Dialog on “ASEAN Economic Community and Labor-related Issues”


n Tuesday, 19 January 2016, The Indonesian Institute in cooperation with SuaraKebebasan.org held a public discussion on “ASEAN Economic Community and Labor-related Issues”. This event took place at the office of The Indonesian Institute. The objective of this event was to discuss labor-related issues in the context of the ASEAN Economic Community (AEC) from various perspectives, such as policymakers, market participants, as well as academics. In addition, this discussion is also expected as a means to generate feedback on the policies that have been taken by the government, and the policies, which are currently being prepared.

The speakers for this discussion were Minister of Manpower and Transmigration, Hanif Dhakiri, Ninasapti Triaswati of The Indonesian Institute and an economist from FEB UI, as well as Muhammad Iksan from SuaraKebebasan.org. The discussion, which lasted for approximately three hours was moderated by Arfianto Purbolaksono of The Indonesian Institute. To start off the discussion, Adinda Tenriangke Muchtar as the Program Director of The Indonesian Institute, and Editor-in-Chief of SuaraKebebasan.org conveyed her remarks and introduction to the discussion to give an overview to the participants about the topic and the results expected from this discussion.

In the first session, Ninasapti Triaswati provided an overview of the positive and negative impacts of the implementation of AEC, including how this agreement would influence the labor conditions in Indonesia. She believed that the implementation of AEC will provide benefits for Indonesian products because the market capacity will be more widely spread. However, it should be noted that the willingness and ability of local businesses to compete in a free market is still very low. In reality, only a handful of local entrepreneurs are able to expand into global markets. Therefore, the efforts to boost the interest of local entrepreneurs in the international market are something that needs further considerations.

Specifically in the labor sector, AEC seems to able to expand the labor market. However, currently, the Indonesian labors have not been able to generate maximum added value. It is then also worsened by the low level of formal education obtained by domestic workers. Therefore, Indonesia needs to improve the quality of its workforce through education, both formal and informal, as well as the certification of competence in accordance with a benchmark in Indonesia. Better information systems for workers also need to be of concern because with a well-maintained data base, then planning, implementation, and evaluation of employment will be much easier to be conducted.

After the first speaker provided her arguments, Minister Hanif Dhakiri conveyed his views related to the topic of discussion, as well as various policies, which have been implemented by the government in the labor sector. According to him, in general, AEC is a form of consolidation of the countries in the region in order to raise competitiveness in the global contestation. The outflow of skilled labor within the AEC is the main focus of every country.

Unfortunately, labour-related issues in Indonesia are still considered as marginal issues. Therefore, he invites the entire community to make this issue as an important issue that must be addressed accordingly. In free trade, strong competitiveness will be key to the success of a country. Unfortunately, Indonesia’s competitiveness in the global market is still low because Indonesian workforce’s level of education is still low. There is also an urgent need to create a highly skilled workforce. Therefore, currently the government is creating short-cut, by providing skills trainings to the people. Thus, the productivity of the community can be improved with in a relatively shorter amount of time.

Currently, the government is focused on the policy to accelerate the increase of labor competencies, certification, and control of foreign labors. For Minister Hanif, access to certification and quality of certification for Indonesian workers today needs to be encouraged. It is also important for Indonesia to create groups of the range of certification schemes and in order create less confusions for the labors. Thus, workers from Indonesia are expected to be able to increase its productivity and able to compete in the ASEAN market, so as to take advantage of globalization. Although the labor sector still has quite a lot of work to be done, the government hopes that people remain optimistic to face the AEC.

On the third session, Muhammad Iksan as the representative of SuaraKebebasan.org expressed his views related to the implementation of AEC. According to him, AEC is a matter that is unavoidable or often called as the point of no return. Optimism is the key, but people also need to remain vigilant to the changing market place. According Iksan, with the implementation of AEC, Indonesia is not only a mere market as many people say, but it also is believed to be a supplier for the Southeast Asian market.

Unfortunately, Indonesia does not currently have the advantage that characterizes the nation to be known in the international market. Therefore, it is important for the government to undertake a mapping of the domestic industry in the future. He also added that with the implementation of AEC, competition in the market will also increase. This must be appreciated because basically the consumer will have a more varied selection of products.

In the Q&A session, participants from various backgrounds, including civil society, academia, media, and government gave its views on this issue. One of the important points of the discussion was the demographic bonus to be obtained by Indonesia in the next few years.

From that question, it was agreed that the governments need to learn from other countries that have successfully handled the demographic bonus. Blueprint for handling the demographic bonus is also worth noting; therefore policy interventions can be performed quickly and accurately. The three speakers also urged civil society and academics to play their part in safeguarding the important issues for labor-related policies in the country.