Dull employment prospects

Dull employment prospects

The Economic Social Commission for Asia and the Pacific (Escap) predicts that it will take 10 years for Indonesia to reach 7 percent annual economic growth.

That means the unemployment rate will remain high over the next 10 years and the roadsides will remained crowded with vendors. Security disturbances will also remain a danger in these circumstances.

According to Escap, Indonesia's economic growth in 2005 and 2006 will be between 5 percent and 6 percent. This year's growth is expected to reach 4.8 percent.

The only formula for dealing with the country's problems is to encourage investment, which has been sluggish for years. Most of the investment coming in flows into property (80 percent), with less than 20 percent going to labor-intensive industry.

The government has been taking steps to boost investment. The latest move was the issuance of Presidential Decree No. 29/2004 on the centralization of the authority to license foreign and domestic investment with the Investment Coordinating Board (BKPM).

This decree is significant, but will the BKPM be able to handle this authority?

What investors really need is a guarantee of political and security stability.

The peaceful April 5 legislative election should provide the impetus for a peaceful presidential election. If the election takes place without any problems, more investment will flow into the country, boosting economic growth. The result of this would be that unemployment could be reduced.

-- Bisnis Indonesia, Jakarta