RI economic boom draws expatriates

An Indonesian woman on her first trip to London whispered to a colleague, "Gee, isn't it something to have these bule carrying our luggage?" This woman was expressing a feeling shared by some Indonesians about foreigners, westerners in particular. Certain people here view foreigners, including foreign experts working in various fields, as arrogant people, who think only of taking from the country. On the other extreme, many Indonesians look up to foreign experts for guidance and example, copying everything their foreign supervisors, or counterparts do. Feelings aside, Indonesia still needs foreign experts. The question is, what should Indonesians do to reduce this dependence on foreign expertise? The following article discusses the reason behind the influx of foreign workers into Indonesia. More stories on Pages 2 and 6.

JAKARTA (JP): Four years ago, John Michael (not real name), 45, worked as a telecommunications expert in Texas, the United States. Economic recession forced him and many other workers into early retirement.

Jobless for a year, he left his hometown for Jakarta where his expertise was badly needed by many fast-growing companies.

Today, he is president director of a telecommunications company belonging to one of Indonesia's largest business groups.

Another success story is that of a Filipina, Marina, an MBA graduate who finds business in Indonesian more promising.

Working as a finance consultant at a state-owned bank, she enjoys a higher salary and better fringe benefits than her friends in her home country.

Like thousands of other expatriates with similar stories, foreign workers come here to benefit from Indonesia's booming economy. The country's economic growth has led to an influx of thousands of new expatriates, as companies hire foreign professionals and managers to fill increasing production needs.

The flow of foreign workers into Indonesia started in l967 when the newly-established New Order came into power. The arrivals in the l960s were welcomed as they brought new hope of the transfer of brainpower and technology.

In the l970s and l980s, foreign workers came along with investment packages from their countries. Japan, the largest foreign investor in Indonesia, had brought in about 9,000 workers occupying executive to technical positions in more than 700 joint investment projects valued at about US$23.96 billion as of September l995. South Korea, which invested $5.5 billion in 346 projects in l994, has flooded the local employment market with around 12,000 workers.

Indonesia's rapid economic growth in that period also led to the emergence of a large number of multinational and large-scale business groups which must be professionally managed.

Owing to the economic boom, the Indonesian business community faced serious manpower problems. The business sector suffered from a lack of qualified managers.

Tanri Abeng, president of Bakrie & Brothers, acknowledges that the shortage of local managers and professionals is due to the wide gap between the growth of business and the number of professional managers.

"What is happening is incredible. There is no normal growth. Businesses grow by 30 or 40 percent a year. Just take a look at Bakrie & Brothers. It has grown ten-fold within five years," he said.

The problem is, capitalists tend to grab any business opportunity without considering who will manage the business, according to Tanri. The shortage of managers and other professionals has forced them to take a shortcuts by importing expatriate managers or by hijacking managers from other companies.

I Gusti Made Mantera, a deputy president director of Bank Bali, sees there is no way to stop the flow of foreign managers as long as there is a shortage of managers.

"We cannot close the door for qualified foreign managers and I believe that companies will continue importing managers because they need them," he said.

Careful screening

However, Mantera underlined the need for careful screening because not all foreign managers are good.

"When I was in IBM, we had a foreign manager who was just plain stupid. He was also a troublemaker and we sent him home earlier than the due time," said Mantera, a former chief commissioner of PT USI-IBM.

Mantera's statement reflects the fact that more and more low- qualified expatriates are flooding Indonesia and neighboring countries. According to a Far Eastern Economic Reviews report in February 1994, two modern-day models of expatriates have emerged in Asia, including Indonesia: westerners who have immigrated to Asia because they cannot find employment back home and Asians who have left their countries either for the same reason, or because they can make more money elsewhere in the region.

Many of them come to the region because they want a taste of adventure or to collect a more impressive resume when they apply to graduate schools, the magazine reveals.

The days when the term "expatriates" referred solely to high- level western managers who earned big salaries and lived luxurious lifestyles are history. Now, "expatriates" include both western and Asian job hunters, including Indians, Filipinos, Singaporeans and Malaysians, who invade the local employment market in various fields. These people include top executives in multi-national firms, hotel chain professionals, teachers of language and other subjects, entertainers and advisers -- the only job descriptions tolerated by Indonesian immigration and labor laws.

Although many new expatriates are not paid as highly as their predecessors and some of them are even willing to be paid less than locals, the amount they earn has reached an alarming level. Indonesia spent an estimated Rp 5.5 trillion (US$2.4 billion) to pay 57,000 foreign workers last year. This means, a foreign worker receives an average of Rp 90 million annually, or around Rp 7.5 million a month, excluding accommodation facilities such as mansions, or fancy apartments, and cars (See tables on Page 6).

Local managers receive an average monthly salary of between Rp 3 million and Rp 7 million a month.

This figure is quite discouraging if we compare it to the l996/l997 Indonesian State Budget, which sets aside Rp 14.7 trillion to pay its 4.5 million civil servants, including school teachers and Armed Forces members.

This means a civil servant or an Armed Forces member gets only about Rp 250,000 ($110) a month.

Minister of Manpower Abdul Latief says he plans to audit the number of foreign workers in Indonesia. "There should be a limit to prevent foreign workers from coming here," the minister says.

In anticipation of the free market era in which many foreigners can be expected to come here to find jobs, H.J. Iskandarsyah, the Ministry of Manpower's Director General for Manpower Placement Affairs, said the government will steadily develop the skills of local workers through various training programs to make them competitive, and will make laws that protect their interests.

"We shall always do things for the benefit of our workers," Iskandarsyah said.

Sukiswo Dirdjosuparto, chairman of the IPPM Graduate School of Management, predicts that the trends in the local manpower situation will change in the near future.

In the past few decades there has been an increase in the number of local managers who speak English fluently, some trained in the West. These managers, who understand the local culture and perform better than their foreign counterparts, have become the first option for businesses in need of skilled professionals or managers, Sukiswo says. Expatriate managers will be tapped only as a second choice, he says.

When that change occurs, the door will be wide open for locals to take their turn. (raw/sim/jsk)