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Tackling youth unemployment through skills upgrade

posted Jan 26, 2017, 12:56 AM by Brook Ross   [ updated Jan 26, 2017, 1:02 AM ]

Abridged from Jakarta Post, May 31, 2016

Indonesia’s unrelenting youth unemployment requires new strategies in job creation, especially in the aftermath of massive layoffs across the archipelago earlier this year and the upcoming demographic bonus period. Between 2025 and 2035, it is predicted that the number of people within the productive age bracket will be higher than the number of elderly people and children.

About a fifth of the country’s young men and a third of young women aged 15 to 24 do not have a job nor go to school, the World Bank announced in 2010. Similar concerns were voiced by Gustav Papanek and other writers in their 2014 book The Economic Choices Facing the New President. With current growth rates, only 800,000 jobs in the formal sector will be created annually for the two million young people estimated to join the workforce every year.

In the past year, the government has made a concerted effort to boost employment rates in the manufacturing sector, which houses those industries with the highest capacity to absorb labor. Some of these efforts include the issuance of a new minimum wage policy that allows the private sector to better approximate their future business costs, along with other selective policy interventions in the economic packages issued since last September. Nevertheless, little has been done to enhance workers’ competencies outside of the general school system.

Skills upgrade is an area that should be addressed in greater detail by the government given the heightened competition in attracting investment in certain professional fields.

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