Expert claims 1.2m jobs lost this year

Ridwan Max Sijabat, The Jakarta Post/Jakarta

The true picture of the country's unemployment is much worse than is being acknowledged by the government, a prominent labor analyst said.

Bomer Pasaribu, director of the Center for Labor and Development Studies (CLDS), said on Friday that the number of workers who had lost their jobs this year was estimated at 1.2 million.

He warned that the country would soon be facing an explosion of unemployment and poverty along with other negative social impacts if the government failed to create more job opportunities.

He was responding to an earlier report quoting a senior official at the Ministry of Manpower and Transmigration as saying that the number of dismissed workers from January to November of this year was only around 110,000. The official, however, admitted that the data was incomplete as since the implementation of regional autonomy in 2001, the office often encountered difficulties in compelling regional administrations to submit their labor statistics.

Bomer, who is also a former manpower minister, said that his estimate of the number of dismissed workers was based on a recent survey of industrial zones in Java, Kalimantan and Sumatra.

According to the survey, the highest number of labor dismissals occurred in the manufacturing and plywood industries and had a lot to do with the two fuel price hikes in March and October this year.

"Labor-intensive companies in the forestry and manufacturing sectors conducted downsizing and cut the number of their employees because of the rising prices of imported raw materials and the government's policy barring the export of logs," he said.

Bomer predicted that open unemployment would increase to 13 million in 2006 from 11.6 million this year, while hidden unemployment, referring to the number of people working less than 35 hours a week, would reach more than 40 million.

"An unemployment explosion will happen unless no serious attention is paid to cope with it," he said.

Bomer, who is also an economist at the Bogor Agriculture Institute (IPB), suggested that the government push the growth of small-scale enterprises, particularly in the agricultural, marine and handicraft sectors, and revive the social safety net program to help ease the unemployment problem that has reached alarming proportions.

"If the country's economic growth could reach at least seven percent, the unemployment rate could be reduced to 10 million," he said.

President Susilo Bambang Yudhoyono has recently reshuffled his economics ministers, whose main task would be to promote macroeconomic stability and lure badly needed investment to create higher economic growth.

Regarding poverty, Bomer said that the number of poor this year had nearly doubled to 72 million from 36.5 million in 2004, and increased by 30 percent compared to 28.5 million in 1980.

"The increasing number of poor has something to do with zero growth in investment, fuel price hikes, high inflation, which reached 18 percent this year, and the damaged infrastructure in rural areas," he said.

Separately, chairman of the Indonesian Labor Exporters Association (Apjati), Husein Alaydrus, said the government should allocate more funds for training programs and disburse more bank credits to labor exporters to send more workers overseas in an endeavor to help cope with the rising unemployment and poverty problem.

"The overseas market is open for Indonesian workers, but we cannot meet the demand because of the absence of serious attention by the government to accelerate labor export," he said, saying that Indonesia could increase labor export to 1.5 million annually from the current 325,000.