|Indonesia Update | April 12, 2018
Authors: Kim Yaeger, Artha Sirait, Ian Saccomanno and Jade Hoang
|THE COUNCIL'S TAKE|
New Regulation on the Recruitment of Foreign Workers
On March 29, the Government of Indonesia issued Presidential Regulation No. 20/2018 on the Recruitment of Foreign Workers (available here in Bahasa Indonesia) to simplify the permit application process for foreign workers and expand work opportunities in the country. Effective from June 29, 2018, the new regulation will revoke Presidential Regulation No. 72/2014 currently governing the same subject. The new regulation extends the scope of employers of foreign workers, allowing qualified employers operating within certain business sectors to recruit foreign workers who are currently working in similar positions at other companies. In addition, Foreign Worker Recruitment Plans (RPTKA) which have been approved by the Ministry of Manpower are now also considered valid permits for the recruitment of foreign workers (thus making them similar in function to Foreign Worker Recruitment Permits IMTA). Previously, employers were required to secure approvals for both RPTKA and IMTA. This initiative is a follow-up by President Joko Widodo in cooperation with Vice President Kalla, Minister of Law and Human Rights; Minister of Manpower; Minister of Trade; Minister of Industry; and Minister of Marine Affairs and Fisheries to discuss channels that can be utilized to stimulate investment, in an effort to improve Indonesia’s business environment and boost competitiveness.
Below are some important changes introduced by the new regulation:
For employers of foreign workers
For foreign workers
More detailed guidelines will be issued by Ministry of Manpower at a later date though currently not set.
Indonesia Launches Roadmap for Industry 4.0: “Making Indonesia 4.0”
On April 4, the Ministry of Industry launched a “Making Indonesia 4.0” roadmap as part of the 2018 Indonesia Industrial Summit aimed at accelerating the development of the country’s manufacturing industry. The roadmap identifies five core manufacturing sectors, deemed as the backbone of Indonesia’s economy namely: food and beverages; chemical; textile; automotive; and electronics. “Making Indonesia 4.0” utilizes key technologies of the Fourth Industrial Revolution including the Internet of Things, Artificial Intelligence, Human Machine Interface, robotics and sensor technology, and 3D Printing technology to boost the industry’s output and efficiency.
Announcing the launch of the roadmap at the Jakarta Convention Center, Minister of Industry Airlangga Hartarto stated his confidence that this initiative presents a timely opportunity for Indonesia to upgrade its industry to make the country a competitive player in the new global context. In the early 2000’s, Indonesia’s manufacturing industry contributed 27.4 percent to the nation’s GDP. However, the figure fell to 21 percent in the third quarter of 2017. The new roadmap is expected to boost Indonesia’s economy by 1-2 percent, putting GDP growth rates at 6-7 percent per year. By 2030, Indonesia’s manufacturing industry is targeted to contribute between 21-26 percent to its GDP and job creation is estimated at 7-19 million.
In addition, “Making Indonesia 4.0” also contains ten cross-sectoral national initiatives to:
For such an ambitious initiative to succeed, in addition to preparing its labor and market, Indonesia also needs to ensure the literacy of policymakers in producing supportive regulations as a platform for growth. The initiative alone is commendable although it will be significantly affected if there is a lack of understanding in Industry 4.0. From an ASEAN perspective, ASEAN manufacturing has been overshadowed by the rise of Chinese factories in the past decade. The digital technologies associated with Industry 4.0 can help ASEAN manufacturers including Indonesia overcome relatively low productivity rates, although it requires a clear understanding of a shared vision of its potential benefits, and an environment that encourages implementation.
|IN THIS UPDATE|
It's official: Prabowo to join 2019 race The Jakarta Post 12th Apr 2018
Government seeks port and shipping efficiency The Jakarta Post 12th Apr 2018
Indonesia tries to lift trade barriers in Africa The Jakarta Post 11th Apr 2018
Energy minister opposes mining law revision The Jakarta Post 12th Apr 2018
Government transfers Rp 38.13 trillion PGN shares to Pertamina The Jakarta Post 12th Apr 2018
Balikpapan oil spill: What we know and don’t know The Jakarta Post 11th Apr 2018
New fuel distribution policy to maintain low inflation: Official The Jakarta Post 10th Apr 2018
Borneo oil spill costs Indonesia’s poor The Interpreter - Lowy Institute 9th Apr 2018
Bank Indonesia remains alert on rupiah exchange rate The Jakarta Post 12th Apr 2018
Govt destroys Rp 7b in illegally imported Chinese fruits The Jakarta Post 12th Apr 2018
Land allocated to restore forests, ecosystem in Puncak The Jakarta Post 10th Apr 2018
Autoimmune disease patients hope for better care The Jakarta Post 11th Apr 2018
Health app offers HPV vaccination home service The Jakarta Post 6th Apr 2018
Q&A: BPJS Kesehatan, health for all Indonesians The Jakarta Post 6th Apr 2018
Bank Indonesia to launch QR code payment regulation The Jakarta Post 4th Apr 2018
Indonesia goes hi-tech in hunt for tax assets after amnesty Reuters 4th Apr 2018
USTR flags new digital trade barriers in Indonesia Inside Trade 4th Apr 2018
5th BATIC to Commemorate Borderless Digital World Markets Insider 4th Apr 2018
Indonesia selects key sectors for industrial revolution drive Xinhua 4th Apr 2018
West Kalimantan to have new port in 2019 The Jakarta Post 12th Apr 2018