Distortion in economy causes unemployment

Distortion in economy causes unemployment

JAKARTA (JP): The way Indonesia's economy works means that
what students learn in universities is of little use in the work
place, hence the large number of unemployed graduates, concluded
a discussion, Antara reported.

The discussion on the "Political Economy of the Educated
Unemployed" was held Tuesday at the Institute for the Development
of Economics and Finance (Indef).

Speakers included Indef researchers Didik J Rachbini, Faisal
Basri and M. Nawir Messi, legislator Sukowaluyo, and head of the
Agency for Manpower Planning and Development Yudo Swasono.

Data compiled by the Ministry of Manpower showed that only 35
percent of 217,180 university graduates found employment in 1994,
compared to 36 percent of 218,475 university graduates in 1995.

Sukowaluyo of the Indonesian Democratic Party said economic
distortions in the form of monopolistic and oligopolistic
practices had resulted in many university graduates failing to
find employment.

"More university graduates will be recruited if business
activities are not confined only to particular people," he said.

He said he hoped the government would take concrete measures
to settle problems brought about by these economic distortions.
Otherwise, the rate of unemployment among university graduates
would rise and some day become a pressure factor.

"The higher the education one has, the greater expertise one
will have in committing a crime," he said.

Indef researcher, Nawir Messi, suggested a few things to
improve the manpower sector. He said the structure of "incentives
for manpower," such as salary, in the various economic sectors,
must be put in order.

Secondly, he said, the bureaucracy must stop acting as a
safety valve, a role it has assumed by recruiting university
graduates who fail to find employment through open competition.

Acting as a safety valve is contradictory to the present
demand for the government to initiate reforms in public
administration, he said.

Thirdly, he said, the education needed reform so that higher
learning institutions were allowed greater autonomy to keep up
with rapid changes in society.

Rachbini said the problem of unemployment was inseparable from
the supply and demand of manpower. He also said the existing
educational system was to blame for the unemployed university
graduates.

The strategies of national development have failed to derive
optimum benefits from Indonesia's educated human resources
because the development policies applied often did not match
social conditions, he said. (swe)