It is interesting to note that Indonesians who work overseas contribute significantly to the welfare of their families (living in Indonesia) as well as to the Indonesian economy as a whole. Currently, more than nine million Indonesians work abroad (for example in Singapore, Malaysia, Hong Kong), equivalent to almost seven percent of Indonesia's total labor force (only China and the Philippines have more migrant workers working abroad). Those Indonesian migrant workers sent more than IDR 118 trillion (approx. USD $9 billion) back to Indonesia in remittances in full-year 2016, hence their contribution to the Indonesian economy is large (these workers are among the country's top foreign exchange earners).

Recent research also shows that labor migration contributes directly to improving people's lives. In fact, the skills that are learned abroad help these workers to find better jobs on their return to Indonesia. However, the World Bank suggests that transforming labor migration into a professional and modern sector on par with other sectors of the economy, and incorporating international labor migration into a broader job creation strategy.

The World Bank does acknowledge that the Indonesian Government has made progress. For example, it designed a law that aims to protect Indonesian workers abroad (and was recently approved by Indonesia's House of Representatives). Another example is the 'productive migrant worker village' program in the country's rural areas. However, the Washington-based institution adds that reform could improve enforcement of labor contracts, provide a safer workplace, and ensure personal safety and well-being.

The report's recommendations include:

  • Creating a professional job marketplace by strengthening the skills of migrant workers in response to overseas demands and standards, and improving transparency in the overseas job market.
  • Streamlining the documentation and pre-departure processes.
  • Improving protection for workers abroad through legally binding bilateral agreements and ramping up the use of labor attachés in destination countries.
  • Sustaining the benefits of migration and remittances by facilitating the re-integration of migrants into the local labor market and encouraging longer-term investments, such as in education and health.
  • Increasing coordination among institutions involved in the migration process.

What are the benefits of migration for Indonesian workers?

  • Obtain employment; for many Indonesian migrant workers the job abroad is the first paid job they ever had. About 56 percent of migrant workers were primarily engaged in housekeeping or unpaid work before migrating, leaving just 44 percent with experience of a paid job before working abroad.
  • Indonesian migrant workers who work abroad earn, on average, four to six times more than in Indonesia.
  • Acquire skills and experience that will help them find better jobs on their return.
  • Poverty reduction; remittances from Indonesian migrant workers make an important contribution to poverty reduction. Research shows that remittances reduce the probability of Indonesian households being poor by 28 percent.
  • Lasting benefits; remittances also contribute to improving longer-term livelihoods for migrant workers and their families. For example, many migrant households channel their income from remittances into education, 15 percent invest that income into business capital, and more than 20 percent report putting the money into savings accounts.

Read the full World Bank report