Indonesian President Joko Widodo welcomes FDI because it opens up employment opportunities for the local population, introduces new technology and knowledge to Indonesia, and helps to integrate the domestic economy with the global economy. Considering the 2000s commodities boom ended a long time ago, while household consumption has remained subdued in recent years, Widodo regards FDI as a good (alternative) source for macroeconomic growth.

However, the aforementioned presidential regulation sparked criticism from part of Indonesian society. For example, labor unions feared an "invasion" of low-skilled foreign workers (mainly from China) as a consequence of easier regulations (despite the fact that the new regulation only allows skilled foreign workers to be employed in Indonesia).

And over the past couple of days another issue - also related to the regulation - became a controversial topic (not only in Indonesia but also abroad). It involves haziness surrounding article 26 of the Presidential Regulation. This article (and more specifically 26, 1[C]) states that "every employer of foreign workers [in Indonesian: Tenaga Kerja Asing, or TKA] is required to facilitate Indonesian language [Bahasa Indonesia] training to the foreign worker."

From article 26 we can conclude three things:

(1) a foreign worker does not need to learn/master Bahasa Indonesia prior to his/her move to Indonesia;

(2) it is the responsibility (and obligation) of the employer to offer language training to the foreign worker;

(3) during the foreign worker's stay in Indonesia he/she needs to learn Indonesian.

However, Heri Sudarmanto, Secretary General at Indonesia's Manpower Ministry, informed that this article (26, 1[C]) should not be taken too strictly. After all, there is no requirement for the foreign worker to obtain an Indonesian language degree or certificate. He also added that if this regulation is not adhered to, then the foreign worker would still be able to continue working in Indonesia.

As such, it seems that the government only encourages foreign workers to learn Indonesian through the article but has not made it truly mandatory. After all, there are no consequences (or sanctions) for both the foreigner and the Indonesian employer in case the requirement is not fulfilled.

Moreover, it remains unclear what the "language training" that needs to be offered by the employer to the foreign worker actually entails and whether the foreign worker is allowed to decline this offer. Does the employer need to force the foreign employee to follow a course at an accredited language institution or does it count as "language training" when the employer - or other Indonesian employees - simply greet the foreign worker with the phrase "selamat pagi" (meaning: good morning) every day? After all, the fact that no degree/certificate is required means that there is basically no quality-control. If after one year of working in Indonesia the foreigner can only utter the phrase "selamat pagi", then he is simply a slow learner (but does fulfill the requirement).

In conclusion: foreigners and domestic employers (who are employing foreigners or who want to employ foreigners) do not need to worry at all about the "mandatory Bahasa Indonesia" regulation. The government does encourage foreign workers to learn Indonesian but it will not be enforced in any way.

Lastly, one piece of advice from Indonesia Investments: those foreigners who (are planning to) live and work in Indonesia for, well, at least more than one year it is very fruitful to learn Indonesian. Many people in Indonesia (for example taxi drivers, waitresses, cashiers, etc) cannot speak foreign (non-Indonesian) languages. But you will need to communicate with them (almost) on a daily basis. It significantly helps the communication if you are able to use Indonesian (even if you only have rudimentary skills). Moreover, there exists a big link between language and culture. Therefore, if you want to understand (or learn) Indonesian culture, then learning the Indonesian language is a crucial start.

Read more:

New Regulation Makes it Easier for Foreigners to Work in Indonesia
Foreign Workers in Indonesia: a Threat or Tactic to Gain Votes?

This article was written by Richard van der Schaar, Managing Director of Indonesia Investments. He obtained his Masters degree in Southeast Asian Studies from Leiden University (the Netherlands) and now focuses on economic and political developments in Indonesia.