Jumat, 27 April 2012

Programmes to Reduce Unemployment


Moderator’s Note: Dear members,  we are proud to post the Consolidated Reply (CR) of the Second Query on Programmes to Reduce Unemployment. We thank members for sharing their valuable knowledge and experiences. Your active participation,  queries, responses, criticisms, and suggestions  are welcome for the progress of your Community. We hope this forum significantly impacts Indonesian development, particularly in providing valuable solutions for issues in the Economic Development sector. Best regards, Thamrin Simanjuntak
Solution Exchange for the Economic Development Community
Consolidated Reply

Query:   Programmes to Reduce Unemployment – Experiences.

Compiled by Thamrin Simanjuntak, Moderator and Dewi Gayatri, Research Assistant
Issue Date: 23 January 2009


From Pandji Putranto. International Labour Organization – Education And Skills Training (EAST) Programme, Banda Aceh, Indonesia .
Posted 17 December 2008

I work at International Labour Organization, based in Banda Aceh.  We work with employment related issues.  In Aceh, as stated by BAPPEDA, the unemployment rate for 2007 was 10.96% (2006, 12.08%) and the poor accounted for 26.65% (2006, 28.28%) of the total population
Clearly these are some of the most problematic issues in the social-economic sector in The Province of Nanggroe Aceh Darussalam (NAD).

The increase in unemployment is especially due to young persons (thousands of new labourers - mostly senior high school graduates) who flood the limited labour market in The NAD yearly.  The number of large industries (eg KKA, AAF etc) closing down doesn’t help the situation.  In addition to this, micro, small, and medium enterprises in The NAD are still not ready to compete with  national-scale companies.

I note here that government, private enterprises, NGOs, households are the key actors.  Investment, new technology, training and education development are the strategies that usually apply.

Improvement in the quality of education, vocational training, and job creation are perhaps the right answers to the unemployment problem - easier said than done.

Through this forum I would like to request members to help by citing their expertise and experiences on the following:
·         What programs have proven to be effective, directly or indirectly, in reducing the unemployment rate in certain regions?  
·         What key factors were considered in designing these programmes?

I believe your contributions will be significant in creating better employment development strategies in Aceh and other places.


Responses were received, with thanks, from

1.                  Teuku Ansar Basly, Muslim Aid, Tapak Tuan, South Aceh, Nanggroe Aceh Darussalam , Indonesia
2.                  Auriza Satifa, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia   
3.                  Ferry Samosir, Oxfam, South Nias, North Sumatera , Indonesia
4.                  Silva Liem, Consultant, Jakarta , Indonesia
5.                  Kusdijono, Catholic Relief Services, Jakarta , Indonesia  
6.                  Anwar Siregar, Institute of Community Social Studies, North Sumatera, Indonesia
7.                  Idham Edo, Consultant, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia
8.                  Teguh Prasetyo Karyanto, The Jakarta Globe News, Jakarta , Indonesia  
9.                  Job Charles, International Organization for Migration, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia
10.              Zul Ashfi Mendrofa, Canadian Red Cross, Lahewa, Nias, North Sumatera , Indonesia  
11.              Sayu Komang, IDEP Foundation, Ubud, Bali , Indonesia




Summary of Responses

This request, from a member working in ILO, asked for community experiences and insights about programmes or strategies to increase employment in the province of Nanggroe Aceh Darussalam .

Contributors were generally of the view that there were many potential employment opportunities in Aceh, notably handicrafts, food  processing as established in Yogyakarta or other agri-businesses that utilize existing natural resources such as fruit trees or water hyacinth fiber.  One respondent cited a situation in Nias where the rebuilding work from the earthquake had led to an increase in skilled carpenters and construction workers, as well as increased availability of working capital and improved economic opportunities from the higher salaries paid.  Elsewhere in Indonesia , private sector companies have experience with joint programmes with government, small companies, and communities; one example was of a Recycling Center that had been established in Bali which potentially could also be developed in Aceh.  Additional opportunities that could be taken advantage of could be found with the Investment Coordinating Board (BKPM) and the Indonesia Chamber of Commerce and Industry (KADIN).

Developing employment creation programmes and strategies could start with research on mapping the current employment and unemployment conditions in the different regions, and identifying the situational factor such as geography and cultural values of the people.  Another area to research would be to identify the employment prospects from business opportunities. Members suggested encouraging the big private and government companies to find innovative ways to introduce Corporate Social Responsibility (CSR) approaches which could create more job opportunities as experienced in North Sumatera.  For example small-scale industries could be set up to utilize industrial by-products or under-exploited resources such as processing of rubber liquid, soap making from palm oil waste, or cattle herding in the plantation areas.

Other suggestions included:
  • Tapping the experience and willingness of the elderly to both increase the ranks of skilled employed and to instill a work ethic in the younger workers.  
  • Promoting entrepreneurship development that encouraged creativity to start small business by village people, young people and the people that are currently employed in large businesses.  
  • Improving education and skill development opportunities that are relevant to the local job market Promoting infrastructure development projects such as roads, bridges, ports, electricity and water, which result in opening up the region to enhanced economic development opportunities

One member, who had done the analysis, concluded the problem of unemployment is not due to any lack of motivation.   Based on responses received, there could be many ways to make a start to unemployment reduction.  If government, NGOs, private business and communities all played a role, it would contribute to their own prosperity as well.


