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)