RI 'unprepared' for labor market competition

The Jakarta Post, Jakarta

Indonesian workers are unprepared for competition in regional labor markets among Association of Southeast Asian Nations (ASEAN) members, a business expert says.

Prasetiya Mulya Business School Dean Sammy Kristamuljana told the first Indonesian Business Conference on Wednesday that on paper the concept of cross-border labor competition sounded great.

"However, we may suffer badly since we are not ready for the competition, especially in the service industry," he said.

Based on the World Trade Organization (WTO) rulings, Indonesia should have liberalized its labor markets in 2003. However, Minister of Manpower and Transmigration Fahmi Idris said on Monday the government would to start opening the door to job seekers from countries grouped in ASEAN next year, and in 2008 to those from outside the association.

Kristamuljana said the lack of competitiveness of Indonesians in the labor market was illustrated by the employment of several managers from other countries, including the Philippines, in major Indonesian companies such as those belonging to the Salim group.

He said most opportunities for Indonesians to work in other ASEAN countries were currently limited to blue collar workers.

"These type of jobs don't last long as they can be terminated at any time," he said.

Indonesia needed to work hard at preparing skilled workers and managers to compete in the global market, he said. Universities and government institutions needed to make concerted efforts to increase the nation's skill set.

"The government may help in terms of financing and universities in terms of the quality of education."

Kristamuljana said his observations showed that many graduates of business and management schools were not making much effort to match their acquired knowledge with the conditions at their workplaces.

Meanwhile, the executive director of Prasetiya Mulya Business School, Djisman Simandjuntak, said that in order to improve competitiveness in the era of globalization, Indonesia needed to develop good corporate governance (GCG) practices.

However, collusion and nepotism continued to hamper their development, he said.

"Good corporate governance has a better chance of prevailing under competition rather than under collusive or nepotistic environments."

Simandjuntak said the basic requirements of good governance -- transparency, accountability, fairness and technology disclose -- needed to be achieved first.

"We are far behind Malaysia and Thailand in applying GCG," he said. -- (004)