JAKARTA — Indonesia is making it easier for foreigners to work here – but they will have to study as well. A decree by President Joko Widodo that is set to take effect this month will simplify Indonesia’s procedures for issuing work permits to foreigners, which are often hampered by delays, arbitrary denials and revocations, not to mention compulsory bribes to civil servants just to stamp the paperwork.
Buried inside the order is a section requiring all expatriate workers to undergo formal Indonesian language training, an apparent first for any nation in Southeast Asia. The foreign business community has been caught off guard by the new requirement. “Our businesses want to be here and want to invest, but what they also want are predictable rules,” said A. Lin Neumann, managing director of the American Chamber of Commerce in Indonesia, which represents nearly 300 US companies operating in the country.
The United States is one of Indonesia’s largest foreign direct investors, in industries including oil and gas, mining, banking, technology, e-commerce and logistics. The language requirement “sends a negative message that foreigners are somehow unwelcome,” Neumann said. “This hurts the investment climate.” The order also applies to domestic companies, which are reacting with alarm.
“I think this is foolish; it’s stupid. It lacks clarity on what the objective is,” said Suryo B. Sulisto, a prominent Indonesian business executive and former chairman of the Indonesian Chamber of Commerce and Industry. “What are they trying to do – stop investment coming in?” he added. “It’s counterproductive.” The government has not explained the reasoning behind the language requirement. But it may be an attempt by Joko, who is running for re-election next year, to placate political rivals who say he is “opening the floodgates” to foreign workers by streamlining the process for obtaining work permits.
Indonesia, a country of 260 million people, currently has about 126,000 working Asian and Western expatriates, a low percentage compared with neighbours like Singapore and Malaysia. The complaints from Joko’s opponents stem partly from an increase in the number of Chinese manual labourers entering illegally on tourist visas to work on Chinese-funded infrastructure projects. As unregistered workers, they would not be subject to the new language requirement.
Suryo said it made little sense to address concerns about illegal foreign labour by imposing a language requirement on bankers, engineers and other professionals. “This is another part of bureaucracy where it’s a moneymaking opportunity for someone,” he said. “People will get into the business of issuing fake language certificates.”
Indonesia has a decades-old history of official corruption and is one of the most graft-ridden nations in Asia. It also remains a difficult market for foreign investors to master, ranking 72nd on the World Bank’s most recent Ease of Doing Business survey. In 2015, Joko publicly quashed a draft regulation requiring all expatriate workers to be proficient in the Indonesian language, saying it was bad for business.
But his own decree requires companies to arrange and pay for foreigners working in the country for longer than six months to take Indonesian language courses at local schools, and to provide attendance certificates. If they fail to do so, the companies and their employees could face unspecified sanctions that are being drafted by the Ministry of Manpower and Transmigration, which processes and revokes foreign work permits, according to Budiman, head of the ministry’s legal affairs bureau.
The order goes into force Tuesday, said Budiman, who like many Indonesians uses only one name. Some details, like how many class hours are required per week, are still being decided. Budiman said companies shouldn’t complain because the decree also reduces waiting times for work permits from months to days. “Don’t look at this issue from only one side,” he said. Johan Budi, Joko’s spokesman, played down any political infighting or the possibility of negative economic repercussions, insisting that the order does not require that expatriates be fluent in the Indonesian language to be employed.
“It is necessary for companies to provide the facilities for training expatriates” in the language, Budi said, “and there’s nothing wrong with foreign workers learning Indonesian. But it is not mandatory to be able to speak the Indonesian language.” Then why have such a rule?
“My reading is that the government is doing it to address concerns about foreign workers without having to annul the controversial decree,” said Marcus Mietzner, an associate professor at Australian National University in Canberra and a long-time researcher in Indonesian politics. “The latter would be an admission that they were wrong on this and thus would look bad,” he said.