The shape of the world a generation from now will be influenced far more by how we communicate the values of our society to others than by military or diplomatic superiority. William Fulbright, 1964

Tuesday, October 10, 2006



Manpower Minister Erman Suparno has been reported as saying 2.7 million Indonesians are working overseas. By year’s end that number is expected to reach three million.

They remit about $ 2.4 billion (Rp 22,300 trillion) a year – making labor exports a major part of the nation’s economy. How does the money get back – and where does it go? Duncan Graham reports from Malang in East Java, a major maid recruitment center:

“It takes at least three months to get an inexperienced village girl ready for deployment,” said licensed manpower contractor Karnaka. “One of the difficulties is their inadequate knowledge of the banking system and money, and how to use it effectively.

“Schools in Indonesia should be helping young people understand the basics of finance. They are vulnerable and easily ripped off by the unscrupulous. The system of education just isn’t good enough. This is the job of the schools, not the banks.”

With his wife Kristiana Purwaningsih, Karnaka runs PT Binamandiri Muliaraharja. The company currently sends about 50 young women to jobs in the Asia Pacific region every month.

There are about 60 licensed agents in East Java, and according to Karnaka “hundreds” of illegal operators.

The Tenaga Kerja Wanita (TKW) (women’s work force), being cheated of some of their earnings by corrupt transport operators and officials at Jakarta’s Soekarno-Hatta international airport has long been a concern. Rip-offs were rare at Surabaya’s Juanda international airport where controls were tighter, he said.

However many fail to achieve their dream of coming back with a sizeable sum to start a small business or build a new home because they can’t budget properly, are gullible and aren’t aware of the pitfalls.

Now Binamandiri Muliaraharja, in association with two major banks, runs a one-day financial workshop for potential TKW as part of their in-house training. Bank officers visit the training centre to help the women open an account and get an ATM card.

In what Karnaka said was a special deal for East Java TKW, one bank allows saving accounts to be opened with as little as Rp 10,000 (US $ 1) while the other requires a minimum balance of Rp 25,000 (US $2.50). Most banks usually require start-ups of around Rp 500,000 (US $50).

“In many cases this is the first time the maids have had any dealing with a bank,” Karnaka said. “There are few branches in the villages and markets. The idea of using a financial institution and saving money is rare.

“So people employ other ways to borrow, like loan sharks and bank titil.
This is an informal, traditional system where people get small sums from friends and neighbours and repay little-by-little, day-by-day.”

Trusting others in money matters can have awful consequences. Karnaka said he advised workers to send home only basic amounts for specific purposes, like school fees. The maid should keep most earnings.

One woman who ignored this advice and remitted all her salary to her husband committed suicide when she returned after two years overseas to find her spouse had lost Rp 60 million (US $6,500) on gambling.

Others have had their savings stolen by people they thought were honest friends and relatives. Earning comparatively large sums sometimes goes to the heads of TKW who go on a splurge of handphones and accessories when the money had been set aside for other purposes.

“The standard way of sending cash back to the family is through a relative or friend from the same Indonesian village, and who has finished her contract and is returning home,” he said.

“Of course this is fraught with hazards. Imagine the responsibility of someone carrying, for example, thousands of Hong Kong dollars for a neighbour. We tell them that he may be your father or husband but you shouldn’t always trust.

“Not everyone takes that advice. Others bring back their own money, and then transfer it into rupiah through moneychangers – not banks. They don’t always know the rate or compare with other dealers.

“It would be ideal if they could put their earnings into an account overseas but some countries won’t allow foreigners to do this.”

The formal banking system is also in for its cut, with Karnaka telling of a woman moving Rp 1.7 million (US $ 183) from Taiwan to Indonesia. She had Rp 300,000 (US $32) – or about 18 per cent - deducted for transfer fees, conversions, administration and wire service – and all fees were legal.

Binamandiri Muliaraharja has now opened an account in Hong Kong where maids can deposit their money. For a transaction fee of Rp 50,000 (US $ 5) and using the Internet the money can be accessed in Indonesia in rupiah and sent to a village post office where charges are not imposed.

An Asian Development Bank study released earlier this year claimed billions of dollars was bypassing the banks as overseas workers used informal remittance systems. The Philippines-based ADB urged a relaxation of regulations and lowering of fees to encourage workers to use banks.

By ignoring this trade the banks were also losing the chance to get new customers and sell other products, the study said.

Karnaka said Binamandiri Muliaraharja was started by his mother Tuti Sanarto in 1985 to empower village women and help those being exploited in the Middle East. It was transferred to her son last year.

Up to 750 young women live and study at the company’s five training centres in Malang. Here they learn Cantonese and Mandarin in a 30-booth language laboratory, master the arts of Chinese cooking and discover the complexities of Western toilets.

There’s even a mock Singapore flat where trainees can learn to wash high-rise apartment windows without tumbling to their death. The laundry is equipped with ancient bump-and-grind twin tub washing machines through to the latest beeping computer-controlled front-end loaders. Theoretically the TKW should be able to handle any gadget they might encounter once they leave the archipelago.

Cultural knowledge, like sweeping dust from the front of a Chinese house to the back so the money won’t escape, is also taught.

The placement fee is Rp 9 million (US $900), which is taken in instalments from the woman’s salary. Since starting business the company says it has sent 50,000 Indonesians to Hong Kong, Taiwan, Singapore, Malaysia and Brunei. It is now considering deploying workers to Australia which is suffering a labor shortage.

“Companies that send young women overseas to work must be responsible,” Karnaka said. “We can advise maids on how to handle their money, to never carry more than Rp 100,000 (US $11) and the best way to transfer funds internationally. But in the end it’s up to them what they do and many want to express themselves.

“One woman rejected the use of our bus to transfer her home from the airport and took a taxi to impress her village.

“But when she got out to buy souvenirs the driver vanished with her bag and Rp 30 million. Sadly she hadn’t taken a note of the cab number. And there went her reason for working overseas in the first place.”

(First published in The Jakarta Post 9 October 2006)


1 comment:

Indi said...

Shame on Indonesian men whose wives are sent abroad to earn a living while they enjoy the pleasure of second wives back home.