It Turns Out Indonesia's Influx of Foreign Workers Doesn't Exist

(Bloomberg) -- Is Indonesia really being overwhelmed by foreign workers? We should be so lucky, says the nation’s investment chief.

As the country heads toward an election that will be fought over jobs and the economy -- against the backdrop of a rise in nationalist sentiment -- President Joko Widodo is battling to counter claims from lawmakers and opposition parties that Indonesia is facing an influx of workers from China and elsewhere.

“This paranoia about foreign dominance in our country is a fabrication of the politicians,” and the workforce actually needs far more overseas labor, Tom Lembong, chairman of the Investment Coordinating Board and a former trade minister, said at a World Bank event in Jakarta on Thursday.

The most recent data back him up. Foreigners make up less than 1 percent of Indonesia’s labor force and that share is dwarfed by regional peers such as Thailand and Malaysia. Lembong says the country lacks the right policies to attract global talent and up-skill its 131 million-strong workforce.

Indonesia will go to the polls in April in a re-run of the 2014 election that saw Jokowi defeat Prabowo Subianto. While voters are enjoying a jobless rate near a 20-year low, growth in Southeast Asia’s biggest economy is stuck at about 5 percent and foreign investment has slumped.

The nation faces a real struggle to “catch up to the 21st century requirements of modern industry and the modern economy,” said Lembong. “The good news is President Jokowi likes to take a hacker approach to such issues. Being confronted with a recalcitrant bureaucracy has never stopped him."

To contact the reporter on this story: Karlis Salna in Jakarta at ksalna@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Chris Bourke

©2018 Bloomberg L.P.