The Indonesian government targets 500 thousand new jobs for every one percent economic growth, compared to the Indonesian House of Representative’s target of 450 thousand. (IFT/MS FAHMI)
The Indonesian government expressed optimism that providing more job opportunities and controlling inflation will sustain people’s purchasing power.
The Indonesian government targets 500 thousand new jobs for every one percent economic growth, compared to the Indonesian House of Representative’s target of 450 thousand.
The government launched the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) program to, among others, provide more job opportunities, which consequently will sustain the people’s purchasing power, in addition to controlling inflation.
“We will draw in more investments to provide more jobs,” said Hatta Rajasa, the Coordinating Ministry for the Economy.
Juniman, an economic expert at PT Bank Internasional Indonesia Tbk (BNII), however, warns that Indonesia is still far from achieving high-quality economic growth as the country still relies primarily on the non-tradable sector, which does not provide a lot of job opportunities.
“Jobs in the informal sector have increased sharply in the last few years, but economic growth is not behind this,” Juniman said.
The real sector is not developing rapidly as the State Budget allocates most of its funds for routine spending such as salary payments for state employees. Allocating most of the government capital expenditure for infrastructures will drive the economic growth at 8-10 percent. The current budget structure will only present a 6 percent, or even lower growth
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