Job creation a tough priority

Job creation a tough priority

JAKARTA (JP): While the mission of new Coordinating Minister
for the Economy Dorodjatun Kuntjoro-Jakti to make job creation
his priority is appealing, experts warned its implementation
faced wide-ranging problems arising out of labor disputes,
regional autonomy, tax policies and upholding law and order.

National Economic Recovery Committee (KPEN) executive Anton J.
Supit praised the plan, saying that since the economic crisis
struck the country in 1997, the government had all but ignored
the millions of jobless Indonesians.

"I never heard that (priority) coming from the previous
governments," Anton told The Jakarta Post over the weekend.

Last week, Dorodjatun told the media that job creation was key
to the country's economic recovery and thus would be his
priority.

But Anton warned that making job creation a government
priority, demanded strict discipline in its implementation.

Job creation, he said, entailed attracting investment, which
in turn demanded a conducive business climate.

"We're talking about restoring law and order, improving tax
and labor policies and tackling confusion over the regional
autonomy," he explained.

The government, he said, should break down the task into
workable policies covering all related sectors.

Anton suggested the new economic ministers meet local and
foreign investors to understand the problems at the micro level.

One problem, he said, was that regional autonomy had made
investment in the regions much harder.

He said that for instance, in some regions investors' permits
from the Investment Coordinating Board (BKPM) had been ignored.

Separately, Lili Asdijudiredja executive of the Indonesian
Textile Association (API) said government attention toward the
jobless was long overdue.

"The government previously paid more attention to the welfare
of those already working," he noted.

Lili further said a conducive business climate should not be
only measured by a favorable rupiah-dollar exchange rate or
interest rates.

"It's high time the government sees the real situation on the
field," he said, referring to the rampant security problems many
industries face.

Lili warned Indonesia's poor law and order situation could
force foreign investors to relocate their industries to
neighboring countries.

Last month, the Indonesian Chamber of Commerce and Industry
(Kadin) had already urged the new government to focus on job
creation.

It said past priorities on monetary stability by adopting a
policy of high interest rates had come at the expense of
promoting investment that would have otherwise created new jobs.

Indonesia's huge unemployment level of 40 million people was
also liable to foster security risks, thus deterring investors,
Kadin warned.

Meanwhile, economist Hadi Soesastro said Dorodjatun's aim to
prioritize job creation was good in itself, but useless unless he
explained how to achieve it.

"We need economic growth and a healthy fiscal to stimulate
it," Hadi said.

According to him, with Indonesia's labor force growing by
about 2 percent to 2.5 percent a year, the economy needs to grow
by 7 percent to generate more jobs.

Last year, the country's economy grew by only 4.77 percent,
with many economists betting on lower growth this year.

Foreign investment expert Harvey Goldstein of PT Harvest
International Indonesia said focusing on unemployment implied the
need for more direct investment.

But the government could hardly expect investors to come until
investors' confusion over the regional autonomy had been purged.

Goldstein attributed this confusion partly on the ill-defined
positions of local administrators in the government structure.

Chairman of the Indonesian Prosperity Trade Union (SBSI),
Muchtar Pakpahan also hailed the government's new policy
direction.

He pointed out that one of the key challenges was to change
the mind-set of officials in the ministry of manpower.

According to him, officials there have no experience in
finding people jobs.

Creating jobs, he said, demanded the government develop the
economy in the rural sectors that absorbed most of Indonesia's
workforce.

He cited the ministries of agriculture, forestry, marine
resources, transportation, and tourism as capable of creating the
most job opportunities.

"The government must synchronize each ministries' working
plan, before drawing up a workable plan for creating jobs," he
said.

He cited a 1998 SBSI research that showed the government must
spend Rp 2.5 million for each person it wants to provide a
job.(bkm)