AFTER falling to its first recession last year since the 1997 Asian financial crisis, Indonesia’s economic growth is expected to rebound this year.
According to the latest economic outlook from Oxford Economics commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW), the country’s gross domestic product (GDP) is forecast to rebound to a 6% growth in 2021, driven by increases in consumer and infrastructure spending.
Indonesia’s newly-posted ambassador to Malaysia, Hermono (pic), says he remains optimistic about South-East Asia’s largest economy pulling itself out of the economic rut, despite the looming risks.
As his government struggles to contain the Covid-19 outbreak which is nearing 980,000 cases and 28,000 fatalities, making the country the worst hit in the region, President Joko Widodo has been spearheading recovery efforts by striking a balance between the people’s health and the national economy, according to the envoy.
Hermono who goes by a single name, says he has a special mission in Malaysia – to improve the livelihood of the Indonesian migrant workers who have come here in search of greener pastures.
Top on his list is a new agreement with Malaysia on the Recruitment and Placement of Indonesian Domestic Workers, which lapsed in 2016.
The agreement, among others, provides a standard employment contract outlining the responsibilities of the employer, worker and recruitment agency concerned.
Hermono was ambassador to Spain before being posted here in December.
Between 2013 and 2015, he has served as deputy chief of mission at the embassy here, after which he was secretary-general of the Agency for the Placement and Protection of Indonesian Migrant Workers.
“Compared with Madrid, Kuala Lumpur will be a different ball game for me totally. There were just 1,460 Indonesian workers in Spain compared with the hundreds of thousands of them in Malaysia, ” he said, also pointing out that Indonesia and Malaysia are key members of Asean.
He told StarBiz about the changes he intends to bring here under an all-new plan of action.
Q: You came to Malaysia directly from Spain where you were the ambassador. Are such cross-postings unique for diplomats?
A: Indeed, it is unusual. And for me, unexpected! It could be because of my previous diplomatic experience in Malaysia.
There was an urgency to attend to matters here, mainly involving Indonesian migrant workers. The previous movement control order (MCO) put them in a spot. I need to look into these issues.
Q: How many Indonesian workers are there in Malaysia?A: Our records show that there are 704,000 Indonesians working in Malaysia.
These are the ones holding official permits. Indonesia has its largest overseas workforce here in Malaysia.
If you take into account those without permits, the actual figure is about 2.7 million, maybe up to three million.
But we lack details on the illegals. They only come to us when they face problems, like when their employer does not pay them.
Q: That is a huge number of undocumented workers. How do you propose to resolve it?
A: Well, Indonesia has its largest overseas workforce in Malaysia. And also the most number of undocumented workers. It is a very complex issue.
Some 120,000 Indonesian workers, mainly those who lost their jobs due to the MCO last year, were sent home since March.
And more want to head back. It is best that they do, otherwise there will be all sorts of social problems. We do not want this to lead to crime.
I have met the Immigration (director-general) on the recalibration exercise for foreign workers. The registration is conducted online, but we have a problem with the method of payment accepted, which is by credit or debit card, or e-Wallet.
But one cannot expect migrant workers to hold credit cards, let alone know how to use an e-Wallet. I proposed that bank transfers, if not cash, be considered.
I expect that 50,000 more Indonesian workers could leave if the department eases certain conditions, such as allowing payments to be made by bank transfer.
I am also reaching out to Indonesian organisations based here to assist us. I have met about 40 non-governmental organisations (NGOs) recently to seek their assistance with the exercise. They can help with the application processes involved. We are also hoping that the recalibration exercise can be extended past the June 30 deadline.
Under the recalibration exercise, the undocumented workers have a chance to become legalised, or head home by paying lower fines.
(Hermono speaking to officials during one of his inspection visits before the latest MCO was imposed.)
Q: You must have been handpicked for the Malaysian posting, due to your vast expertise in Indonesian migrant worker issues.
A: The priority is the protection of our migrant workers, that’s the first thing. It is a very sensitive issue in Indonesia.
The slightest thing can spark off a backlash. It involves public sentiment, so things need to be carefully, properly handled.
A lot of people are out to exploit our foreign workers. We have no obstacles on the economic and political fronts. The border issue is on the negotiation table.
Q: What changes are you working on?
