ncomplained about by both domestic and foreign investors.<\/p>\n
The government has tried to expedite the licensing procedures
\nfor expatriates through a one-stop administration service at the
\nInvestment Coordinating Board (BKPM) in Jakarta and its
\nprovincial affiliates since the early 1980s. However, the
\nprocedures are still considered arduous and complex, especially
\nbecause employers are still required to obtain letters of
\nrecommendation from relevant ministries.<\/p>\n
Another problem is related to the lists of occupations open to
\nexpatriates which are drawn up periodically by the various
\nministries. Most of the time the lists do not reflect the actual
\nsupply and demand equation, especially because the manpower
\nmarket in the country remains disorganized.<\/p>\n
It is naturally the right and in fact the duty of every
\ngovernment to restrict the hiring of foreign workers. After all,
\nthe promotion of investments is primarily aimed at creating jobs
\nfor the local people. The root of the problem, though, is that
\nthe extent and growth rate of the demand have been rising so
\nsteeply within so short a period of time that the local supply
\nsimply cannot meet it in terms of quality and quantity. The
\nproblem is often exacerbated by the erroneous perception that the
\nonly skilled personnel for middle and high level management
\npositions are university graduates. In fact, those with academic
\ncredentials mostly constitute no more than trainable material for
\nsuch positions.<\/p>\n
The demand for middle and high level managers, including
\nsupervisors, has risen steeply since the latter half of the 1980s
\ndue to the sudden massive inflow of foreign investments as a
\nresult of the massive deregulation drive. The export-led growth
\nstrategy launched by the government in coincidence with the
\nderegulation measures and the opening of the domestic market
\nwider to foreign competition has further spurred the need for
\nprofessional managers. Even domestic companies which were
\npreviously well protected from import competition are being
\nforced to hire more skilled personnel to remain competitive.<\/p>\n
Given the disorganized manpower market, it is difficult to
\nestimate the actual need. The Indonesian Management Association
\nhas estimated the need for middle and high level managers at more
\nthan 50,000 a year. Another rough guess could be based on the
\nnumber of domestic and foreign investment ventures realized since
\n1967 which, according to BKPM, totaled 7,300. Assuming that one
\nventure needs 20 professional managers, the need exceeds 150,000.
\nBut the total does not include investment ventures in the
\nfinancial and hydrocarbon sectors which are licensed by other
\nministries and numerous other enterprises licensed directly by
\nthe various ministries.<\/p>\n
So scarce are local professional managers on the higher levels
\nthat most foreign businessmen consider well qualified Indonesian
\nmanagers the most expensive in the world. No wonder many
\ncompanies have been forced to hire highly competent managers from
\nsuch countries as India, the Philippines and Singapore who, due
\nto adequate supplies of skilled manpower in their home countries,
\nare willing to accept lower compensation overseas. Other
\ncompanies risk violating the government restrictions by illegally
\nhiring expatriates, even though many firms would prefer to hire
\nlocals for most management posts because paying foreigners
\ngenerally costs much more.<\/p>\n
So we see the President's instruction as a rational stopgap
\nmeasure to meet the rising demand for skilled personnel until the
\nlocal supply is adequate.<\/p>\n
We should remember that qualifications for middle and high
\nlevel management positions cannot be fulfilled entirely by
\nuniversity education. Experience, which means the accumulation of
\nachievements and learning from mistakes, counts greatly.<\/p>\n
We can speed up the turning out of university graduates by
\njuggling the credit systems, but we will need much more time to
\ndevelop increasingly professional managers because we cannot
\naccelerate the process of gaining experience.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/easing-up-on-expatriates-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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