How Many Foreigners Actually Work in Indonesia? No Hoax!

According to data from Indonesia's Investment Coordinating Board (BKPM), a government agency, there are currently 74,183 foreigners working in Indonesia. This is actually a very low figure, particularly when we compare it to Indonesia's total workforce. Indonesia's workforce currently numbers about 120 million individuals (while the total population numbers over 255 million people), implying that foreigners only account for 0.062 percent of the nation's total workforce.

Thomas Lembong, Head of BKPM, says this ratio is actually extremely low. For example, in Singapore about 36 percent of the workforce is foreign, while in Malaysia and Thailand the figures are 15.3 percent and 4.5 percent, respectively. In a country such as Qatar foreigners form a whopping 96 percent of the nation's workforce.

Although the latter is an extreme case (and therefore weak point of reference), the above-mentioned figures should ease the worried minds of those that are overpowered (emotionally) by the hoax that claims 10 million Chinese workers entered Indonesia. In fact, the opposite situation exists: the number of expats working in Indonesia fell over the past five years amid the commodity slowdown (although over the past two years there an increase emerged). It is assumed that this declining number is particularly caused by the slowdown in Indonesia's oil & gas sector and the fact that several major foreign oil companies have reduced their Indonesian assets.

The truth is that the number of foreigners working in Indonesia is too low. To become an upper middle income country (let alone a high income country) the presence of foreign workers (provided they have high skills and knowledge) would be a positive (and much-needed) matter for Indonesia as these expats can transfer their skills and knowledge to Indonesian workers. Moreover, a limited number of foreign workers in Indonesia could also be a sign that foreign direct investment (FDI) is too small, while FDI is actually needed to bring the economy of Indonesia to higher levels.

Number of Work Permits (Izin Mempekerjakan Tenaga Kerja Asing, IMTA) Issued to Foreign Workers:

	2011	2012	2013	2014	2015	2016
Number of Foreign Workers	77,307	72,427	68,957	68,762	69,025	74,183

^{Source: Ministry of Manpower}

Regarding the number of Chinese workers in Indonesia, Lembong stated that there are around 21,270 Chinese workers currently active in Indonesia, which is indeed a large chunk of the total number of foreigners working in Indonesia. However, it should also not be forgotten that FDI from China into Indonesia in the January-September 2016 period stood at USD $1.6 billion (hence being the third-largest foreign investor in Indonesia in this period), and thus creating a significant amount of new employment opportunities for local Indonesian people.

Total FDI into Indonesia in the January-September 2016 period created 975,898 new employment opportunities (957,932 of these positions were filled by Indonesians).

Lastly, fewer expats living in Indonesia impacts on the Indonesian economy because this group forms a "big spender" group. In fact, often they create employment for the lower-class Indonesians. For example, an expat family living in a house will usually hire one or more housemaids, or nannies, drivers, gardener and guards. With the return of these expats to their home countries, these Indonesian workers will need to find new jobs to make a living.

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