Job creation tops the list of Mega's economic platform

Job creation tops the list of Mega's economic platform

Zakki P. Hakim, Jakarta

President Megawati Soekarnoputri and her running mate, Hasyim
Muzadi, promise to create millions of new jobs in the next five
years if she gets reelected for a second term in the upcoming
election.

But critics have said that this is an area where she has
generally failed so far.

In a document describing the economic platform of the pair,
the economy is envisaged to grow by an average of 6.8 percent per
year, peaking at 7.9 percent in 2009, in order to create some
12.9 million jobs during the five-year period. This, in turn, is
expected to significantly resolve pressing unemployment problems.

Although the current Megawati administration has been
applauded by many for successfully stabilizing the country's
macroeconomic indicators such as inflation and interest rates, it
has failed to transform this into higher economic growth, mainly
due to a lack of fresh investment amid lingering legal
uncertainty, corruption and security problems.

The economy has been growing at a mediocre rate of around 4
percent during the past couple of years, mainly driven by
domestic consumption. Economic growth needs to accelerate to 6
percent to 7 percent per year in order to create sufficient jobs
for the millions of unemployed. Higher investment is crucial to
the acceleration of economic growth.

High unemployment has been the most pressing problem since the
country tumbled into an economic crisis in the late 1990s. The
country's open unemployment figure is around 10.5 million, while
people living below the poverty line total around 40 million (of
the country's 220 million population).

But Megawati is confident that investment will return.

"Most of the investment would be financed from domestic
sources," stated the economic platform document, adding that to
achieve the above growth target, a huge investment of around 27.1
percent of gross domestic product (GDP) would be needed.

According to the document, the unemployment rate is projected
to fall to 6.3 percent in 2009 from last year's 9.5 percent.

As part of a job creation program, the Megawati-Hasyim duo
will also empower small and medium-scale enterprises by providing
easier access to bank loans, with priority in the eastern part of
Indonesia.

The pair also sees the agriculture sector as playing a
dominant role in absorbing unemployment and plans an average 2.8
percent growth in this sector, compared with the 2.1 percent
realized from 2001 to 2003.

The Megawati government plans incentives for farmers.

Apart from job creation, other agenda items that top the list
in Megawati's economic platform are maintaining fiscal
sustainability and improving the international competitiveness of
the local economy.

The government's debt level will be reduced to 32.8 percent of
GDP in 2009 from this year's estimate of 64.4 percent.

Reducing the debt will involve an attempt to trim the budget
deficit by strengthening fiscal sustainability through higher tax
revenue, new foreign debt management and efficiency in government
expenses.

Despite the controversy on Indonesian workers abroad, the pair
supports the sending of more workers as a solution to help
improve conditions for the domestic workforce.