By
Abdullah A. Rafsanjani
Africa-Press – Kenya. The world is currently hit by a phenomenon, namely a wave of layoffs that not only sweep developing countries but also developed countries such as the United States. Starting from the efficiency of companies or agencies to economic fluctuations that eventually lead to the resurgence of protectionism, changes in diplomacy strategies and adjustments to domestic pressures.
The United States by July 2025 has terminated more than 1,300 of its State Department employees. This step was taken to cut 15% of domestic staff and reduce employees in various agencies for efficiency as was done during the dissolution of USAID. The cuts made by the United States reflect the shift in government priorities which after being led by Donald Trump with America First makes the United States more important domestically, one of which is also the policy of high tariffs for commercial goods entering the United States.
In China, there is an employment crisis among young people, even though China is now in a glorious economy. The youth unemployment rate had reached 21% but this number was doubted by independent studies due to the existence of fake offices, i.e. work entities established to cover unemployment statistics. The move shows a different form of protectionism, the government maintaining social stability by hiding structural problems rather than carrying out economic reforms or opening up the employment sector to foreign investment or international collaboration. China’s approach shows the country’s tendency to isolate domestic problems from global pressures.
Turning to Japan which is facing a different pressure, namely the population crisis. Japan’s young labor force population has declined drastically while the proportion of the older labor force has increased dramatically, forcing Japan to open its doors to foreign workers. As of October 2024, the number of foreign workers in Japan reached 2.3 million people, an increase of 12.4% compared to the previous year. Therefore, Japan encourages programs to grant long-term work permits to skilled workers such as Specified Skilled Worker. But this openness remains with certain limits, since only workers with certain skills are accepted and this shows soft protectionism. Japan wants to fill the gap in its workforce without sacrificing its socio-cultural integrity.
And now in Indonesia, there are many layoffs, especially in the manufacturing and startup sectors. Data from the Indonesian Ministry of Manpower as of May 2025 recorded 26,455 cases of layoffs, and this is because local companies are losing competition with foreign products, especially China. This triggered the urge for the Indonesian government to better protect the domestic industry. In this position, Indonesia is faced with a dilemma between protecting its domestic market or remaining globally economically integrated because Indonesia is dependent on foreign investment and its export pairs so that it is not encouraged to carry out protectionism.
This global phenomenon shows that countries are starting to prioritize domestic stability over global openness, which means the world is heading towards an era of caution over connectivity. Economic diplomacy is not just about opening access and establishing partnerships, but must be able to manage the protection of national interests without completely closing itself off from the outside world.
What is happening now is a symptom of a crisis, namely a crisis of confidence in the global economic system and a crisis of domestic capacity in the face of external pressures. Countries have their own responses and ways, but they all lead to one thing, namely domestic protection and external selectivity. This can be a lesson for developing countries because in the current era it is not about who is the most open, but who can withstand the storms both at home and abroad.
moderndiplomacy
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