In a small town in Central Java, a young woman named Sari had just graduated from a vocational school with top marks in nursing. She dreamed of working at a local hospital, caring for her community. But the hospital was already overcrowded with applicants, and government recruitment had been frozen for years. Her parents were farmers and couldn’t afford to wait while she searched for something that might never come. So, through an agency, Sari signed a contract to work as a caregiver in Taiwan.The money was good. Her family built a new roof and finally bought a refrigerator. But Sari found herself looking after an elderly woman with dementia, working long hours in a language she didn’t fully understand. She missed home, struggled with loneliness, and sometimes cried at night. On a visit back home after two years, she saw her younger brother entering the same vocational school. He asked her, “Should I go abroad like you?”Sari paused and said, “If we all leave, who will take care of our own people?”That single sentence captured a quiet sadness. Labour migration may solve one family’s struggle, but it also raises a bigger question: what happens to a country when its most dedicated workers must leave just to survive?When a government actively encourages its skilled workforce to seek employment abroad because it cannot provide adequate job opportunities at home, the consequences eventually circle back to the government itself. In the short term, this strategy may seem convenient—reducing visible unemployment rates, boosting foreign remittances, and easing pressure on the domestic job market. However, over time, such a policy exposes deep-rooted governance failures.By outsourcing its labour to other economies, a government inadvertently admits its inability to build a resilient economy capable of absorbing and empowering its own citizens. It weakens national capacity in critical sectors such as healthcare, education, engineering, and innovation—sectors that rely on skilled workers to develop. It also risks public trust: when young, educated citizens see no future in their own country, the social contract between the state and its people starts to erode. Citizens begin to question the purpose of paying taxes or pursuing higher education if their own government offers no pathways for meaningful employment.Fundamentally, the responsibility to create job opportunities lies with the government. While the private sector, civil society, and global markets all play supporting roles, it is the state that sets the direction—through policy, infrastructure development, education reform, and economic strategy. A competent government does not merely manage job statistics; it builds ecosystems where businesses can grow, talent can thrive, and citizens can contribute with dignity. If it fails in this role, exporting labour becomes a temporary patch—not a cure—and the long-term cost is national stagnation.Indonesia ranks among the top countries with significant numbers of its citizens working overseas. According to official estimates, approximately 4.5 million Indonesians are employed abroad. The majority of these workers, approximately 70 per cent, are women who find employment in domestic roles or in manufacturing. Men, on the other hand, predominantly work in plantations, construction, transportation, and various service sectors.The reasons behind this substantial outflow of labour are multifaceted. First, domestic job scarcity, especially in formal sectors, has driven many Indonesians to seek opportunities abroad. Second, comparative wages overseas—particularly in neighbouring countries such as Malaysia, Taiwan, Saudi Arabia, Hong Kong, and Singapore—are considerably higher than local alternatives. Third, many family-run recruitment agencies have facilitated this migration, even though this system is often criticised for exposing workers to exploitation, extortion, and abuse .To illustrate with profiles: Indonesian women often work as housemaids or factory workers, providing essential support services abroad. Men find work in plantations—such as palm oil in Malaysia—construction sites in the Gulf, informal service jobs, and transport-related roles. Many of these roles are in countries where labour demand is high but local workforce supply is limited.Ultimately, the high number of overseas Indonesian workers stems from a combination of economic necessity, attractive wages abroad, and institutionalised migration pathways, even if they sometimes come with serious risks.Indonesian migrant workers are spread across several destination countries, with their rankings and job types reflecting regional labour demands and recruitment frameworks.Leading the list is Hong Kong, which hosted 99,773 Indonesian workers in 2024, making it the top destination. Most Indonesians employed there work in sectors like domestic help, caregiving, hospitality, transportation, healthcare, tourism, real estate, and education. Close behind is Taiwan, with around 79,000–83,000 Indonesians working in domestic roles, caregiving, manufacturing, and agricultural support, as demand surged under both formal and informal programmes.In third place is Malaysia, employing approximately 51,700–72,000 Indonesians in plantation work, domestic services, manufacturing, and informal jobs. Fourth is Japan, which welcomed around 40,000–120,000 Indonesians through the Specified Skilled Worker and Technical Intern programs, mostly in manufacturing, caregiving, construction, and agriculture. Rounding out the top five is South Korea, hosting about 10,000–35,000 Indonesians, primarily in manufacturing, agriculture, and fishing fleets, often on short-term contracts.