A: A four-point plan of action. First and foremost, to regain our nationals’ faith in us. Second, to improve our services. There must be solutions to make life easier for them. Thirdly, I want to network with all elements of society here, by also reaching out to the NGOs.
During the earlier MCO, I was told that they helped distribute 137,000 food packages to Indonesian workers, who were in a desperate situation. We had eight truckloads of food despatched from the embassy to various locations in Kuala Lumpur and Selangor daily. Indonesian NGOs extended a helping hand in this important effort.
Our consul-generals in Johor and Penang also played their role.
Last but not the least, I want to build solid teamwork in the embassy. Indonesia has one of its largest foreign missions in the world in Kuala Lumpur. There are 160 local employees working with 33 Indonesian diplomats.
Before the MCO, between 1,000 and 1,200 of our nationals came to the embassy for passport renewals and all sorts of services. We need to face up to these tasks.
Q: Your predecessor introduced a shift system for embassy officers to work till late to help clear the backlog. Did that help?
A: We cannot continue like that with the pandemic raging. The standard operating procedure (SOP) for Covid-19 does not permit it. The solution lies in the use of technology. Digital technologies have become a critical enabler of connectivity facilitating the continuity of people’s daily lives during the global pandemic.
So, most applications will be done online. We have notified Jakarta on this. It is a learning curve for us here. We are also checking to see if the renewal of passports can be outsourced to maybe post offices and Bank Indonesia branches. We want to decentralise some of the services at the embassy.
We will also be turning more to social media. I have opened a personal Facebook account and have already appeared on FB Live three times. I want all my diplomats to engage our nationals on social media. I have also directed that a hotline operate round-the-clock to provide as much access to our nationals. Our officers will take turns to man the hotline.
Q: Indonesia is pushing for a new agreement with Malaysia on the recruitment and placement of its domestic workers. We are heavily dependent on your labour, can you tell us what you are pursuing?
A: The previous MoU on the recruitment of our domestic workers lapsed four years ago. It has not been renewed. But we have been continuing to send our workers to Malaysia despite having no agreement. This is against the law in Indonesia. So this cannot go on. There have been several back and forths on the MoU...negotiations cannot go on endlessly. We sent in our latest proposals at the end of November.
My concern is the vulnerable state of our domestic workers. As I said, there are many out to exploit them. If there is no new agreement, we may have to stop sending our domestic workers here.
Q: What’s standing in the way of a new agreement?
A: Basically two issues. We want a single hiring channel for the recruitment of our domestic workers, on a government-to-government basis. We want only both governments to be in charge. Presently, there are several channels operating. Malaysia made a unilateral decision to approve direct hiring of our domestic workers. You have this Sistem Maid Online under the Immigration Department, under which our workers are being sourced directly. This is illegal in Indonesia.
Under this system, the workers are brought in on social visit passes and then apply for work permits. There is no employment contract.
Even villagers are being tapped to work as maids here by some Indonesian agencies, who sent them over without any preparation or training at all.
The employer ends up being frustrated. In the end, the worker suffers abuse and in some cases, even torture.
And then this triggers the emotions and sentiments of Indonesians back home.
Q: Can you tell us about the state of affairs involving Indonesian workers here, as far as Covid-19 is concerned?
A: The number of Covid infections involving Indonesians here was about 414 in December. These were mostly construction workers. There were four fatalities. I have been checking on the condition of our workers as much as I can. I went to this factory in Ipoh and found our workers keeping well. I also recently visited Sime Darby Plantations in Carey Island. We are planning more outcalls to check on our workers.
We have also been conducting swab tests on embassy workers every fortnightly, besides observing the SOP of Malaysia’s Health Ministry. We also test those at the shelter (in the embassy grounds).
About 300 persons are tested every round. We have acted to close the embassy on two occasions, after several positive cases. Most of our staffers were asked to work from home. The embassy is disinfected every week. For us, it is a safety first policy.
Q: With Indonesia being the worst-hit in the region for Covid-19, it is predicted that 3.5 million people could lose their jobs due to the economic downturn. How is your government addressing this issue?
