Manpower Minister: 'We must tackle root problems to stop unemployment boom'
The Jakarta Post
Opinion and Editorial - September 25, 2006
After almost two years in power, President Susilo Bambang Yudhoyono and his government have made little progress in their attempts to provide more jobs. Manpower and Transmigration Minister Erman Suparno outlined the problems and challenges the government faces in addressing unemployment in an interview with The Jakarta Post's Ridwan Max Sijabat.
Question: What is the unemployment situation in Indonesia now?
Answer: The unemployment rate has reached an alarming level since it has risen to double digits. Despite its fluctuating drops, the unemployment rate has remained high. According to National Statistics Bureau data, as of June 30, 2006, the unemployment rate stood at 10.6 percent, or 11.6 million of the 106 million-person workforce, a 2 percent increase on the 9.5 million of the end of 2005. Under-unemployment, or those working less than 35 hours a week, has exceeded 43 million.
The economic growth of almost 6 percent in 2005 could cover only the annual growth of 2.3 million new job seekers. The unemployment situation has been worsened by the an additional 5 million people becoming poor, raising the number of poor in Indonesia to 37 million in August this year.
Indonesia could be facing an unemployment boom along with all the possible social impacts in the coming years, unless its root problems are addressed and economic development is accelerated.
Could you the identify the social problems caused by unemployment?
The unemployment problem has caused a flow of job seekers from rural areas to urban ones. Urbanization has created slum areas in Jakarta, Surabaya, Semarang and many other big cities, while rural areas are getting poorer. The crime rate in urban areas has increased rapidly. A large part of the jobless has joined massive rallies and protests for survival and another part joined hard-line groups which have resorted to violence in the name of religion.
What is the root problem of unemployment?
Untrained human resources is the root cause. According to a recent international survey on quality of human resources, Indonesia ranked 59th among 60 developing countries surveyed, just below Vietnam. Of the 106 million-strong work force, 18 percent have never attended school, 36 percent are elementary school graduates and dropouts, 20 percent are junior high school graduates, 21 percent are senior high school graduates and less than 6 percent are academy and university graduates.
The industries have offered numerous job opportunities but they cannot be filled because of the absence people or lack of competence.
The low quality of human resources has a lot to do with the poor education situation. The education program is not linked with the labor market.
Why is this so?
I have raised this issue in several Cabinet meetings and with the coordinating minister for people's welfare, but until now, no initiatives have been taken to build better coordination with the education ministry to address the issue. Sector and departmental egoism is still strong.
Unemployment is a national issue and needs a national movement and strong coordination to address it. The education revitalization program will not achieve significant progress if all stakeholders do not play their roles and there is no link and match between national education and the labor market.
What have you been doing to cope with unemployment?
I have decided to intensify the labor export and transmigration programs with the main target of reducing unemployment by 5.7 million by 2009.
We are still reforming labor export procedures to increase labor exports to between 700,000 and one million annually in the coming three years from the current 400,000. We are intensifying the transmigration program in an effort to resettle annually 80,000 to 100,000 poor families from urban areas, up from the current 40,000.
The two programs are being promoted in urban areas, targeting high school graduates and poor families. The resettlement program will be centered on thousands of uninhabited islands across the archipelago.
We have rehabilitated all 162 labor training centers to train high school graduates before being sent abroad and we have developed an online system with all regions to improve coordination and exchange of information to support the two programs.
On top of that, the government will continue restoring the business climate to attract more foreign investors, which will result in more job opportunities. The President has issued Presidential Instruction No. 3/2006 to review a series of regulations to repair the investment situation.
What are you doing to make the two programs more attractive to job seekers?
The main key lies in strong coordination with all regions to promote the two programs. The main objective is to raise job seekers' awareness of the programs.
Poor families and job seekers will be realistic and interested in the programs if they obtain accurate information. Regarding labor exports, all state-owned banks have been asked to provide soft loans to finance their trips for work overseas.
Besides, we will offer street children education at Islamic boarding schools or open schools for non-Muslims. They will receive money as much as they used to earn while studying. After graduating they will be given an opportunity to undergo training at our vocational skill training centers, before they choose whether to seek jobs overseas or join transmigration program.