These destination choices reflect both economic pulls—like higher wages in ageing societies—and policy-driven channels such as recruitment agreements under Taiwan’s domestic helper visas and Japan’s formalised technical intern programme. As a result, Indonesian workers are primarily engaged in domestic care, eldercare, manufacturing, agriculture, construction, hospitality, and transportation roles—varied but largely low- to mid-skilled.
In the short term, the widespread employment of Indonesians abroad offers tangible benefits to the national economy. One of the most immediate impacts is the steady flow of remittances, which inject foreign currency into the economy, supporting household incomes, improving standards of living, and contributing to national reserves. These funds often allow families to invest in better housing, education, and small-scale businesses, especially in rural areas where job opportunities are limited. Furthermore, overseas employment helps relieve domestic labour pressure, especially when job creation at home is sluggish or insufficient.However, over the long term, the implications are more complex. While remittances may boost household consumption, an overreliance on foreign employment can result in brain drain, particularly when skilled or semi-skilled workers choose to migrate permanently or repeatedly. This could reduce the quality of Indonesia’s domestic labour pool and weaken its ability to transition into a high-skill economy. Additionally, the social cost of long-term migration—such as family separation, disrupted child development, and weakened community ties—cannot be ignored. The dependence on labour exports also risks discouraging the government from investing seriously in domestic job creation and industrial innovation.While the migration of workers provides short-term economic relief and financial opportunity, it can become a structural trap if not accompanied by policies that build a resilient and inclusive job market at home.While Indonesia certainly sends a significant number of its citizens abroad for work, it is not alone in this trend. In fact, India, with around 16.6 million of its people working overseas, stands as the world’s largest labour exporter. Indians abroad range from unskilled labourers in Gulf countries to highly skilled professionals in the IT and healthcare sectors. Close behind, Mexico, with roughly 13 million citizens working abroad—primarily in the United States—are employed in construction, agriculture, hospitality, and domestic services . Russia sends over 10.6 million workers overseas, including both blue-collar labourers and skilled professionals, largely to Europe. China has approximately 10 million citizens working abroad, spanning roles from manufacturing workers to students and technology experts. Lastly, Bangladesh exports around 7.5 million workers to Gulf states and Southeast Asia, most of whom work in construction, shipping, and domestic care.The underlying reasons for such large-scale labour migration are similar across these countries: limited domestic job markets, higher wages abroad, and established migration channels. For India and Bangladesh, historical ties and migration networks in Gulf nations make it easier to send both skilled and unskilled labour. Mexico's proximity to the US and entrenched migration systems support its large diaspora. Russia and China send a mix of professional and blue-collar workers as their citizens seek global opportunities in sectors like IT, academia, and manual labour—all driven by the search for better income and career advancement.Indonesian migrant workers are spread across several destination countries, with their rankings and job types reflecting regional labour demands and recruitment frameworks.Leading the list is Hong Kong, which hosted 99,773 Indonesian workers in 2024, making it the top destination. Most Indonesians employed there work in sectors like domestic help, caregiving, hospitality, transportation, healthcare, tourism, real estate, and education. In Hong Kong, the treatment of Indonesian migrant workers — particularly domestic helpers — presents a complex picture. On one hand, Hong Kong’s legal framework provides certain protections that are relatively stronger compared to many other countries employing foreign domestic workers. These include standard employment contracts, mandated days off, and a minimum wage specifically for domestic helpers. However, despite these formal regulations, many Indonesian workers still face challenges such as overwork, underpayment, lack of privacy, and in some cases, verbal or even physical abuse. A significant issue is the excessive recruitment fees imposed by agencies in both Indonesia and Hong Kong, which can trap workers in a cycle of debt and dependency. Nevertheless, Indonesian workers in Hong Kong have formed strong community networks, often supported by NGOs, religious groups, and local activists, which offer support, advocacy, and a sense of solidarity. Public attitudes in Hong Kong toward domestic workers remain mixed — while some employers treat them with dignity, others still carry a classist or discriminatory mindset.Close behind is Taiwan, with around 79,000–83,000 Indonesians working in domestic roles, caregiving, manufacturing, and agricultural support, as demand surged under both formal and informal programmes. In Taiwan, the treatment of Indonesian migrant workers varies significantly depending on the sector in which they are employed. Those working in formal industries such as manufacturing often benefit from clearer contracts, better wages, and more regulated working hours. However, Indonesian workers in the domestic care sector—especially those caring for the elderly—frequently face long working hours, little to no rest days, and limited freedom of movement, often living in the homes of their employers with little privacy. While Taiwan’s government has made efforts to improve migrant worker rights—such as launching helplines and legal assistance services—language barriers, dependence on employment agencies, and the isolated nature of live-in domestic work continue to make many Indonesian workers vulnerable to exploitation. Nonetheless, many Indonesian workers in Taiwan are known for their resilience and have built active communities, often gathering on weekends, staying connected through social media, and engaging in cultural or religious activities to maintain their mental and emotional well-being.