A: The government has helped out by granting subsidies and cash aid to those who lost their jobs. The national unemployment rate rose to 7%, from 5.2% about a year ago. Those affected were given monthly cash aid of 2.7 million rupiah (RM700), with poor families given basic items like rice and cooking oil. The local governments have also been helping. The stimulus package came up to 677.2 trillion rupiah (US$47.6bil) which was the largest under the national economic recovery programme.
We had 5.3% GDP growth during the first quarter, which contracted to 2.3% in the second quarter.
Towards the last quarter, it was 0% to 1%. The soothing news is that the Indonesian economy is expected to rebound in 2021, with growth projected at between 6% and 7% to make it a V-shaped recovery. There has been no lockdown in Jakarta. President Jokowi has been striving to strike a balance between the people’s health and the country’s economy.
Q: You talked about the importance of digital technology. What is being done on this front ?
A: The Indonesian government is paying great attention to the development of digital economy and is making proactive policy steps to strengthen digital transformation.
The Ministry of Communications and Informatics is giving priority to building and developing ICT infrastructure for equitable access and broadband connectivity throughout Indonesia, and is also encouraging digital transformation in the economic and government sectors, as well as preparing digital ecosystems and digital talent.
This includes formulating a national digital transformation roadmap to guide 10 relevant sectors - government, industries, education, health, commerce, financial services, properties, media and entertainment, tourism, and agriculture and fisheries.
The government also aims to develop regulations and funding mechanisms to spur the digital economy, such as drafting the bill on Personal Data Protection and Job Creation Law in the telecommunications and broadcasting sector. A National Data Centre will also be established by 2023. The government also emphasises on the supply and sustainable development of human resources in the digital field.
The communications and informatics sector can be an enabler sector to generate growth-enhancing effects in other sectors, as well as help restore Indonesia’s economy which is impacted by the Covid-19 pandemic.
Q: And what has been the impact so far, in terms of Internet usage?
A: According to Indonesia’s Communications and Informatics Ministry, a survey conducted in 2020 showed that Internet users in the republic had grown to 196.7 million, with a population penetration rate of 73.7%. This was an increase of 8.9% per from two previous surveys.
The government is also focusing on expanding Internet access and improving digital infrastructure, including developing high-speed Internet infrastructure in more than 12,500 villages or sub-districts, which will be the catalyst to various startups dominated by millennials, both based on culinary, services and online trade.
Based on the data from the Central Bureau of Statistics, the communications and informatics sector had contributed 4.25% to Indonesia’s GDP, while the sector, as the main element in driving the digital economy, has a growth rate that is always above the national GDP growth rate.
Q: Can you tell us about the significance of the inaugural Asean Digital Ministers conference hosted virtually by Malaysia last week?
A: It was a forum for the exchange of views and policies related to the use of the spectrum for telecommunication purposes, as well as matters related to the telecommunications industry in the South-East Asian region.
Themed ‘Asean: A Digitally Connected Community’, the meeting sought to strengthen cooperation among Asean countries towards building digital ecosystems as a pillar in the post-Covid-19 development plan. Among the highlights are the use of better digital services by Asean, which will allow our economies to recover faster from the Covid-19 pandemic.
The Industrial Revolution 4.0 has brought significant changes to various aspects of human life. We can now clearly observe how this change has become a powerful phenomenon that cannot be stopped throughout 2020 that has just passed. Companies are competing in innovating to win the market competition.
Q: On tourism, millions of foreign tourists fly to Bali each year to enjoy the beaches, terraced rice fields and just take in the sights. What is the situation there now with your border closed to non-residents?
A: Bali is being prepared for re-opening to international tourists.
There has not been a deluge of Covid-19 cases there, but still it has suffered economically due to its dependence on tourism.
In December, the UN World Tourism Organisation (UNWTO), in partnership with Indonesia’s Ministry of Foreign Affairs and Ministry of Tourism and Creative Economy, hosted a special Capacity Building Workshop on Restarting International Tourism in Bali.
The workshop had the participation of more than 30 leaders from across the tourism sector, with a further 150 experts and leaders joining virtually.
Discussions focused on the government’s strategy to restart tourism, including the formulation of policies, procedures, health infrastructure and immigration protocols adapted to reflect the new reality. Both the public and private sectors are working together to restart tourism for the benefit of not only visitors to Bali but for all stakeholders, including tourism workers and service providers.
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