Empty Houses And Jobless Maids: Indonesia's Expat Exodus Gathers Pace


JAKARTA, June 28 (Reuters) - Foreign workers are leaving Indonesia at an increasing rate due to the slump in commodity prices that has forced resource companies to slash jobs at a time when the government has also introduced tighter regulations on expatriates in Southeast Asia's biggest economy.

The number of temporary residential permits issued to foreigners, including renewals, has fallen for the past few years to 171,944 in 2015 from 194,162 in 2013. In the first five months of this year, there were 72,399 issued but many of those who provide services to expats say they expect a further drop over the whole of 2016 as they are seeing very few new arrivals.

As a result, rents on upmarket homes in Jakarta have plummeted and enrolment at international schools has fallen.

"The expat drought has been really noticeable in 2016," said Deborah Minicola, a Jakarta-based technical advisor at international relocation company Allied Pickfords. "This time the expat community has been hit from so many angles."

The outflow is likely to dent higher-end consumption and drive up unemployment, economists say, as big-spending expats tend to hire multiple workers ranging from housemaids and drivers to gardeners and bodyguards.

Some workers who recently lost their jobs are finding it difficult to get new employment.

Christiana Ambar Putriani is one example. She has been looking for a job as a part-time housekeeper in Jakarta after her former bosses left for South America a few weeks ago. She hopes to work for an expat family again as foreigners tend to pay higher wages but it is getting tougher to find such jobs, she says.

The Australian Independent School in Balikpapan, a city in Indonesia's resource-dependent province of East Kalimantan, expects a 36 percent reduction in its student body this year, said human resources officer Ni Ketut Novia. Three international schools in the city have shut over the past 2-3 years due to the mass layoffs at mining contractors and a drastic cut in expat allowances, she said.

The expat exodus will also create skill shortages that could hold the country back when the commodity downturn is reversed.

Low resource prices and a slowdown in demand from China, one of Indonesia's top export markets, have reduced the incentive for exploration or production in the oil and gas and mining sectors, forcing companies to hack back on staff costs.

The mining, oil and gas and geothermal sectors accounted for 7.62 percent of Indonesia's gross domestic product in 2015, down from 11.81 percent in 2011. Drilling contractors and exploration site surveyors are among the worst-hit, industry experts say.

Oil and gas companies operating in the country include Chevron Corp, Total SA and Exxon Mobil Corp. Total's Indonesia spokesman said the company has "manpower planning which is in line with our evolution of activities." Chevron, which is selling assets in Asia including some in Indonesia, declined to comment. Exxon also did not comment.

Policy Confusion

A PwC survey of 53 firms in the oil and gas sector, released in May, found that almost three-quarters of respondents expected a smaller expat workforce in future, partly because of tighter controls on hiring foreigners. (http://pwc.to/28OGZ0V)

Indonesia opened up dozens of business sectors recently to foreign investors in a move described by President Joko Widodo as a "Big Bang" liberalization of the economy.


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