Improving Indonesia\'s Trade Balance and Attractiveness

KOMPAS/PRIYOMBODO

Jobseekers flock to the Indonesia Career Expo at Balai Kartini in Jakarta on Tuesday (15/10/2019). The job exhibition is still full of jobseekers despite the growing online job market. According to data from Statistics Indonesia (BPS), the number of workers in February 2019 was 136.18 million people, up 2.24 million compared to February 2018. In line with the workforce increase, the Labor Force Participation Rate (TPAK) also increased by 0.12 percent.

JAKARTA, KOMPAS - Improving the trade balance is one of the most important steps the government must take in the next five years.

It is feared that the uncertainties in the global economy will continue and further affect Indonesia\'s exports. On the other hand, the escalation of the United States and China trade war, which has seen no signs of ending , has actually opened opportunities for Indonesia to fill the market gap.

The appeal of Indonesia must be improved to attract investment either from the US or China. According data from Statistics Indonesia (BPS) as quoted by Kompas on Friday, Indonesia\'s trade balance suffered a deficit of US$1.94 billion during the January-September period. In 2018, the annual trade balance reached $8.69 billion.

Institute for Development of Economics and Finance (Indef) researcher Abra PG Talattov said the trade deficit should be stopped in order to improve the current account by maintaining the stability of the rupiah exchange rate.

"There are two sides that need attention, namely improving trade performance and attracting investment, both portfolio investment and foreign direct investment," he said

KOMPAS/PRIYOMBODO

Monitors surround a female officer waiting to serve customers of the One-Stop Service (OSS) integrated business licensing facility on Wednesday (11/9/2019) at the office of the Investment Coordinating Board (BKPM) in Jakarta. The BKPM has set an investment target of Rp 792 trillion (US$56.15 billion) for 2019, comprising Rp 483.7 trillion in foreign direct investment and Rp 308.3 trillion in domestic investment – of which Rp 395.6 trillion has been realized in the first half of the year.

The economy

A survey conducted by Kompas Research and Development in October 2019 on the economy found that people were least satisfied with the government’s efforts to control the rupiah exchange rate, with a satisfaction rate of 39.5 percent.

Based on the Jakarta Interbank Spot Dollar Rate reference rate, the lowest level of the rupiah exchange rate during the period between Jan.2 and Oct. 10 was recorded at Rp 14,513 per US dollar on May 23.

There has been a quarterly current account deficit since the fourth quarter of 2011, while on an annual basis, there has been a current account deficit since 2012.

Separately, the director of the UNI Global Union Asia Pacific, Kun Wardana Abiyoto, believes that the existing vocational training centers can help improve the productivity of Indonesian workers whose highest level of education was mostly high school. These workers should be trained so that their skills can match the needs of the industry.

In the Kompas R&D survey, the level of satisfaction in the government’s efforts in providing employment or reducing unemployment was 41.2 percent. Indef economist Ahmad Heri Firdaus said there was a downward trend in the open unemployment rate, which reached 5.01 percent in February, 2019.

Kompas/Megandika Wicaksono

Tens of youngsters work as customer service for online store in Kampung Marketer in Tunjungmuli village, Karangmoncol district, Purbalingga, Central Java on Wednesday (7/3). Around 200 youngsters were trained to make use of the technology for business with an income around of Rp 1 million to Rp 4.5 million per month. The community founded by Nofi Bayu Darmawan, 26, aimed to reduce unemployment and urbanization.

The government is expected to focus on addressing the problem of unemployment, especially related to the structure of employment. Referring to BPS data, the number of people working in Indonesia reached 129.36 million as of February 2019, 40.51 percent of the total only had an elementary school education.

The government is also expected to be more adaptive to changes in the labor market

With an educational background of only elementary school, workers will face difficulties in switching jobs. In fact, the challenges of Industry 4.0 are in front of us. "If the government decides that one of the focuses of the 2020-2024 development programs is human resources, we must be aware that the impact will not be immediate. The government is also expected to be more adaptive to changes in the labor market, "Ahmad said.

Infrastructure

The empowerment of the fishery sector is expected to be more optimal in the government’s upcoming agenda. This way, the fisheries sector will be more competitive. From the results of the Kompas R&D survey, people’s satisfaction with the government\'s efforts in empowering farmers and fishermen was 58 percent.

The chairman of the Indonesian Traditional Fishermen Association, Marthin Hadiwinata, said the government program to empower fishermen over the past four years was quite clear, but lacked implementation. A number of fundamental issues, such as financial assistance and fisherman protection should be resolved.

"The challenge for the next five years is that the government’s control over fishing activities must be proportional to the fishermen empowerment program," said Marthin.

Meanwhile, the chairman of the Indonesian Logistics Association, Zaldy Ilham Masita, said that the development of infrastructure that supported connectivity over the past five years has had a positive impact.

Additional options for transportation are an important factor for logistics because it will be easier to adjust to the characteristics of the products or goods to be transported

The transportation of goods is smoother with more options of transportation modes for logistics.

"Additional options for transportation are an important factor for logistics because it will be easier to adjust to the characteristics of the products or goods to be transported," said Zaldy.

Zaldy suggested that infrastructure development to support connectivity needs to be focused on infrastructure that has a direct impact on the people\'s economy, namely infrastructure for tourism. (CAS/ MED/ LKT/ NAD)