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

Changing Under Pressure, IS ‘Potent’ as Ever

US intel officials describe Ramadi's fall as concerning, but say it isn't emblematic of larger effort to degrade IS capabilities More

Nigeria Fuel Shortage Shows Fragility of Africa’s Oil Giant

Although it is the largest oil producer in Africa, country has nearly ran out of fuel it needs to power its generators, cars and airplanes over the past week More

Arrested Football Officials Come Mainly From the Americas

US Justice Department alleges defendants participated in 24-year scheme to enrich themselves through corruption of international soccer More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
3D Printer Makes Replica of Iconic Sports Cari
|| 0:00:00
...    
🔇
X
George Putic
May 27, 2015 9:31 PM
Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.

VOA Blogs