In third place is Malaysia, employing approximately 51,700–72,000 Indonesians in plantation work, domestic services, manufacturing, and informal jobs. There have been numerous reports over the years indicating that many Indonesian migrant workers in Malaysia have been subjected to unfair and, at times, inhumane treatment. These include long working hours without proper compensation, poor living conditions, lack of legal protection, and even cases of physical or emotional abuse. While not all Malaysian employers are guilty of such misconduct, the systemic vulnerabilities — such as limited legal safeguards for domestic workers and a general social bias against foreign labourers — have contributed to a recurring pattern of exploitation. Human rights organisations and both governments have acknowledged the issue, yet substantial improvements remain a work in progress. This has fuelled a perception among many Indonesians that their fellow citizens are often undervalued or mistreated while working in Malaysia, particularly in the domestic, plantation, and construction sectors.
Fourth is Japan, which welcomed around 40,000–120,000 Indonesians through the Specified Skilled Worker and Technical Intern programs, mostly in manufacturing, caregiving, construction, and agriculture. In Japan, the treatment of Indonesian migrant workers—particularly those who come under technical intern training programmes—has received both praise and criticism. On one hand, Japan offers structured programmes aimed at skills development, which theoretically provide valuable training and the possibility of upward mobility. However, in practice, many Indonesian workers have reported excessive workloads, poor living conditions, withheld passports, and limited legal recourse when mistreated. The language barrier and rigid work culture further exacerbate the sense of isolation and pressure, especially in smaller towns or rural areas. While Japan has gradually opened up more sectors for foreign labour due to its ageing population and workforce shortage, there is still a lingering perception among some employers that foreign workers are inferior or merely temporary labour. Despite these challenges, Indonesian workers in Japan often form strong support systems, including cultural associations, mosques, churches, and online networks that help them cope with homesickness, stress, and the pressures of adapting to Japanese society.Rounding out the top five is South Korea, hosting about 10,000–35,000 Indonesians, primarily in manufacturing, agriculture, and fishing fleets, often on short-term contracts. In South Korea, the treatment of Indonesian migrant workers has shown both progress and persisting concerns. Many Indonesian workers arrive through the Employment Permit System (EPS), which provides formal contracts, legal protections, and relatively decent wages, especially in sectors such as manufacturing, fisheries, and agriculture. However, despite the official framework, cases of workplace abuse, discrimination, excessive overtime, and poor living conditions still surface, particularly among those in smaller factories or remote farms. The hierarchical work culture in Korea, combined with language barriers and a strong emphasis on obedience, can make it difficult for workers to speak up or defend their rights. Nevertheless, compared to some other countries, South Korea has mechanisms such as counselling centres, hotlines, and migrant shelters — though not all workers know how to access them. Indonesian communities in Korea often play a vital role in supporting each other through social gatherings, religious activities, and online platforms that help reduce isolation and provide emotional strength in the face of hardship.
These destination choices reflect both economic pulls—like higher wages in ageing societies—and policy-driven channels such as recruitment agreements under Taiwan’s domestic helper visas and Japan’s formalised technical intern programme. As a result, Indonesian workers are primarily engaged in domestic care, eldercare, manufacturing, agriculture, construction, hospitality, and transportation roles—varied but largely low- to mid-skilled.
