News / Asia

Indonesia Pushes Mining Industry to Boost Local Hiring

A worker stands beside an excavator digging for ore at Mobi Jaya Persada's nickel mining area at Dampala village in Marowali, central Sulawesi, Indonesia, Jan. 12, 2014.
A worker stands beside an excavator digging for ore at Mobi Jaya Persada's nickel mining area at Dampala village in Marowali, central Sulawesi, Indonesia, Jan. 12, 2014.
Mineral-rich Indonesia is trying to create more jobs in its huge mining sector. Jakarta wants more of the work of turning raw ore into finished metal to be done inside the country, so it is limiting exports of unprocessed ore. The idea is to encourage local construction of smelters and create jobs for Indonesians.

Indonesia is one of the world's largest producers of the ores that yield gold, nickel, copper and tin.  

Ships loaded with raw materials go to other nations for the complex process of refining or smelting.

The process uses heat and chemicals to free the metal from the surrounding rock, and get rid of impurities like oxygen or sulfur. Indonesia wants more of that work, and the jobs that go with it, to be kept at home.  

With that in mind, Jakarta first said it would ban exports of unprocessed ore, to encourage companies to build smelters in Indonesia and hire local people to run them. That policy has been modified to allow exceptions and more time.

Maria Toyoda, a professor at Villanova University in Philadelphia who researches Asian economies, said it is very difficult to predict what an export ban would do. “It is a real gamble for Indonesia”

She said the policy might work, but it also could have the opposite effect and hurt Indonesia by discouraging foreign investment.

Trade expert Gary Hufbauer of the Peterson Institute for International Economics said export bans or restrictions are used for many purposes by many nations, including the United States and India. He called it a “bad policy” that hurts trade, and a “sledgehammer” [excessively strong] tactic.

“If there were a good economic case for building these refineries [smelters] in Indonesia, it would have been done already,” he said.

Hufbauer said Indonesia would be more likely to create jobs by improving roads, ports and the electric grid, while cutting taxes and corruption.  

He once lived in Indonesia and said he thinks there would be more jobs if it was easier to fire people who don’t perform, or to lay off workers when demand falls.  

“Hiring somebody [under Indonesia’s rules] is almost like marrying that person,” said Hufbauer.

The managing director of Ellice Consulting in London, James Berkeley, said Indonesia’s policy changes could raise metal prices in the short term, and make metal markets more volatile in the long run.

“Prices will travel in a significantly higher and also lower range than they have in the past year,” he said.

Berkeley said the odds are no greater than “50-50” that the policy will bring new jobs.

You May Like

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More