Increasing people’s income is key to improving a country’s Human Development Index (HDI) score quickly. To achieve this, jobs, qualified manpower and stable economic conditions are required.
By
·3 minutes read
JAKARTA, KOMPAS— Increasing people’s income is key to improving a country’s Human Development Index (HDI) score quickly. To achieve this, jobs, qualified manpower and stable economic conditions are required.
“Increasing Human Development Index (HDI) is not about making everyone in the nation into a super version of themselves but merely about giving them the ability to choose,” University of Indonesia Demographic Institute chair Turro S. Wongkaren said in Jakarta on Wednesday (11/12/2019).
Indonesia’s HDI reading in 2018 was 0.707, giving the country a position among countries with a high HDI result and placing the county at rank 111 of 189 countries. This year, 62 countries have very high HDI results, while 54 have high, 37 have medium and 36 have poor HDI scores.
The higher a country’s human development, the more ability its people have to choose. A healthy, educated and high-income people will enjoy more options in jobs, places to live and the length of working.
To improve on the HDI, investment in human resources is required. Investments in health and education yield longer results. Meanwhile, per-capita income can boost human development quickly.
Indonesia can accelerate its per-capita income improvement as it is currently enjoying a demographic bonus, marked by a huge productive-age population. However, it must be ensured that they can do quality work that leads to prosperity.
Turro said the government should prudently manage its manpower and economic policies. Currently, 98 percent of Indonesian businesses are micro, small and medium enterprises (MSME), and they absorb 75 percent of manpower. “Indonesian economic improvement policies should not focus only on big industries. MSMEs must also be cared for,” he said.
Social protection
To accelerate HDI improvement, the World Bank recommended that Indonesia expands social protection. “Human capital investment not only opens access to basic services such as health and education but also establishes an inclusive and efficient social protection system”, said the World Bank’s acting country director for Indonesia and Timor Leste, Rolande Pryce.
World Bank chief economist for Indonesia, Frederico Gil Sander, said Indonesia’s social protection programs were limited to reducing the expense burden of the poor, especially for health and education. This is despite social security systems’ ability to improve per-capita income.
Therefore, Indonesia must improve its social protection program. Ideally, everyone must have basic social protection coverage. However, Indonesia’s social protection program currently only covers the poorest 10-20 percent of the population.
Basic social protection coverage could be established by integrating the Family Hope Program and the Indonesian Smart Card Program. This would extend the coverage of the social protection programs based on different benefit criteria in line with economic needs and expand the disability program.
National Development Planning Agency undersecretary of population and manpower Pungky Sumadi said improving per-capita income to accelerate human development would be prioritized in the next five years.
Meanwhile, CSIS economy department chief Yose Rizal Damuri said it was important to anticipate digital technology developments and Industry 4.0. The workforce must be equipped with new skills and expertise to help them adapt to the latest technology.
With proper skills, Indonesian employees can be more productive and will enjoy better opportunities to improve their income and eventually improve the national per-capita income and HDI level. (MED/KRN/MZW)