By
Brigida Soares
Nasional Advisor for
Secretary of State for Professional Training and
Employment Policy (SEPFOPE)
Email: zidasoares@ymail.com
Abstrak
Remittance is amount
of money which sent by overseas workers to their family at origin country. This
type of income is significant in generate a number of important positive contribution
to the economic development of many household whose mostly lives in rural areas.
Viewed from the macroeconomic
perspective, remittances also influences the increase of national income of
individuals in each family who are getting the chance for the overseas
employment and tend to reduce poverty and inequality in recepient countries, as
well as increase aggregate investment and growth. At microeconomic stand point, the family who’s regularly earn income
from remittances; can improve their economy condition such as increase the
daily consumption for food and the basic needs. Futhermore, this income also
used to increase saving, spend more on the education, improve children's health
and estabelsihed a small or medium-sized of businesses in the community. The data
from BNU (Banco Nacional Ultramarino) revealed that every year, workers in
South Korea sending money to family with the total amount of US$ 1,746,250.22 (BNU, 2013). Meanwhle, the data from Western Union Agency recorded remittances every three months with
the total amount ofUS$ 1,200,538.30.
Total remittances recorded by SEPFOPE in 2013
reachedUS$ 2,946,838.53.
Introduction
Timor
Leste as a newly independent state in the era of milleneum, as a new country it
is true that there are variety of challenges facing in the process of economic
development. With the rapid rate of population growth about 3.3% each year, many
of Timorese are still living under poverty line (World Bank, 2008; WFP, 2010). Beside the above condition, Timor
Leste is rich with natural resources such as oil and gas. However, rely on
natural resources will not guarantee the sustainability of the economic
development for the future. Related to a sustainable development, the government
has adopted some important policies in recent years through the
implementationof varies programs in the sectors of agriculture, fisheries and tourism.
The aims of these policies are to substitute the dependency on oil and gas
sector. These productive sectors which mentioned above are related to the
world's labour market. In the era of globalization, the demand of the workforce
is increasing every year especially in developed countries. This is one of the
indicators for youth in less developed countries to seek for overseas
employment with the expectation to gained more skills and earned more income.
Although it's considered as "low wages" for people in developed
countries, the amount of money earned is very valuable for people in poor
countries in order to improve the economy of their household.
Policy of the
Government of Timor-Leste
The
Timor Leste Government policy, through the Secretary of State for Professional
Training and Employment Policy (SEPFOPE) is to reduce unemployment, improve the
quality and skills of human resources, creating conducive working conditions
for the workers through employment protection, and elaborate the"Labor
Code" in accordance with the international provisions. Associated with the
demand of the labor market opportunities in developed countries, the Government
of Timor -Leste use this opportunity to reduce the rate of unemployment which has
reached 3.6 % (SEPFOPE, 2010). To
achieving this goal, the government has been implementing some programs in the
area ofVocationalTraining at existing training centers and the implementation
of Overseas Employment Program. This program will have two positive impacts,
the fisrt is to increase the number of human resource which equiped with varies
ability and ready to enter the labour market. The second is to fullfill the
overseas employment program, this program will gives an opportunity to the
youth to work overseas and support the family’s economy.
Overseas Employment
Program
Overseas
employment is one of the programs under the responsibility of the National Employment
Department (DNE). Implementation of this program is based on the agreement with
the countries that want to receive workers from Timor Leste. During this period,
the Government of Timor -Leste has signed agreements with the Government of
South Korea and Australia. In the agreement those countries agreed on some
important issues, one of the agreement is the period of contract for the
workers, The South Korean Government provides an employment opportunity for the
period of one to three years, if the workershas estabelishedgood performance
and behaviour, the contract will be extended for another two years; over five
years if the workers still maintain positive performance and behaviour, the
South Korean Government will provide the Special Visa namely E7 which give
an opportunity for workers for the freely movement in South Korea as well as
the right to choose on a company which they want to work for. On the other hand,
the Australian Government opened a program called 'seasonal workers' contracts
that provide opportunities to the workers from Timor Leste with the provisions
of the working period for three to six months in each year. The type of the
contract with a short period is one of Australia's policies to restrict foreigners
to stay longer in Australia.
