How can Indonesia maximize its demographic bonus and global labor opportunities while contributing to the broader economy? According to the Golden Indonesia 2045 Plan of Labor Long Term Plan Document (RTKJP), the open unemployment rate target in 2045 is 4%. To achieve its strategic vision of the unemployment rate and harness the demographic bonus, Indonesia should effectively leverage its human capital by deploying Indonesian migrant workers (PMI). While public perception often associates PMI with domestic workers or unskilled labor, IBC conducts a study focusing on low- and medium-skilled PMI, encouraging Indonesia to recognize its labor force growing skills and capabilities to meet global labor demands.
Indonesia faces internal challenges that obstruct its abilities in effectively deploying skilled PMI. This setbacks cause them to be less competitive at times compared to migrants deployed by peers like India, Philippines, and Vietnam. However, job opportunities abroad are widely available due to global shortages. For example, Japan and Germany experiences shortages of 250,000 and 17,656 caregivers respectively. Japan also experiences a shortage of 195,000 welders, while Australia reports a need for 70,000 welders. Meanwhile, South Korea, Japan, and Australia report a shortage of 14,000, 36,500, and 26,000 horticulture workers respectively. These labor shortages present an opportunity for PMI to prepare themselves and contribute to addressing this global workforce gap.
Although Indonesia boasts a substantial number of low and medium-skilled workers capable of fulfilling these needs, it is still markedly underrepresented in global labor markets. This underutilized workforce—often termed “hidden gold”—has the potential to enhance Indonesia’s global standing, driving economic growth through increased remittances, lowering unemployment rates, and enhancing workforce skills. This initiative aims to establish Indonesia’s overseas labor sector as a fundamental element of the country’s economic plan, utilizing specialized upskilling programs to tap into this potential and boost the nation’s competitiveness.
Dive deeper into IBC’s focus group discussion on Indonesian migrant workers to explore our the opportunities, challenges, and strategies to fully maximize the potential of this “hidden gold” for Indonesia’s economy.
