Thu, 04 Aug 1994

Employment of expatriates to be eased

JAKARTA (JP): The government will ease restrictions on the employment of expatriates for jobs which cannot be handled by Indonesians in a bid to promote foreign investments in the country, Minister of Information Harmoko said here yesterday.

"President Soeharto instructed related government institutions to allow the employment of expatriates without any financial charges if local professionals are unavailable for certain positions," he told reporters after a limited cabinet meeting on the economy at the Bina Graha office here.

According to the Central Bureau of Statistics, the number of expatriates working for domestic and foreign companies steadily increased from 18,000 in 1984 to 37,663 in 1992 due to a shortage of local skilled professional managers, while the number of investment projects was increasing.

Several companies said that a lack of qualified local personnel has forced them to hire expatriates.

Harmoko explained that the President instructed the ministries of industry and manpower and the Investment Coordinating Board (BKPM) to formulate measures to ease the employment of expatriates, particularly for jobs which cannot be handled by Indonesians.

According to Governmental Decree No. 23/1974, companies established by domestic and foreign investors are allowed to employ foreigners for certain jobs within a certain period of time after getting permits from the Ministry of Manpower, but they must train Indonesian personnel to replace the expatriates. If the employment of expatriates lasts longer than the designated period, the employers must pay fees to the government, which will use the fees for training Indonesian personnel.

"The employment of expatriates should be freed from any levies," Harmoko said.

He did not specify whether the easing of restrictions will mean abolishing of the fees for training Indonesian personnel.

Harmoko said the planned measure is necessary to promote foreign investment in the country.

Data at BKPM show that foreign investments approved by the government during the first seven months of this year reached US$14.7 billion, as compared to $8 billion in the whole year of 1993 and $10 billion in 1992.


Harmoko said yesterday that President Soeharto also expressed concern over last month's high inflation, which reached 1.37 percent due to the sharp increases in the prices of food and housing costs.

"The 6.05 percent increase in the prices of grains and the 3.05 percent rise in beverage prices caused the index of food prices to increase by 1.57 percent last month," he said.

He said housing costs increased by an average of 1.42 percent last month and the prices of services by 1.23 percent, while the prices of clothing rose 0.42 percent.

Last month's high increase in consumer prices brought the country's inflation to 5.96 percent during the first seven months of this year, he said.

The government, under its Sixth Five Year Development Plan, aims at curbing inflation at a maximum of five percent in the coming five years.


The minister said Soeharto also expressed concern over increases in rice prices in spite of the fact that supplies are adequate.

"The prices of medium-class rice rose by 4.3 percent to an average of Rp 664 (30.64 U.S. cents) per kilogram," Harmoko said.

He acknowledged that this year's dry season has affected 246,000 hectares of rice fields, of which 64,000 hectares are damaged. "But the impact of this year's dry season is not as severe as that in 1991, when 843,000 hectares were affected, including 190,000 hectares of damaged fields," he said.

This year's dry season will not end until November.

"The rice price hikes have been caused mainly by the over- publication of the impact of the dry season by television broadcasters," he said.

"The supplies of rice are actually adequate but the buffer- stocking system is apparently less than effective," he added.

He said the President, therefore, instructed the National Logistics Agency (Bulog) to take measures to stop increases in rice prices.

Harmoko said the meeting also reported that Indonesia enjoyed a trade surplus of $591.8 million in May from its exports of $3.19 billion, while its imports reached only $2.6 billion.

The revenues from the May exports included $756 million from oil and gas exports and $2.43 billion from non-oil exports, he said.

During the first five months of this year, the country gained a trade surplus of $2.92 billion from its exports of $14.82 billion because its imports were recorded at $11.9 billion, he added.

The minister said the meeting also reported the country's plan to build 31 fishing vessels, which will be leased to fishermen, with Spanish aid of $200 million. (riz)