Settlement of foreign labour market policy in ASEAN + 3 free trade perspectives in Indonesia

Indonesia's relationship with the ASEAN + 3 initially began in 1997 with the ASEAN Plus Three (APT) Summit. The summit resulted in an agreement of cooperation in the fields of trade, investment and finance. The agreement itself provides three broad implications for Indonesia (Verico, 2013). First, Indonesia must reduce import duty on imported goods, thereby encouraging increased imports for Indonesia. Second, Indonesia will face a large number of foreign direct investment (FDI) from ASEAN + 3 countries. Third, Indonesia will face an influx of foreign labours entering ASEAN + 3 countries. Based on its national origin, foreign labour from China dominates the Indonesia foreign labour industry. Referring to the list of permits for hiring foreign labour issued by the Ministry of Manpower and Transmigration, 21,271 labours (28.7%) of the total 74,183 foreign labours in Indonesia were from China. The exquisite numbers of trade transactions between Indonesia and China and the large amount of aid and cooperation between the two countries have led to this dominating increase in Chinese labours in Indonesia. In the January-November 2016 period, the number of foreign labours from China increased by 21.44% from the end of 2015. In addition to legal foreign labours, Indonesia also experienced issues in monitoring those than entered illegally. Besides information released in media news, no official statistics are available to estimate the amount of illegal foreign labours entering Indonesia. Illegal foreign labours found by the Ministry of Manpower and Transmigration during 2016 were as many as 800 TKA, most of which came from China, though reality in the field is much higher. This instability in statistical evaluation and insufficiency in information is due to Indonesia's lack of control system or database. A control system is necessary as both legal and illegal foreign labour may end up in the trade-off of local labour areas, which poses problems with Indonesia's high unemployment rates.