Indonesia must improve the quality of its local human resources so that
more unemployed people can find jobs amid robust economic growth, a senior
official says.
Deputy Finance Minister Mahendra
Siregar told reporters yesterday that the poor quality of the local workforce
meant that people were unable to find jobs in the growing industrial sector.
A report from the Central
Statistics Agency (BPS) published this month said that unemployment dropped by
only 460,000 in August on a year-on-year basis, despite growth of at least 6
per cent recorded in the same period.
Labour absorption to date has
been far lower than government estimates, which have assumed that every 1 per
cent of economic growth can create 450,000 jobs.
Gadjah Mada University economist
Tony Prasetiantono said that the disparity between government assumptions and
realised growth could be attributed to the central government's failure to
develop labour-intensive sectors properly.
According to Prasetiantono,
growth has been mostly driven by sectors that were not labor intensive and also
required high-quality human resources. Examples of those sectors are the
financial services, telecommunications and aviation sectors.
Data from the BPS showed that
most of the workers in Indonesia were poorly educated.
Around 53 million workers in
Indonesia, or 48.63 per cent of the workforce, have only finished elementary
school. Only 10 million workers in Indonesia have a diploma or bachelor's
degree. Most workers continue to work in agriculture.
However, although the
agricultural sector absorbs most of the nation's workers, its growth has been
relatively mild compared to the financial and service sectors, which require
workers who are better educated and technologically oriented.
Based on BPS data, the
agriculture and industrial sectors contributed 4.80 per cent and 5.86 per cent
to 6.29 per cent growth in the first three semesters of 2012, while the
financial and the telecommunications sectors contributed 7.41 per cent and
10.48 per cent, respectively.
"The government should have
been able to push for more development within the manufacturing sector and open
new agricultural areas, like in Papua," Prasetiantono said.
In addition, Prasetiantono said
the government should start accelerating infrastructure development by
launching new projects. "Infrastructure projects are usually
labor-intensive as well," he said.
Separately, Aviliani, an
economist from the Institute for Development of Economics and Finance, said
that structure development had to be accelerated by the government within the
next two years.
"As of 2014, the government
is planning to implement numerous export bans to boost industrialisation in the
country. Industrialisation will surely absorb more manpower and create new
jobs, but it will not happen if we fail to properly develop our infrastructure
to lure investors to invest here," she said.
"We can only achieve the
quality growth that we have been dreaming of by properly developing
infrastructure, which will create massive multiplier effects in society,"
she added.
Hans David
Tampubolon
Business & Investment Opportunities
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