It is surprising however that President Joko Widodo made a move towards greater liberalisation given public attitudes towards foreign workers. The Jakarta Post criticised the government for not first informing the public of the intention and content of the proposed legislation. Foreign participation in a country’s labour market is almost always susceptible to nationalist backlash, especially in Indonesia.

Former president Susilo Bambang Yudhoyono and would-be president Prabowo Subianto both reacted strongly to the regulation in subsequent months — the former imploring Jokowi to stop the ‘attacks’ on Indonesia workers, the latter warning against opening Indonesia’s doors to foreign workers and suggesting that Jokowi should learn from Donald Trump’s border wall idea. Others voiced opposition as well. A repeal of PP20 was a key demand of the somewhat militant Indonesian Trade Union Confederation flanking Prabowo during its May Day demonstration this year.

So what exactly has Jokowi done and why?

The new regulation is hardly radical, mostly changing administrative and bureaucratic clauses. The main aim is to speed up the considerable time that it currently takes to process foreign worker applications made by Indonesian firms. PP20 calls for a shorter turnaround time (two days) for processing applications in technical departments, allows for processing of visa applications for potential foreign workers at overseas Indonesian embassies (until now they have been referred to Jakarta) and turns over more decision-making authority to the Ministry of Manpower, away from the all-powerful Immigration Department.

None of the more constraining restrictions — Indonesian language requirements, bans for employment in areas such as human resource management, short contracts or the requirement that foreign staff work with local co-workers — have been changed significantly. Indonesia still has a relatively restrictive policy towards foreign talent for technological and professional development. In Southeast Asia, Indonesia is more like the Philippines than Malaysia or Thailand.

It seems that the new law was a calculated political move and exemplifies something of the reforming spirit in Indonesian public policy under Jokowi. Indonesia needs skilled foreign experts on two fronts for its economic development. First, foreign manpower is needed to help develop a range of digital-related activities that underpin industrial and service-sector development. This includes promoting technological change in areas under the general rubric of ‘Industry 4.0’. Jokowi and his government have bought into this idea, outlining a roadmap for action in selected industries in April 2018.

Second, skilled manpower is needed to support Chinese investment and the Belt and Road Initiative (BRI). Indonesia with its large infrastructure deficit stands to gain substantially from these investments in the next decade — some estimate that investment figures may reach US$100 billion. But success is likely to depend on the employment of foreign experts as engineers and technicians — some of them Chinese and some from other countries — to complement the skills of local professionals.

The BRI factor adds to the already-sensitive issue of foreign Chinese worker participation in mining and infrastructure projects in Indonesia. This gained prominence during the Jakarta election campaign of 2016–17, owing to wild rumours of illegal Chinese labour migration. It is to this that both Yudhoyono and Prabowo were alluding in their recent provocative speeches.

In reality, as both Yudhoyono and Prabowo must surely know, the number of registered Chinese overseas workers is still very small relative to the size of the skilled labour market in Indonesia. It was only around 20,000 in 2016 (though it is possibly closer to double that number now, especially if illegal migrants are included). But it is true that friction has grown, with many Chinese taking Indonesian jobs for which skills are in abundant supply, mostly in isolated regions of the country.

Given these labour market realities, the reform of foreign worker regulations can certainly be judged a step forward. Ensuring a more efficient transfer of approved foreign workers must be counted as a plus. But the political stir makes it unlikely that further substantive reform will emerge before the 2019 elections. This is a great shame. An 18-month postponement in reform will only delay Indonesia’s efforts to adjust to the new demands of the internet age.

Chris Manning is Honorary Associate Professor with the Indonesia Project, The Australian National University.