More on expatriate employees
More on expatriate employees
By Donna K. Woodward
MEDAN, North Sumatra (JP): Following Nirwan Idrus's article
"Not all Expats are Experts" in this newspaper, there were a
number of items questioning Indonesia's use of expensive foreign
consultants and international aid experts.
To know just how expensive foreign "experts" are, we have
several government sources. The Indonesian Bank Restructuring
Agency acknowledged that in 2000 it spent Rp 235 billion, two-
thirds of its budget, on foreign consultants.
Chief economics minister Rizal Ramli stated that foreign
consultants consumed 30 percent of the government's budget for
state projects. Replacing foreign consultants with qualified
local professionals will have several obvious benefits. It will
save the government money. It will increase work opportunities
for Indonesian professionals, many of whom now prefer to work
overseas because of the limited opportunity here for well-paid
employment. And when income is channeled to Indonesians, more
will presumably be circulated within the local economy.
While reconsidering the reliance on foreign professionals,
there is another issue for review: the prolonged employment of
foreign managers and consultants within companies. When a company
applies for approval to employ a foreign worker it must designate
a local counterpart to be trained to replace the expatriate
within a foreseeable number of years, which may vary depending on
various factors.
Theoretically this means that the company has a skills
transfer plan in place, and that the expatriate
consultant/manager/technical expert shall prepare the local
counterpart to take over the position. But theory is different
from reality. A glimpse around shows that expatriates remain
ensconced in their positions for five, 10 or more years.
Where is the skills transfer? When will Indonesians be
considered ready to take the management reins from their foreign
mentors?
The answer, if we are honest, is "Not very soon." Few
companies have a credible skills transfer program in place. They
are lucky to have even a pro-forma program. Sometimes a foreign
manager departs after several years and is replaced by another
foreign manager, and another, and another. There may be
justification in a particular company for a permanent expatriate
head.
A wholly-owned foreign company may insist on appointing
expatriate managing directors. But how many positions should be
reserved for foreigners, and for how long, especially now that
Indonesia has so many overseas graduates who remain overseas
rather than return for low-paid employment?
The Investment Coordinating Board, whose responsibility it is
to monitor the replacement of foreign with local talent, does
almost nothing in this regard. This is not to criticize the
Board's staff. On the contrary they are enormously helpful to
investors and work permit applicants. They may not want to ruffle
the feathers of investors by questioning the work permit
extensions requested year in and year out.
Perhaps as they process work permits they also wonder,
"Again?" Rather it is to question the discrepancy between what
the stated national policy is, and what the reality is. If as the
government says the object of using foreign workers is to prepare
Indonesians to assume high level positions, then let's see some
bona fide skills transfer programs in place.
Let the government question lack of progress and review the
operations of those companies who make no effort to replace
foreign managers with Indonesians. And let all this happen
transparently and without the usual opportunities for companies
to avoid responsibilities by payoffs.
There are two other sides to this multi-dimensional issue.
One is that insofar as Indonesia does need and approves the use
of expatriate workers, the bureaucracy should be more
accommodating to us. Instead of maintaining the current obstacle
course of redundant paperwork, passport copies and photographs,
why not simplify the procedures for expatriate residents?
Instead of treating expatriates like a trespassing criminal
presence whose every movement needs to be "legitimized", make the
system more user-friendly. If the bureaucracy becomes less
burdensome for foreigners, there might even be a spillover effect
for Indonesians.
The other side of the issue of foreign versus local managers
is one touched on by Nirwan and several Indonesians who responded
to his article. That is the work ethics of Indonesians. In
general there is little vertical trust in companies between top
management and the underclasses. Many Indonesian and expatriate
company directors lack confidence in the work ethics of
Indonesian managers.
Never mind that some expatriates may have questionable
business ethics also, tacitly condoning violations of safety,
environmental, and child labor laws; approving unofficial payoffs
to officials to accomplish business objectives; and even
promoting nepotism by importing their family members from
overseas to work with them. (Just what Indonesia needs!)
One of the roles of expatriate managers and professionals
ought to be to handle ethical issues that arise. This is not a
superfluous responsibility. It is essential to the obligations of
any manager to nurture work ethics in an organization. Especially
in Indonesia where the need for better work discipline and ethics
is repeatedly cited, a prerequisite for expatriates' continued
employment ought to be that they set ethical standards and
strengthen their Indonesian counterparts in complying with them.
One thing that keeps developing countries subservient is
dependence on foreign aid, including foreign managers. The G-7
countries still employ foreign professionals and managers;
developing countries certainly need to.
But let Indonesia do itself a favor by ensuring that the
country gets all possible value from expatriate consultants and
managers by putting some teeth into the requirement that they
prepare Indonesians to lead Indonesia's companies, including in
work ethics.
The writer, an attorney and former American diplomat at the
U.S. Consulate General in Medan, is a management consultant.