JAKARTA, June 29 — A stream of expatriates is heading for the exits in Indonesia.
The number of foreign worker permits has gone down significantly in the first half of the year, as Southeast Asia’s largest economy slashes jobs.
The outflow is pushing down rents, emptying out upmarket neighbourhoods and international schools.
“The mining and oil and gas sectors are significant contributors to Indonesia’s economy. So a slowdown in demand from China has hit Indonesia hard. The low prices of commodities have also reduced the incentive for exploration or production, and as a result many companies are cutting back on their workforce, particularly the expats because they’re seen as expensive,” says Eveline Danubrata, a Reuters Indonesia reporter.
But the exodus is about more than saving money.
With nationalism on the rise, the government is clamping down on foreign workers, getting pickier about approving work permits, and setting an age ceiling of 55 for sectors like oil and gas.
Economists warn the shrinking expat pool will likely hit the economy because not only are foreign workers big spender, they’re employers, too.
“There is this notice board at a supermarket in Jakarta which is popular with expats and it’s covered with resumes from maids, drivers, gardeners and even body guards. So all these people are now looking for jobs,” Danubrata says.
The business community says the government is sending mixed signals; opening up to foreign investment, while closing the door to some foreign workers.
Indonesia is already struggling with a skills shortage and the American Chamber of Commerce says that the exodus is going to make a bad situation worse. — Reuters
