Infrastructure investment key to tackling poverty: ILO

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The International Labor Organization (ILO) recommended on Tuesday the Indonesian government invest in labor-intensive public infrastructure projects and support small and medium enterprises in order to tackle poverty.

The ILO said in a statement, released in conjunction with a report titled Working Out of Poverty: An ILO Submission for Indonesian PRSP, that the Indonesian government must increase economic growth to between 5 percent and 6 percent to help create more than two million jobs per year.

"These recommendations emphasize the need to place employment issues at the center of the poverty reduction strategy based on the conceptual framework of 'Decent Work for All,'" Alan Boulton, country director of the ILO in Indonesia, said.

More than 42 million people in Indonesia were unemployed at the end of 2003, and that number is expected to exceed 45 million by the end of this year.

The head of the Center for Labor Development and Studies, Bomer Pasaribu, warned that unemployment could pose a threat to the upcoming legislative and presidential elections.

The ILO report said the Indonesian government should also identify sectors with employment potential, incorporate employment objectives into macro and sectoral policies, set clear employment targets, empower the National Tripartite Council and implement recent and proposed labor law reforms.

In addition, the government should improve the quality of education, particularly vocational training and enhance training for small and medium enterprises and informal sector operators.

The ILO also highlighted the need to implement the National Action Plan on the Worst Forms of Child Labor at the local level, and support young people in their transition from school to work.

According to the report, despite improved macroeconomic and political stability in Indonesia, economic growth remains below 4 percent, governance concerns persist and poverty reduction remains a tall mountain to climb.

It stated that 110 million of the 216 million people in Indonesia spent less than US$2 per day and remained vulnerable to falling back into severe poverty, despite the fact that poverty had been reduced from 27 percent of the total population in 1999 to 16 percent in 2003.

Furthermore, the country continues to under-perform in comparison to its neighbors in access to quality health, education and other basic services, as reflected in the National Millennium Development Goal indicators, the report said.

Weak governance is deterring investors and undermining services, especially to the poor, according to the ILO.

Although the government has implemented reforms that could lead to more effective and accountable government and an increase in growth rates, the focus must now be on the implementation of these reforms and putting in place an effective poverty reduction strategy paper (PRSP), it added.

The PRSP is scheduled to be completed in June this year.

The ceremony to mark the release of the report was attended by, among others, Joharis Loebis, chairman of the government's PRSP team, and Azita Berar-Awad from the ILO's Policy Integration Department.