Restore Purchasing Power, Indonesia's Middle Class Needs Quality Jobs

JAKARTA — Indonesia’s middle class is said to need quality employment opportunities and supporting infrastructure such as public transport more than government stimulus packages.

UOB’s ASEAN Economist Enrico Tanuwidjaja agrees that Indonesia’s middle class requires far more than simple stimulus or incentives alone.

“It is not just about incentives or stimulus — there is indeed a need for quality employment,” he said following UOB’s Media Editors Circle event on “How the Middle Class Thrives in Economics Volatility” on Monday, 2 March 2026.

He added that the manufacturing sector is one area capable of creating quality job opportunities. Tanuwidjaja explained that providing vocational schools, technical colleges and training to give people insight into manufacturing sector employment represents a viable approach.

“For the middle class, there is a way out,” he said, “rather than waiting for incentives. They need a new opportunity or confidence, and the manufacturing sector is key to restoring this. It is therefore vital that this sector absorbs labour.”

He added that the government currently needs to boost demand-side factors rather than supply from the manufacturing sector.

“The problem in Indonesia and across the world is on the demand side — consumer confidence, because currently people’s purchasing power is beginning to erode,” he explained.

“We must revitalise the manufacturing sector, because it is the backbone of any nation, including Indonesia,” he said.

Tanuwidjaja explained that manufacturing sector growth is also expected to restore middle-class purchasing power. “It is vital that they absorb labour, increase purchasing power, and ultimately our economic growth becomes higher, better quality and more sustainable,” he said.

He noted that manufacturing sectors currently attracting foreign investment are dominated by transport, warehousing, logistics and agriculture.

“These are hot areas at the moment and I believe they need continued emphasis,” he added.

When the planting season ends, farmers can transition to online motorcycle taxi work whilst awaiting harvest season, he suggested. “So within 12 months, they become fully optimised,” he said.

Tanuwidjaja noted that middle-income earners typically find themselves in a difficult position. “They receive too many incentives from government, yet are expected to stand on their own feet,” he explained.