31 July 2007
Jakarta -- Indonesian migrant workers, a significant yet often marginalized contributor to the economy, are to receive more government support in the form of cheap loans and improved worker protection schemes during their employment.
The planned loans, which are expected to help unskilled workers finance their job searches abroad, will carry annual interest rates of 6 percent or less, Manpower and Transmigration Minister Erman Suparno said.
The government will also help provide the collateral commonly required for commercial bank loans, whose average interest rates are at present above 10 percent.
"We want to support migrant workers," Erman told reporters Monday after a meeting with Coordinating Minister for the Economy Boediono.
"With the loan scheme, they won't have to sell their paddy fields or other property (to pay the expenses to go abroad)."
Erman said the amount of loans to be disbursed would depend on the banks involved. State lenders Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) are among the banks that have expressed interest in the program.
The loans will be guaranteed against a "worker's insurance fund", which is still being discussed as part of deliberations of Indonesia's new labor law.
"Further guarantees will come from the workers' permits being issued by related ministries and regional authorities," Erman said.
There are currently about 2.7 million unskilled migrant workers, most working as housemaids or construction workers. They contribute to the economy through the remittances or income they send back home.
Last year, remittances by migrant workers amounted to some US$3.4 billion in foreign exchange. This was 1 percent of Indonesia's gross domestic product or 6 percent of forex reserves.
Erman previously talked about funds of up to Rp 80 trillion to help finance the sending abroad of four million migrant workers by 2009. Bank Mandiri last year disbursed Rp 200 billion in total lendings for migrant workers, each receiving between Rp 15 and 20 million at commercial interest rates.
Many migrant workers fall prey to illegal lenders charging up to 100 percent interest, or have to sell off their belongings to raise at least the Rp 10 million needed to cover expenses for passports, exit tax and airplane ticket.
The situation is made worse because many workers are exploited by corrupt job placement agencies, customs officials and employers.
The latest case was that of Ceriyati, a housemaid who was abused and not paid her wages by her Singaporean employers.
Erman said the government would continue improving the skills and protection for migrant workers.
This includes working on legal protection agreements with countries that are the main destinations for Indonesian migrant workers, such as Saudi Arabia, Malaysia, Brunei and Singapore.
"Pending problems on this issue are mainly in the different laws with these countries, particularly laws relating to domestic household matters," he said. "We also have to work on providing legal counselors for migrant workers abroad."
Urip Hudiono
