RI economic boom draws expatriates

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)