The world’s largest labour forces can be traced back to populous and rapidly developing nations, where economic participation is broad and growing. Leading this group are China, with approximately 781 million people in its labour force; India, with around 596 million; the United States, with about 171 million; Indonesia, with 143 million; and Brazil, with roughly 106 million workers. These nations enjoy scale—large populations, young demographics, and expanding economies—that drive high labour participation. For instance, India continues to industrialise and urbanise, while China remains the world’s manufacturing powerhouse, and Indonesia combines demographic growth with economic diversification.On the opposite end, the smallest labour forces belong to tiny or resource‑rich countries with small populations, niche economies, or heavy reliance on capital‑intensive industries. Among the smallest are Tonga, with around 32,000 workers; Belize, with approximately 177,000; Brunei, around 220,000; Iceland, about 200,000; and Gabon, with roughly 718,000 people in work or seeking work. These countries often have limited domestic markets, economies driven by extractive resources or tourism, and small youth cohorts entering the workforce each year—factors that constrain both economic potential and policy ambition.The difference between these two groups is telling: while large labour-force countries wield demographic advantages and global economic influence, smaller ones often balance high per‑capita wealth with limited labour demand and high vulnerability to external shocks. Each context demands tailored policy responses—mass-scale in the former, highly specialised in the latter.In recent global data, several nations stand out for having exceptionally high numbers of unemployed individuals, revealing deep structural issues in their economies. Notably, Eswatini leads with around 37 percent of its labour force without work, a result of sluggish economic growth and limited diversification. Close behind, South Africa registers above 30 percent unemployment, driven by persistent inequality, skill mismatches, and a history of socio-economic exclusion. Djibouti also features alarmingly high rates (over 26 percent), influenced by a small economy that struggles to absorb a growing workforce. Palestine—including West Bank and Gaza—faces around 24 percent unemployment amid political instability and restricted economic activity. Meanwhile, Kosovo endures over 30 percent unemployment, the result of its transition from conflict, youth-dominated joblessness, and weak private sector capacity.By contrast, a handful of countries boast famously low unemployment, often due to small populations, abundant natural resources, or predominantly agrarian economies. Qatar holds one of the world’s lowest rates at 0.1 percent, supported by its oil-and-gas sector and tightly controlled labour policies . Niger and Cambodia also show extremely low official jobless numbers (around 0.4–0.5 percent), partly because their economies rely on subsistence farming and informal employment, which official statistics often overlook. Thailand, with around 0.7 percent, benefits from a balanced mix of industry, tourism, and rural labour absorption . Finally, the Solomon Islands reports roughly 0.7 percent unemployment, a reflection of its small-scale economy and high informal sector involvement.These disparities highlight a stark reality: countries with high unemployment often contend with economic stagnation, lack of diversification, and social fragility. On the other hand, nations with minimal joblessness often rely on economic models—such as resource dependency or informal agrarian systems—that can mask underlying vulnerabilities.Indonesia’s labour force stood at around 152.11 million people in August 2024, showing significant growth compared to previous years. Meanwhile, the official unemployment rate was 4.91 percent, equivalent to approximately 7.47 million persons, representing a slight improvement from the year before.In macroeconomic terms, these figures suggest that Indonesia is successfully expanding its pool of job seekers—driven by population growth, greater female participation, and rural-to-urban migration—but the economy is only partly absorbing them. The employment growth (an additional 4.79 million jobs in 2024) was robust, especially in agriculture and services, yet underemployment and the struggle to create middle-class opportunities remain challenges.The encouraging drop from over 5 percent in 2023 to below 5 percent in 2024 reflects economic recovery post-pandemic and improving labour policies. Still, the fact that nearly eight million people remain unemployed—with youth unemployment persistently high—signals structural issues: mismatches in education and skills, slow industrial diversification, and regional disparities.Furthermore, the rising size of the labour force (up by 4.40 million in a year) outpacing job creation explains why, despite falling unemployment rates, the absolute number of unemployed actually increased. This underscores the need for Indonesia to focus not just on job quantity but quality—creating sustainable, formal-sector, and middle-income employment across regions.Employment plays a pivotal role in determining a country’s economic direction. High employment rates generally signal productive economies, stable households, and robust consumption. Conversely, persistent unemployment reflects structural failures—ranging from technological disruption to poor policy planning—and often leads to poverty, inequality, and social unrest. Thus, employment is not only an economic concern but a political and moral one.
Tuesday, July 1, 2025
The Three Economic Big Issues (8)