Overseas Employment has been
implemented by the government since 2008:
in the first phase, the Government of Timor-Leste through SEPFOPE sent 50 workers to South Korea. In 2011 the South Korean Government was asking
for 2,500 workers, but Timor Leste
was only offering 400 workers; in 2012, South Korea raised the number of
employees reached to 2750 people,
Timor Leste once again releasing only 500
workers. In 2013 the South Korean
government demanded workers jumped up to 3,500
people, but the number which derived from the Government of Timor-Leste only
reach to 280 workers. Judging from
the small number that sent by the Government of Timor Leste, South Korea also
reduce the number of employees to 1,750.
In 2014 the number of bids not receive yet an answer from the Government of
Timor-Leste on how many number of workers will be delivered.Total number of workers
which sent by the Government of Timor-Leste was not in accordance with the
amount requested by South Korea in 2011 until 2013, which should reach 7,570 workers, it can be concluded that
the Government of Timor-Leste has wasted opportunity in improving human
resources while reducing the income of remittance that should be received by
Timor Leste in large numbers. Based on the information from the relevant
department which responsible for the program said, "SEPFOPE has its own criterias that should be met by prospective workers
to South Korea such as attending Korean language course in a few months: in
fact, many workers did not pass the final exam" (Alves.P 2014). This
statement can be concluded that the
approach of the Government policy through SEPFOPE should be improved, and it’s
necessary to overcome challenges as fallowed:
1. Limitations of
training centers which only localizing in a few districts.
2. Dissemination of
information on overseas employment to the rural areas is not evenly
distributed.
3. Korean language
training techniques do not work well because the candidates do not attend to
the fullest.
4. Mechanisms of teaching
from Korean teachers are not effective due to the limited recognition of local languages.
5. The allocation of
funds from the Timor-Leste Government for Korean language training is not
included in the category of priority to the Human Resources Development Funds
in each year.
If
these constraints be addressed and corrected the results of this training for the
candidates will offer a large number of workers in accordance with the request
submitted by the South Korean Government.
Workers in South Korea
and Australia
The
number of workers currently working in South Korea reached 1,358 people. Data from the National Employment Department which
administers overseas employment can be seen in the following figure :
Through this figure, it can be
analyzed that the workers employed in the fisheries sector achieve the highest
number compared to the number of workers in the agricultural sector and
factories. This shows that the fisheries sector is a priority for the labor
market in South Korea. Based on the facts, SEPFOPE need to focus in creaating
good estrategis on training techniques in the fisheries sector and maksimised
coordination with relevant ministries such as the Ministry of Agriculture and
Fisheries. The goal of coordination is to prioritisedthe investment in the
fisheries sector in Timor-Leste. Another point is to prepare labour market of
this sectors in order touse the lebour withskills, knowledge and experience
when the contract with South Korean Government is end.Compared to the number of
workers employed in South Korea, the number of workers employed in Australia is
very small and only apply to the two sectors such as hospitality and
agriculture. The total number of Timorese workers in Australia can be seen in
the following graph :
From this graph shows that, Australian
labor market is in need of people who have skills in the hospitality sector.
The number on the chart above becomes an indicator for the Government of
Timor-Leste to more focus on technical training in the hospitality sector. To
support this, one of the training to focus is the English Language Training, this
training as a way to respond to the selection with more competitive bycompanies
in Australia which seeks for more workers from Timor Leste. Another point is that
the Improvement of the skills of human resources in the hospitality sector is
very useful because in the coming years Timor Leste can become a tourist destination
for neighboring countries such as Australia and New Zealand.
Remittance from the Workers
When disccused about the number of
overseas workers, it’s closely tied to the income earned by workers every month.
Income earned on a monthly basis mostly sent to families living in Timor Leste.
Based on the data obtained from the BNU
Bank (Banco Nacional Ultramarino),
each year the total money sent by workers in South Korea to their families in
Timor Leste totaled US$ 1,746,250.22.
Data from Western Union Agency
indicates the progress of income for the quarterly remittances was US$ 1,200,538.30. If counted the whole
amountof income from overseas employment program has received a remittance of US$ 2, 946,838.53. The data is considered
incomplete because some finacial institutions operating in Timor Leste as Mandiri Bank, ANZ and small agencies
that deal with the money transference services has not report yet the
information of remittances through their service.
The total income earned by the
workers overseas is very significant. Workers and their money is theimportant elements
to supportthe improvement of family economy at the country origin. Nevertheless
a few percent of the money had to be cutted for the operational cost as a fees
on transferes services which apply in all the financial institutions which work
in this sector.. For example, Western Union, if it received a total transfer of
US$ 1000.00, operating rates for tax
can reach 10% of the amount of money
sent. The system does not provide a profit to the workers remitters receivers because
the money sent to the family must be cut with a high percentage of tax
payments.
