KPEN calls MPR to help solve unemployment problem

A'an Suryana, The Jakarta Post, Jakarta

The National Economic Recovery Committee (KPEN) called on lawmakers to seek ways to help resolve the country's pressing economic difficulties, particularly unemployment.

"Although there are signs that certain (macroeconomic) indicators are improving, there are still many economic problems that must be addressed," KPEN chairman Sofjan Wanandi told reporters at a media conference.

The People's Consultative Assembly (MPR), the country's highest lawmaking body, is holding a 10-day Annual Session to formulate ways to boost the country's fragile democracy. One of the main items on the agenda is the amendment to the Constitution.

But Sofjan said that lawmakers should also make solving economic problems a priority.

He told The Jakarta Post that KPEN supported plans by lawmakers to issue a special MPR decree on economic recovery, but quickly added that the decree must stipulate clear measures and specific targets for the government in fixing the economy, particularly on how to resolve the unemployment problem.

Economists previously criticized the MPR decree draft as being "too general and lacking in clear-cut guidelines".

The decree on economic recovery is meant to provide guidelines for the government to accelerate economic recovery.

Sofjan said that the country's economy, which contracted by nearly 14 percent in 1998 in the wake of the political and economic crisis, was still moving at a slow pace and this was not enough to significantly absorb the millions of people put out of work by the crisis.

He explained that while the cash-strapped government could not be expected to boost spending to push economic growth, other economic movers, like export and investment, were languishing due to various uncertainties, such as labor disputes and security problems.

"The impact of the slow economic recovery process has limited job creation and spurred a rise in unemployment," Sofjan said.

"Every year, there are 2.5 million new people looking for work. Unfortunately, the current 3 percent economic growth can only absorb 1.5 million people," he said.

According to one estimate, the number of unemployed in this country is about 40 million. This figure will rise with the tens of thousands of workers expelled from Malaysia.

"Unemployment is a very serious problem. This could create instability," Sofjan said.

He urged the government to create a conducive climate for investors and businesses to help resolve the unemployment problem.

He said it was high time that lawmakers create the momentum needed to accelerate an economic recovery.

KPEN also urged the government to immediately launch measures to create legal certainty, curb corruption and boost security to give investors peace of mind.

"The investment bill must be deliberated and passed into law immediately," it said.

He added that investors concerned about labor rulings that overly protect workers at employers' expense must be quickly addressed to prevent investors from moving out of the country.

He added that rampant smuggling, which had created serious problems for local businesses, must also be curbed.