Better skilled workers needed to anticipate trade liberalization

Better skilled workers needed to anticipate trade liberalization

JAKARTA (JP): Labor and business experts warn that unless immediate action is taken, Indonesian workers won't be able to withstand the liberalization of the flow of goods and services, including labor, in the next century.

Businessman Arnold Baramuli, union leader Imam Sudarwo and Yudo Swasono from the Ministry of Manpower, formed a chorus at a seminar yesterday when calling for immediate action to make Indonesian workers more productive and competitive.

Indonesia must improve the quality of its workers in order to take full advantage of the free trade arrangements it is entering into, Baramuli, who is also a member of the House of Representatives, said.

He said the task of strengthening the Indonesian work force falls largely on small and medium scale companies because they, rather than the large companies, are expected to lead Indonesia into the free trade era.

Failure to act now could leave Indonesia "a mere spectator in the free competition," he said.

The one-day seminar was organized by Kosgoro, a cooperative movement affiliated to the ruling political group Golkar. The meeting also featured Saleh Alwaini, an executive of a company which sends Indonesian workers abroad.

The seminar specifically discussed the challenges Indonesian workers will face when the Asia-Pacific region phases in its free trade arrangement in 2010.

Baramuli said Indonesia will not be able to compete in capital-intensive and hi-tech industries now dominated by advanced countries.

Indonesia's strength will be in small and medium scale companies and they should be the ones to educate and train the workers, he said.

This means that the government should continue to cultivate the development of small and medium scale companies through more deregulatory measures. Financial conditions, for one, need restructuring to allow small and medium companies greater access to credit facilities, he said.

Yudo warned that the obligatory liberalization measures under the General Agreement on Tariff and Trade (GATT) would be expanded to include trade in services, and this means the liberalization of the flow of workers.

He said Indonesia needs to strengthen the quality of its workers in order to minimize the impact of the inflow of foreign workers into the country.

GATT allows for some temporary relief measures but Indonesia should be prepared to face the possible consequences of the full enforcement of GATT by 2005, he said.

Under GATT's principles on the movement of labor, a country is only allowed to set professional qualifications for foreign workers as a way of limiting the inflow of workers.

Imam Sudarwo argued that the low quality and productivity of Indonesian workers was caused not only by their poor education, but also by low wages, lack of social security and restricted freedom of association.

"In facing the free trade era, we should address these problems," he said.

He said Indonesian industrial workers are among the lowest paid in Asia, even lower than their counterparts in China.

An Indonesian worker earns an average of US$0.28 per hour, he said. This is much lower than the minimum wage of $0.54 per hour in China, $1.80 in Malaysia and $16.91 in Japan. (rms)