The World Bank has recommended four reforms to generate jobs in Indonesia, which has been hit hard by the COVID-19 pandemic, in its Indonesia Economic Prospects (IEP) report titled ‘Boosting the Recovery’.
“The reformation plans for creating jobs can be built on four pillars,” World Bank’s representative chairman for Indonesia and Timor Leste, Satu Kahkonen, said here on Thursday.
The first pillar is to improve employee retention through training and up-skilling until the economy can be smoothly recovered, she said.
The second pillar is to focus on creating middle-class jobs to improve productivity, incomes, and ensure higher social benefits during the ongoing crisis, she added.
She acknowledged Indonesia’s efforts towards job creation, which are critical for reducing poverty, but said that middle-class jobs are still few in the country.
“Competition, investment, and trade will be the strong machines for creating middle-class jobs,” she said.
Kahkonen also described the Indonesian government’s implementation of the Omnibus Law as a significant step towards tackling the problems of investment and labor.
As the current focus is on effective implementation and complementary reformation, the government has been able to meet challenges and tackle trade obstacles faced by the country, she noted.
The third pillar for job creation is empowering the workforce through skill addition, which can be achieved with the help of learning and education, Kahkonen said.
Increasing productivity will not be enough, World Bank’s prime economist for Indonesia, Habib Rab, stressed adding, it has become necessary to improve the skills of prospective workers.
This can be achieved through good governance of the education system, Rab said.
“It can generate high-skilled talents or workforces aligned with industrial standard,” he pointed out.
The fourth pillar for job creation is bringing more women into the workforce to narrow the gender gap in employment, he said.
"We have estimated that “Indonesia can increase jobs by 59 percent by 2021, and there will be significant growth by involving women’s participation,” he added. (INE)
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