Empowering Indonesia’s Global Workforce Amidst Global Labor Shortages

Indonesia is sitting on a goldmine of talent, with its working-age population (15–64 years) comprising approximately 191 million people or around 70% of the total population, according to the Badan Pusat Statistik (BPS) 2020. This demographic advantage presents a chance to accelerate economic growth if Indonesia can effectively tap into global labor markets. Empowering Indonesian migrant workers with the right skills and support can be a game-changer, especially as many developed countries grapple with an aging population and severe labor shortages. 

Countries like Japan and Germany are projected to face shortages of 7 million and 6.44 million workers by 2030, respectively, due to their aging populations. For Indonesia, this global demand for labor offers an exciting opportunity. However, the key to fully seizing this opportunity lies in strengthening the national workforce development system, which includes not only employment system but also education and training, information access, and protection mechanisms. This comprehensive approach will ensure that Indonesian migrant workers are continuously equipped with globally relevant skills, informations, and protection mechanisms, allowing them to remain key contributors to Indonesia’s economic advancement as “pahlawan devisa” or foreign exchange heroes.

Indonesian migrant workers, often referred to as foreign exchange heroes, are a crucial part of Indonesia’s economy. According to Bank Indonesia, remittances from migrant workers amounted to nearly $9.6 billion in 2022. This inflow significantly strengthens Indonesia’s foreign exchange reserves, helping stabilize the financial sector and bolster economic growth. According to the World Bank, remittances contributed 1.04% to Indonesia’s GDP in 2022, underscoring their substantial economic impact.

Despite their contributions, migrant workers still face challenges such as bureaucratic red tape, inadequate skills training, and limited access to reliable job information. Many struggle with certifications, while others risk exploitation due to weak protections. Indonesia must implement reforms to simplify bureaucracy, enhance skills programs, and strengthen worker protection and job placement systems. These changes will boost the competitiveness of the workforce and benefit both workers and the nation. 

To ensure that Indonesian migrant workers can thrive in the global job market, four key areas need to be addressed: education and training, bureaucratic simplification, access to reliable information, and labor diplomacy.

1. Enhancing Education and Training 

The global labor market increasingly demands workers with specified skilled workers (SSW). Indonesia must respond by preparing its workforce with programs tailored to meet this demand. This includes developing training programs that align with global needs, establishing training centers across the country, and providing internationally recognized certifications. The scope of training should go beyond job-specific skills, incorporating language proficiency and familiarity with the culture and legal systems of the countries where workers are deployed. By doing so, Indonesia can ensure its workers are well-prepared for success in foreign markets. 

2. Simplifying Bureaucratic Processes 

For many migrant workers, dealing with complex government bureaucracy is one of the most significant challenges. Simplifying these processes by creating one-stop service centers will allow workers to handle documentation, training, and certification requirements more efficiently. This would not only save time but also reduce stress, enabling more workers to access international job opportunities with ease.

3. Providing Access to Reliable Information

A key barrier that many aspiring migrant workers face is the lack of access to accurate and reliable information. Questions such as how to find reputable jobs abroad, what rights they have, and what training is required often remain unanswered. Developing a comprehensive online portal that provides this critical information would empower workers to make informed decisions. Additionally, such a platform could connect workers with overseas employers, making the job search process safer and more transparent.

4. Strengthening Labor Diplomacy

The protection of Indonesian workers abroad requires stronger labor diplomacy. The government must expand bilateral labor agreements with countries that employ Indonesian workers to guarantee fair treatment and safeguard their rights. Such agreements also help create more job opportunities for Indonesian workers.

The clock is ticking as countries like Japan and Germany struggle with labor shortages due to aging populations, while India and the Philippines are already stepping in to fill these gaps. With the demand for skilled labor rising rapidly, Indonesia must act now. To seize this moment, Indonesia needs targeted strategies that improve education, simplify bureaucracy, provide access to accurate information, and strengthen diplomatic protection—building a stronger global workforce.

Our migrant workers, the foreign exchange heroes, are already contributing significantly to the country’s economic development. Now is the time to act, ensuring that our workforce is not only skilled but also protected and ready to shine on the global stage.

With the right support, Indonesian workers will continue to thrive—bringing home not just money, but pride and economic prosperity for the entire nation.

This article is shorter and partial version of IBC’s “15 Rekomendasi Paket Kebijakan untuk Mendukung Agenda Pembangunan Presiden dan Wakil Presiden Indonesia 2024 – 2029”