Indonesian companies are shedding jobs as they grapple with the weakest economic growth in six years, adding to the troubles facing President Joko Widodo, who was elected last year on pledges to dig the country out of a rut.
Government data might suggest no cause for alarm – unemployment was 5.81 percent in February, up only slightly from 5.70 percent a year earlier – but the official numbers are notoriously unreliable and don’t adequately cover the informal sector, which is two-thirds of Southeast Asia’s biggest economy.
Recent reports of heavy lay-offs across the country paint a bleaker picture, and business executives, recruitment firms and jobseekers say it is getting worse.
Young people are being hit hardest; the International Labour Organization estimated the youth jobless rate was more than 20 percent in 2013, and economists believe it is higher now.
About a third of the workforce is aged 15 to 29, a youth bulge that could bring Indonesia, a country of 250 million people, the sort of demographic dividend China and South Korea enjoyed a generation ago – but only if there are jobs for the 2 million people joining the workforce every year.
“The government doesn’t have a blueprint for labour absorption,” said property businessman Hariyadi Sukamdani, chairman of the Indonesian employers’ association.
Chosen excerpts by Job Market Monitor. Read the whole story at RPT-Rising unemployment piles up problems for Indonesian president | Reuters.