CORE: Downstreaming Projects Must Align with Workforce Skills to Boost Local Employment

The skill requirements of downstreaming projects need to be synergised with the competencies produced by universities and training institutions.

Jakarta (ANTARA) - Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, has assessed that downstreaming projects need to be aligned with workforce skills so that the job opportunities created can be absorbed more by local workers.

He said the skill requirements of downstreaming projects need to be synergised with the competencies produced by universities and training institutions.

“The absorption of labour from downstreaming should actually be synergised between the skill requirements and the quality or skills produced by higher education and training institutions,” Faisal said when contacted by ANTARA in Jakarta on Tuesday.

According to him, skills alignment is important to reduce the gap between the competencies required by industry and the capabilities of the available workforce.

President Prabowo Subianto in February 2026 said the government is preparing 18 priority downstreaming projects with an investment value of Rp618 trillion, projected to create 276,000 quality jobs.

The projects cover various sectors, ranging from minerals and coal, agriculture, marine and fisheries, to energy transition and security.

On the investment side, the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) recorded national investment realisation of Rp1,010.6 trillion in the first half of 2026, absorbing 1,448,862 Indonesian workers.

Of the total investment realisation, downstreaming sector investment reached Rp300.1 trillion, or 29.7 percent.

Faisal assessed that job opportunities from downstreaming investment need to be accompanied by human resource readiness in the regions so that project labour needs can be met by local workers with appropriate competencies.

“So that the jobs created for downstreaming projects can absorb local labour with suitable skills, so there is no skills gap,” he said.

He explained that downstreaming, especially mining-based downstreaming, has the characteristic that upstream activities tend to be located in mining-producing regions, while downstream activities can develop in industrial estates and urban areas, including on Java.

According to Faisal, attention to the quality and suitability of the workforce is becoming increasingly important because the growth of formal employment is still tending to be slow compared with the growth in the number of job seekers.

“Formal employment is growing slowly. The number of job seekers is growing much faster, so more and more job seekers are finding it difficult to access formal employment, especially full-time work,” Faisal said.

Data from Statistics Indonesia (BPS) shows that 147.67 million people were employed in February 2026. Formal workers were recorded at 59.93 million people, while informal workers reached 87.74 million people.

Compared with February 2025, formal workers increased from 59.19 million people, while informal workers rose from 86.58 million people. The Open Unemployment Rate (TPT) in February 2026 was recorded at 4.68 percent, down 0.08 percentage points year-on-year.

Faisal assessed that the limited availability of quality jobs has caused some job seekers to enter the informal sector, which among other things faces challenges in terms of wages and labour protection.

The employment situation, according to him, is also related to the challenge of ensuring that economic growth provides more equitable benefits to society, including the middle class.

Referring to the 2024 National Socio-Economic Survey (Susenas), Faisal said the condition of the middle class has not fully recovered after declining since the start of the COVID-19 pandemic.

“So the problem of the middle class declining, being downgraded to the class below, has still not recovered until now, even though growth is still around 5 percent,” he said again.

According to him, economic growth of around five percent does not automatically guarantee that economic benefits are distributed evenly if it is not accompanied by the creation of quality jobs.

“Growth alone does not necessarily cause or can have an impact on fair economic distribution,” Faisal said.

Therefore, he assessed that downstreaming development needs to go hand in hand with improving the quality of the workforce and aligning industry needs with education and training so that investment opportunities can be utilised more by local workers.

The Ministry of Manpower (Kemnaker) has designated 46,160 university graduates as participants in the 2026 National Internship Programme Batch 1, Wave II, after the registration stage was followed by 732,483 people.

For Wave II in 2026, the government has increased the National Internship Programme quota to 150,000 participants in order to expand work experience for university graduates and accelerate their transition into the world of work.

The Ministry is also running the National Vocational Training Programme, designed with a link-and-match approach so that participants’ competencies align with the needs of the business and industrial world. Throughout 2026, the programme is targeting 70,000 participants funded through the state budget (APBN).

In Batch I, 10,405 participants were declared to have passed from 29,850 applicants. Participants receive a number of facilities, including free training as well as training certificates and competency certificates from the National Professional Certification Agency (BNSP).