Quality Employment

SUMBER: BANK DUNIA

Projected economic growth in Indonesia. Source: World Bank

Indonesia\'s economy in the second quarter of 2020 contracted 5.32 percent. The downturn must spur the creation of quality jobs.

Our challenge is to quickly reverse the slowdown into growth, especially ensuring employment for 60 percent of the population under social protection programs to make them better off. They are the very poor, poor and vulnerable middle class, who are directly affected by the Covid-19 outbreak.

With the handling of Covid-19 at a moderate level, we must be able to find ways to move the economy by creating quality jobs while maintaining health protocols. This is all the more urgent because we have a large number of people of productive age.

Also read : Revving the Engine of Economic Growth

The International Monetary Fund (IMF) suspects that the impact of Covid-19 on Asian countries is a slowdown in global trade, a longer-than-expected lockdown of the region, an increase in the prosperity gap and weakening household and business spending.

We experience all four of these to varying degrees. Statistics Indonesia (BPS) has recorded that household spending as the driver of economic growth has contracted 6.51 percent. On the other hand, people\'s savings in national banks have increased, indicating that the middle class, which amounts to 115 million people, feels uncertain about their future.

Also read : Economy in the New Normal

KOMPAS/ANGGER PUTRANTO

Workers put the finishing touches on a railroad factory to be operated by PT Stadler INKA Indonesia in Kalipuro, Banyuwangi, East Java, Tuesday (4/8/2020). The factory, which is targeted to start production in late 2021 or early 2022, has a production capacity of 500 cars (wagons) per year.

Currently our exports are very limited, and because of that the domestic business sector has become our mainstay, especially the labor-intensive industrial sector and micro, small and medium enterprises (MSMEs). We want to focus on developing sectors that impact people, create quality jobs and generate new growth.

Sectors whose raw materials are sourced domestically, such as food, health and phytopharmacy, inter-regional tourism, labor-intensive infrastructure and domestic raw materials, inter-regional trade, will have multiple effects on job creation. Digital infrastructure needs to be expanded and strengthened not only as a lever for the creation of new economic activities, but also to support other areas of activity, such as education and health.

Also read : The Long Road to Economic Recovery

We hope that the Covid-19 Response and Economic Recovery Committee can immediately implement economic stimulus in a sector that can move quickly and at the same time transform the economy along with the new life order. The handling of Covid-19 must also be better to provide a sense of security to the middle class who has purchasing power.

Currently, the role of the government through its fiscal mechanisms is very dominant. It is very important that we jointly prevent deviations in the form of collusion, corruption and nepotism during the economic recovery. On the other hand, the distribution of working capital for MSMEs and corporations as well as social assistance must be carried out quickly to avoid an economic depression, which will exacerbate poverty and social inequality.