Investment should go hand-in-hand with job creation. In most government policy arsenals, investment is a key tool designed to foster employment of its citizens as taxpayers.

However, the recent policy adopted by the administration of President Joko “Jokowi” Widodo to allow a potentially large number of Chinese workers under the foreign direct investment (FDI) package, which implements a memorandum of understanding (MoU) signed between Indonesia and China in the last APEC summit in Beijing in November 2014, will have the opposite impact and create a negative effect on our economy.

It seems about 1,700 Chinese laborers and 700 engineers have been working on a number of construction sites, while 26,000 Indonesian workers have recently been dismissed because of the economic downturn. This could be just the tip of the iceberg.

The implications of inviting Chinese migrant workers, who take relatively low-skilled jobs, creates a contradiction, regardless of whether the foreign workers only come to fill temporary shortages of skilled workers or replace the local workforce semi-permanently.

Against this backdrop trade unions recently took to the streets in around 20 regencies, protesting the pro-foreign migrant workers policy. Unions say this policy is at the expense of Indonesian workers and our economy.

Since the Jokowi administration took office, unemployment has declined to 5.9 percent. However, some 7.2 million workers out of a workforce of 121.8 million by the end of 2014 were still unemployed — not to mention the under-employed.

Sustaining economic growth through investment and development is indeed a key policy to create jobs for the unemployed and the large number of school leavers who enter the labor market each year.

The government has attempted to boost economic growth through infrastructure development projects as this would help create jobs and expand the economy through generating more disposable income and a higher tax base.

The driving issue, apparently, is the administration’s pragmatic approach of making sure that the infrastructure projects are finished as quickly as possible.

Any infrastructure project requires quite a time lag from planning to finish. Attracting FDI with high flexibility, including bringing all workers and skilled workers as “one package”, seems a “good” option to ensure the delivery of the project, at any cost, will be on time.

This is the “selling point” of the administration that can claim the successful delivery of projects in the next election campaign to secure a second term. Furthermore, dealing with work permits for migrant workers is likely to be a lucrative “business” that could be another trigger for the use of migrant laborers.

Yet the practicality of completing projects quickly by allowing the Chinese to use their own workforce does little to help a faltering labor market and economy. Certainly, implementing the one FDI package policy will make it much harder for Jokowi to deliver on his promise to create 10 million new jobs and improve people’s welfare.

On the contrary, the decision to allow Chinese workers without proper labor market testing or at least an objective basis, is made without solid grounds and could well result in both negative economic performance as well as potential social turbulence.

It is crucial to filter the investment by setting conditions, in particular to ensure that local workers are protected or at least given an opportunity to compete for jobs. This is not racism, but makes good economic sense in our own national interest.

An effective policy should be grounded in logic, underlined by scarcity and opportunity cost. The “go-ahead” decision for a “complete menu” for the FDI including not only funding, but also professionals and unskilled workers, is not connected to any rational argument.

It is difficult to propose that a large number of migrant laborers and experts are required to replace low-educated and experienced workers in the labor market, when the government simply has not done the work to test if that is necessary.

It looks like a straightforward concession in the face of Chinese demands and these are demands being made by the Chinese across Asia as they conclude bilateral trade deals.

In Australia this issue is currently huge as their unions and Labor Party oppose labor flexibility clauses in the China Australia Free Trade Agreement (CHAFTA) negotiated by the conservative government — allowing the Chinese to bring in their own labor on any project of more than A$150 million.

Recruiting local laborers who are plentiful and complying with minimum wages by recruiting agencies, would be more competitive, cheaper and would lead to fewer “headaches” given fewer additional burdens, such as accommodation costs and fewer potential social problems.

This does not mean projects shouldn’t be able to recruit skilled workers or experts, but only if labor market testing shows that those skills are unavailable currently and are likely to be difficult to create without disproportionate cost to the employers and government.

Foreign companies would more often prefer to hire laborers locally, if the supply is available, although there is some risk of delay caused by the learning curve for new local recruits that may require vocational training centers and technical skills being taught in schools.

With an estimated 7.2 million of the working- age population unemployed, including 400,000 university graduates and 120,000 engineers, there are clearly plenty of potential skilled workers to meet industrial and project demands, including with a more reasonable agreed wage level.

While low-skilled workers are abundant, getting information on semi-skilled and skilled workers to make it easier for them to access the labor market is not always an easy task.

If the number of infrastructure and industry development projects as part of the master plan for acceleration and expansion of economic development (MP3EI) needs to utilize foreign workers, it would demonstrate that we have real problems in translating the master plan into shorter strategic plans and program interventions — including ensuring that we have our own skilled workforce to implement these projects. This should include linking the project with budget and human resources development plans.

This requires improving capacity of vocational training centers (BLK-Balai Latihan Kerja) and employment services to closely monitor skilled and trained workers and the demand of industry and strengthening their “signature menu” of “training, certification and placement” through better coordination with relevant offices of planning, manpower, industry and technology as well as private-public partnership.

It is crucial to filter the investment by setting conditions, in particular to ensure that local workers are protected or at least given an opportunity to compete for jobs. This is not racism, but makes good economic sense in our own national interest.