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JAKARTA : Several years of healthy growth in Indonesia has not brought about better labour market outcomes.
The International Labour Organisation (ILO) made this assessment in its first ever report on Indonesia's Labour and Social Trends. The report also found that many Indonesians are simply not earning enough to escape poverty.
Indonesia - Southeast Asia's largest economy - has seen steady growth in the last couple of years, and the government is confident that the growth rate will soon return to the pre-crisis level of a decade ago. Poverty and unemployment too are on the decline.
But the ILO said the report showed there are other indicators that Jakarta needs to pay attention to while tackling the twin challenges of unemployment and poverty.
"Part of the reason we're sitting down and preparing this report is to assist policymakers in focusing on some of the issues to try to create better jobs, more jobs for Indonesians," said Alan Boulton, director of ILO Jakarta.
The report highlights how poverty remains largely a problem of the employed. One in two employed Indonesians are poor, and they are not earning enough to lift themselves and their families out of poverty. The report also said that half the unemployed are in fact educated.
Kee Beom Kim, an ILO economist, said: "Despite them being more educated, they do not possess the skills required by the labour market. It shows that there's a need to make sure the skills and education training is meeting the needs of the businesses."
The report also indicated that half of the unemployed are young people, although they represent only 21 per cent of the labour force.
The ILO report on Indonesia comes at a time when unemployment and poverty are two issues which will be turned into political commodities by parties contesting in the upcoming elections. This comprehensive report gives an indication of the magnitude of the problems awaiting the next government. - CNA /ls
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