To
respond to the high operational cost by the financial institution or business
which focuses in this sector, the Government of Timor-Leste needs to implement
some of the policies as follows:
1. Reduce taxes on money
that is transferred by the workers.
2. The government of Timor
Leste working closely with companies that provide contract to workers, to
immediately create a permanent form of deposits in accordance with the duration
given by the Bank.
3. Forming a National
Bank that provides operational with a small tax percentage of the price to the
workers who work abroad and give high interest money that helped workers to
deposit their money for their overseas employment contracts.
This
idea is reasonable when viewed from the paradigm of macro-economic stand; this system is effective to improve the
economy in the country from the income which regularly sends to to existing
bank. Furthermore, the Nasional Bank can implement the "saving &
loan" system to people that requires capital for their businesses. If
workers (owners of money) have completed their contracts and intend to return
to Timor Leste, they can take all the money in the refer bank.
The national income of every family
is one of the indicators to measure the growth of economic of its citizens. Through
the national income, experts can evaluate the progress of economic development.
. Looking on the positive contributions, in the 2014 State Budget Debate, SEPFOPE
pick the issue in the plenary and addressed by parliamentarian from the
opposition party, Nina Rangel dos Reis who questioned the national income that
does not count the remittances. Vice Finance Minister, Santina Cardoso
acknowledges this weakness when answering the question of annual remittances as
income for the State.SEPFOPE Plans to
conduct in depth analysis about impacts of the overseas workers’ remittances on
the state economic development, SEPFOPE admits that over the years there
has been no thorough analysis of overseas income which sends by Timorese
workers. Looking at these shortcomings, in 2014 SEPFOPE had planned to provide
funding support to conduct useful analysis in depth on the issue of remittance
to Timor Leste. Support will be given to Timorese students who are conducting
studies on master's degree in the field of development in New Zealand. The
thesis entitled "Overseas Activities that contribute to the
Economic development of Timor Leste: an analysis of remittance of overseas
Timorese workers." Through this article, we can see a thorough
analysis of the overseas employment program policy and resulting benefits for
long-term economic development.
Many
people talk about government ineffectivity in addressing the problems of
unemployment faced by the State at this time. Some said that the government
does not give attention to the necessities of the overseas workers. It is true
that there are many reasons that support the ideas presented above and SEPFOPEacknowledges
the advantages and disadvantages of the program implemented. Disadvantages of
this program are visible such as sending workers abroad means that the country
loses more skills labor or workers. However in the reality, this program has
its advantages to reduce the rate of unemployment in the country, moreover the workers
gain new skills, knowledge and more importantly gain income and sent back to
their family in Timor Leste.
Conclusion
The remittances obtained by Timorese
overseas workers very positively contribute to the economic development of the
family who mostly lives in rural areas. The total numbers of workers with 1,389 people working in South Korea and
Australia have produced a remittance of US$
2,946,838.53 each year for the local economy. However in some point, the Government
of Timor -Leste failed to respond to the number of workers requested by South
Korea and Australia. Looking at this reality, the government needs to improve
the overseas programs working systems, and the efforts of the new policy should
be done in order to support workers income bydeposit their money into the
National Bank at the country origin which might raise high interest of the money
and give them an advantage when the contract period is completed. SEPFOPE needs
to undertake training through overseas employment program with the clear
mission where workers can learn and has good work experience and when they get
the chance for the overseas employment; those experiences that they get might change
their mentality to be more professional in the area they chose. SEPFOPE
policy by implementing overseas employment program have a positive impact such
as enhance skills and good experience and included moreincome in order to
improve the economy of the family and provide significant income for the State.
***
References
Alves, P. (2014)"
Director fo Nasional Employment Department" SEPFOPE, Dili, Timor-Leste
BNU (Banco Nacional
Ultramarino), 2013: "Specific data of income transference from workers in South" Dili, Timor-Leste.
National Employment
Department (DNE), 2013: "2013 Annual Report of National Employment Department, Overseas
Employment Program: Dili, Timor Leste.
SEPFOPE (2013): "Work
Guidelines of Secretariat of State for Professional Training and Employment Policy” Dili, Timor Leste.
World Bank (2013),
Qouted from World Food Programe: "Fighting hunger worldwide" Dili, Timor-Leste.
Western Union - Timor
Leste (December 2013):"Specific data of income transference from workers in South" Dili, Timor Leste.
