$3b spent on foreign workers: Ginandjar
JAKARTA (JP): Indonesia has to spend US$254.6 million per month, or $3.05 billion a year, to pay 60,313 foreign workers in the country, State Minister of National Development Planning Ginandjar Kartasasmita revealed yesterday.
Speaking at a hearing with the House of Representatives Commission VIII for state budget and finance, Ginandjar said there were almost 1 million Indonesians working abroad, but they had so far contributed only $2.3 billion since April 1, 1994.
"In this era of globalization, we cannot do much about this. And I warn everybody here that we'll eventually have to open our labor market even more to foreigners," Ginandjar told the commission.
The minister said the government still imposed restrictions on foreign workers or even closed off certain sectors altogether.
This year, the government closed 1,841 professional occupations to foreign workers and imposed restrictions on 5,153 other positions.
As of early November, 60,313 foreigners worked in Indonesia, including 36,009 professionals, 15,041 supervisors, 6,802 managers and 2,461 technicians or operators.
Foreign managers here earned an average $6,000 a month, professionals $5,000 a month, supervisors $2,000 and operators or technicians $1,500.
"Therefore, the amount we have to spend on foreign workers is about $254.6 million a month," Ginandjar said.
As of last month, there were 945,924 Indonesians working overseas, with 707,357 of those in farming, mining, manufacturing, electricity, construction, transportation, and financial and health services.
Ginandjar said the large deficit in this particular sector resulted from the lower skills of Indonesians working abroad, compared to the high-paid expatriates in the country.
"Globalization and increased economic activities, especially in trade and investment, have opened our door even wider for foreign workers.
"It seems that there are many employment opportunities which cannot be filled by Indonesians," Ginandjar said.
He said many Indonesians with university degrees were unable to find jobs as they often did not have the right qualifications.
He noted that the number of fresh university and vocational school graduates entering the labor market doubled from 1990 to 1995, from 1.7 million to 3.3 million people.
Meanwhile, only 1.3 million employment opportunities were created for university and vocational school graduates during that period.
Growth
Ginandjar warned that the current economic downturn would slow the creation of employment opportunities, considering that Indonesia already had a relatively high unemployment rate of 7 percent, recorded in 1995.
He projected that Indonesia's economy would slow down to between 5 percent and 6 percent for the next two years due to weakening domestic investment and product demand.
Product demand would lessen as a result of government efforts to further tighten fiscal and monetary policies for the 1997/1998 and 1998/1999 fiscal years.
Domestic investment would shrink due to the weakening rupiah, the retrenchment of the state budget, the cut in state-related projects and relatively high lending rates.
In the current economic upheaval, foreign investment would also drop because of diminishing confidence among foreign investors in the country's economy, Ginandjar said.
He said the goal of the government in recent measures in the financial sector, including the closure of 16 ailing banks, and deregulation in real estate was to restore foreign inventor confidence in the economy.
"We hope those measures will restore investor confidence. If confidence is there, our economy will return to its previous 7 percent growth," Ginandjar said.
Arsjad Anwar, an expert advisor to Ginandjar, said the government could expect approved foreign investment projects over the next two years.
Arsjad contended that some foreign investors, especially those with a significant presence here, would have a stronger commitment to the country's economy.
Arsjad said local corporations, especially export-oriented firms, could expect more demand for their products from overseas markets.
"So the implementation of approved foreign investment projects and export demand will save Indonesia's economy from a drastic downturn," Arsjad said. (rid)