GATT to remove borders for workers

GATT to remove borders for workers

By Ridwan M. Sijabat

JAKARTA (JP): The good news is that as of the year 2005,
workers all over the world, Indonesia included, are virtually
free to move from one country to another.

The bad news is, as far as Indonesia is concerned, it's going
to be a tough and competitive world out there for its workers.

This warning came from Yudo Swasono, head of the Research and
Development Agency of the Ministry of Manpower, after studying
the impact of the General Agreement on Tariffs and Trade (GATT)
on the labor market. Indonesia is a member of GATT, along with
123 other countries.

Between now and 2005, when most of the existing barriers to
the movement of workers will be lifted, Indonesia must strive to
strengthen the skill and professionalism of its huge workforce,
and make them competitive, Yudo told The Jakarta Post.

"This country will be flooded by professional expatriates when
we open our labor market to the foreign countries who signed the
agreement," he pointed out.

The clause concerning the labor market is part of the General
Agreement on Trade in Services (GATS), one of the documents in
the GATT treaty signed in Marrakesh, Morocco, in April.

When that particular paragraph comes into force in 2005, there
will be greater movement of workers across national borders
because the GATS compels all signatories to open their doors to
foreign workers. There are exceptions, but only under strict
conditions and are temporary in nature.

For a nation increasingly relying on exporting workers, this
is good news. But, as Yudo pointed out, it works both ways, and
Indonesia must be equally prepared to accept more foreign
workers.

Currently the employment of foreign workers in Indonesia is
strictly regulated and limited to only managerial-level positions
which can not be filled by Indonesians. Their work permits are
also reviewed periodically and they are subject to heavy income
taxes.

Under GATS, Indonesia has already pledged to begin opening the
various services sectors to foreign exporters and investors,
including the tourism, hotel and transportation sectors.

The labor market's integration will be a major challenge,
specifically for the Ministry of Manpower, because it has to make
Indonesian workers more professional in order to make them
competitive in the tough liberalized labor market after 2005.

Yudo acknowledged this is not an easy task, "because of the
low quality of our human resources," he said, pointing out that
76 percent of Indonesian workers have only primary school
education. Many of them did not even complete school.

Yudo, who received his doctorate on labor economics from the
University of Illinois in 1989, said Indonesia could be
competitive in labor market segments or in professions that
require limited skills.

Massive campaign

He cited bus drivers, tour guides and middle level managers as
examples. "We will lose out in the upper segments such as
professional managers, lawyers and accountants," he said.

At present, Indonesia has about 2.5 million low and middle
level professional workers and about 200,000 professional
managers, lawyers and accountants.

The government has agreed to launch a massive campaign to
publicize the impact of the GATS on the economy and its
implication on workers.

Yudo said each country will still be able to impose some
restrictions on the employment of foreign workers but they are
strictly on the professional qualifications of the migrants.

He conceded that this clause is working to the advantage of
the industrialized countries and at the expense of developing
countries, Indonesia included.

"It's a bad trick by developed countries to bar developing and
poor countries from taking advantage of the global trade," he
said. "Who has the most professional managers and noted lawyers?
The developed countries of course."

He stressed Indonesia has no choice but to comply and try to
take as much advantage as it can out of the situation.

In the services sector, he says, Indonesia's main competitors
will be Singapore, South Korea, Malaysia and the Philippines.

Regional cooperation through forums like the Association of
Southeast Asian Nations (ASEAN) and the Asia Pacific Economic
Cooperation (APEC) should also be exploited to Indonesia's
advantage, he added.