Opinion and Editorial - September 25, 2006
After almost two years in power, President Susilo Bambang Yudhoyono and his government have made little progress in their attempts to provide more jobs. Manpower and Transmigration Minister Erman Suparno outlined the problems and challenges the government faces in addressing unemployment in an interview with The Jakarta Post's Ridwan Max Sijabat.
Question: What is the unemployment situation in Indonesia now?
Answer: The unemployment rate has reached an alarming level since it has risen to double digits. Despite its fluctuating drops, the unemployment rate has remained high. According to National Statistics Bureau data, as of June 30, 2006, the unemployment rate stood at 10.6 percent, or 11.6 million of the 106 million-person workforce, a 2 percent increase on the 9.5 million of the end of 2005. Under-unemployment, or those working less than 35 hours a week, has exceeded 43 million.
The economic growth of almost 6 percent in 2005 could cover only the annual growth of 2.3 million new job seekers. The unemployment situation has been worsened by the an additional 5 million people becoming poor, raising the number of poor in Indonesia to 37 million in August this year.
Indonesia could be facing an unemployment boom along with all the possible social impacts in the coming years, unless its root problems are addressed and economic development is accelerated.
Could you the identify the social problems caused by unemployment?
The unemployment problem has caused a flow of job seekers from rural areas to urban ones. Urbanization has created slum areas in Jakarta, Surabaya, Semarang and many other big cities, while rural areas are getting poorer. The crime rate in urban areas has increased rapidly. A large part of the jobless has joined massive rallies and protests for survival and another part joined hard-line groups which have resorted to violence in the name of religion.
What is the root problem of unemployment?
Untrained human resources is the root cause. According to a recent international survey on quality of human resources, Indonesia ranked 59th among 60 developing countries surveyed, just below Vietnam. Of the 106 million-strong work force, 18 percent have never attended school, 36 percent are elementary school graduates and dropouts, 20 percent are junior high school graduates, 21 percent are senior high school graduates and less than 6 percent are academy and university graduates.
The industries have offered numerous job opportunities but they cannot be filled because of the absence people or lack of competence.
The low quality of human resources has a lot to do with the poor education situation. The education program is not linked with the labor market.
Why is this so?
I have raised this issue in several Cabinet meetings and with the coordinating minister for people's welfare, but until now, no initiatives have been taken to build better coordination with the education ministry to address the issue. Sector and departmental egoism is still strong.
Unemployment is a national issue and needs a national movement and strong coordination to address it. The education revitalization program will not achieve significant progress if all stakeholders do not play their roles and there is no link and match between national education and the labor market.
What have you been doing to cope with unemployment?
I have decided to intensify the labor export and transmigration programs with the main target of reducing unemployment by 5.7 million by 2009.
We are still reforming labor export procedures to increase labor exports to between 700,000 and one million annually in the coming three years from the current 400,000. We are intensifying the transmigration program in an effort to resettle annually 80,000 to 100,000 poor families from urban areas, up from the current 40,000.
The two programs are being promoted in urban areas, targeting high school graduates and poor families. The resettlement program will be centered on thousands of uninhabited islands across the archipelago.
We have rehabilitated all 162 labor training centers to train high school graduates before being sent abroad and we have developed an online system with all regions to improve coordination and exchange of information to support the two programs.
On top of that, the government will continue restoring the business climate to attract more foreign investors, which will result in more job opportunities. The President has issued Presidential Instruction No. 3/2006 to review a series of regulations to repair the investment situation.
What are you doing to make the two programs more attractive to job seekers?
The main key lies in strong coordination with all regions to promote the two programs. The main objective is to raise job seekers' awareness of the programs.
Poor families and job seekers will be realistic and interested in the programs if they obtain accurate information. Regarding labor exports, all state-owned banks have been asked to provide soft loans to finance their trips for work overseas.
Besides, we will offer street children education at Islamic boarding schools or open schools for non-Muslims. They will receive money as much as they used to earn while studying. After graduating they will be given an opportunity to undergo training at our vocational skill training centers, before they choose whether to seek jobs overseas or join transmigration program.
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