Tuesday, November 07, 2006

Youth unemployment to get worse over next decade

National News - November 01, 2006
Ridwan Max Sijabat, The Jakarta Post, Jakarta

Social scientists warned Tuesday that Indonesia's social problems will get worse over the next 10 years because the bulk of the 11 million unemployed will be aged between 15 and 24 years old.

They said such a situation could spur political instability in line with widespread poverty and other social ills.

Payaman Simanjuntak, a professor of labor economics at the Krisnadwipayana University in Jakarta, said that a recent survey conducted by the National Labor Training Board showed that 64 percent, or almost seven million, of the 11 million unemployed in Indonesia were high school graduates or dropouts aged between 15 and 24.

"These young and poor people mainly work in the informal sector because they do not have the skills needed for the formal sector. They will mature and get married in the next decade. They will remain poor and be unable to afford to send their children to school," he told the Jakarta Post.

The International Labor Organization reported Monday that globally the number of jobless people aged between 15 and 24 has risen sharply and warned that the low rate of global economic growth was failing the young.

Payaman predicted that Indonesia's unemployment rate could increase to 20 percent of its roughly 150 million person workforce by 2015, while the number of poor families, currently estimated at 19.2 million, could double.

"There will be no significant changes in the country's human development index and foreign professionals will grab the domestic labor market."

Payaman, formerly the director general for industrial relations at the Manpower and Transmigration Ministry, criticized the government for only focusing on formal education programs.

"Formal education will only reduce the number of elementary school dropouts and produce incompetent, unskilled high school graduates, and we will have no alternative but to focus on exporting maids and semiskilled workers," he said.

Bomer Pasaribu of the Bogor Institute of Agriculture (IPB) said open unemployment and underemployment accounted for 40 percent of the current 106 million working people in Indonesia.

"Besides allocating part of the education budget to finance training programs, the government should feed the people and cure the sick," he said.

He said the government needed to focus on intensifying soft loans for small- and middle-scale enterprises and revitalizing the agricultural and forestry sectors to absorb unskilled job seekers.

Both men were of the opinion that Indonesia's main problems were its double-digit unemployment rate, worsening poverty, poor human resources quality, low productivity and low-performing government officials.

Bomer, a former manpower minister, is also executive director of the Center for Labor Development Studies (CLDS). He said a foreign investment program would not help solve the unemployment problem in the short term. He cited a recent CLDS survey that found that corruption was the largest cause of unemployment, at 21 percent. Bad infrastructure was to blame for 19 percent of unemployment and a complicated bureaucracy for 15 percent, with tax rulings (11 percent), poor human resources quality (9 percent) and labor regulations (4 percent) rounding out the list.

Quoting the 2005 World Bank Report, he said that Indonesia was ranked 115 out of 155 countries for foreign investment, while neighbor Singapore was ranked second.


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