Indonesia's jobless rate 'serious'

Indonesia's jobless rate 'serious'

JAKARTA (JP): Minister of Manpower Abdul Latief, disclosing
the official unemployment rate as ranging from four and 40
percent -- depending on the definitions used, warned yesterday
that Indonesia is facing a "very serious unemployment problem."

Latief told reporters, after reporting to President Soeharto
at Merdeka Palace, that he plans to call for a series of
coordinating meeting with other cabinet ministers, to discuss
Indonesia's unemployment issue.

He explained that the government is now using three different
definitions in determining the unemployment rate in the country.

The first, which has been used all this time, defines
unemployment as those who work less than one hour a week. Using
this definition, Indonesia's unemployment rate in 1994 was put at
3.65 million, or 4.37 percent of the total work force.

The second definition puts unemployment as those who work less
than 15 hours a week. In 1994, there were 11.15 million people,
or 13.33 percent of the work force, who fell into this category.

The third definition brings together anyone who works less
than 35 hours a week as unemployed. Under this category, the
unemployment rate is put at 33.35 million, or a staggering 39.85
percent of the work force.

Latief gave optimistic projections, saying that the
unemployment rate of any of the definitions above will decline,
based on the assumption that Indonesia's economy will perform
well in the next decade or so.

He said that his planned coordinating meetings would take a
"serious look" at the efforts of bringing down the unemployment
rate. "We're counting on all governors to solve the unemployment
problem in their respective provinces."

The key to solving Indonesia's unemployment problem is to
encourage the growth of small and medium enterprises, which
together, still account for the largest number of jobs available,
he said. "The government will offer them incentives to grow."

The government is also revamping its vocational training
centers, to better suit the needs of small and medium
enterprises, he said.

One of the most serious problems confronting small and medium
enterprises is their poor management, particularly at the middle
level, Latief, a successful businessman recruited into the
cabinet by President Soeharto in 1993, said.

Latief also reported yesterday to the President on ambitious
plans to expand the business of PT Astek, the state-owned workers
insurance company he oversees, into other fields of business,
using its huge funds accumulated from insurance premiums.

Current projections of Astek's business activities and
revenues, he said, would make the company one of the largest and
most modern insurance companies in Asia.

Astek plans to set up subsidiaries active in profitable
businesses, such as pulp and plywood, he said, stressing that,
from a business point of view, these two areas are considered
among the safest.

Latief said he was optimistic that Astek's annual revenue from
its Workers' Social Insurance plan premiums will increase from Rp
0.9 trillion (US$390 million) this year, to Rp 9.83 trillion in
the year 2000, Rp 28.75 trillion in 2008 and 61.67 trillion by
2018.

Its accumulated investment fund will grow from Rp 3.20
trillion this year, to 14.92 trillion in 2000 and 706.33 trillion
in 2018.

This projection is based on the assumption of an ever growing
number of participants in the insurance plan.

PT Astek has launched a vigorous campaign to ensure that
companies register all their workers for the social security
program, something which is compulsory under a 1992 law, although
the government has given companies time to adjust to the
legislation.

To prepare Astek divest its business, the company has been
undergoing a "re-engineering" process in its organization and
management, the minister said.

Latief added that the President has already approved Astek's
expansion plans. (emb)