Comparative Experiences

Yogyakarta

Entrepreneurship on Handicraft Small Industry (from Ferry Samosir, Oxfam, South Nias, North Sumatera , Indonesia )
The business activities of a handicraft producer slowed due to a shortage of material resources and skilled labour. However, the business already established a marketing network that guaranteed a certain quota of sales (captive market), producing decorative baskets made from water hyacinth fiber or eceng gondok and grass fibers. Now the business may expand to Aceh where these widely sought raw materials are in abundance.


Construction Works Provide Skills and Working Capital to the Villages (from Zul Ashfi Mendrofa, Canadian Red Cross, Lahewa, Nias, North Sumatera, Indonesia )
Canadian Red Cross constructed over 2000 homes in Nias for earthquake victims involving experienced and inexperienced carpenters, especially creating jobs for locals previously unemployed. Men and women divided work wherein men built the houses and women took care of materials. Workers received market-rate salaries and the project thus contributed around 3 billion rupiah to 26 villages in 1.5 years and will continue to create jobs in future.

North Sumatera

The Corporate Innovation to Create More Jobs (from Anwar Siregar, Institute of Community Social Studies, North Sumatera, Indonesia )
Investing in new plantations such as rubber and palm oil promotes similar patterns of regional economic development which helps deal with the unemployment problem of youth with no education and access to land.  Analysis demonstrated that such investments yielded positive and negative results. Crop diversification produces raw materials for industry and more specialized products (e.g., soaps of palm oil waste), thus creating employment options for young people.  

Bali

The Recycling Center (Integrated Waste Management) as a Business Opportunity (from Sayu Komang, IDEP Foundation, Ubud, Bali , Indonesia )
NGOs, private companies, and government work together in this business initiated by IDEP. Government provides the land, local communities conduct the day to day work, NGOs provide the training and the private companies provide the capital. This employs many workers by creating more businesses, both small and large scale which include collecting and processing garbage to produce new products, organic waste-based fertilizer, and creating a nursery for plant seeds.


Related Resources 
Recommended Documentation

ILO Programme in Cooperation with Government of Indonesia (from Pandji Putranto),
Programme Report; Decent Work Country Programme 2006 – 2010; International Labour Office; Indonesia; June 2007; English Version available at http://www.ilo.org/public/english/bureau/program/dwcp/download/indonesia.pdf  (PDF, Size: 151 KB).
Promotes opportunities for all women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity.

The Roles and Rights of Senior Citizens (from Teuku Ansar Basly, Muslim Aid, Tapak Tuan, South Aceh, Nanggroe Aceh Darussalam)
Narration; Executive Summary – Older People in Aceh , Indonesia 18 Months after the Tsunami; HelpAge International; Indonesia ; English Version available at
Explains about the rights of senior citizens and their roles in the social lives and economic development of communities

Sustainable Rural Livelihood (from Kusdijono, Catholic Relief Services, Jakarta , Indonesia )
Discussion Paper; by Robert Chambers and Gordon R. Conway; Institute of Development Studies ; 1991; English Version available at http://www.ids.ac.uk/ids/bookshop/dp/dp296.pdf (PDF, Size: 186 KB) and http://www.livelihoods.org/SLdefn.html 
Details practical concept of sustainable rural livelihoods, sustainable environment and social aspects, practical analysis of resources, productivity and small scale economics

From Thamrin Simanjuntak, Moderator

Sustainable Oil Palm Plantations
Paper; Indonesian Palm Oil Board; Ministry of Trade and Ministry of Agriculture – Republic of Indonesia; 2007; English Version available at http://www.indonesian-embassy.de/image/Palmoil/ Indonesian-Palmoil-2.pdf  (PDF, Size: 4.9MB).
Details how plantation companies conduct their corporate social responsibility by ensuring livelihood improvement of the local communities, providing job opportunities.

Various Models of Corporate Social Responsibility Applications
Report; Meeting Changing Expectations; World Business Council for Sustainable Development (WBCSD); Geneva, Switzerland; 1998; English Version available at  http://www.wbcsd.org/DocRoot/hbdf19Txhmk3kDxBQDWW/CSRmeeting.pdf (PDF, Size: 2.6MB)
Discusses proven effective ways of companies progressing together with communities including the creation of job opportunities and answering the needs of communities

Recommended Organizations and Programmes

International Labour Organization, Jakarta , Indonesia (from Pandji Putranto)
Jakarta Office: Menara Thamrin, Jalan Thamrin Kav 3, Jakarta 10250 , Indonesia ; Tel.: +62-21-3100766; http://www.ilo.org
Banda Aceh Office: ILO EAST Nanggroe Aceh Darussalam, Jalan Ksatria Geuceu Komplek 23239, BLK Ofifice Nanggroe Aceh Darussalam; Tel.: +62-651-47392
Aims to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue in handling work-related issues.

From Teuku Ansar Basly, Muslim Aid, Tapak Tuan, South Aceh, Nanggroe Aceh Darussalam, Indonesia

Muslim Aid Indonesia , Banda Aceh , Indonesia
Jalan T. Bintara Pineung No. 27, Banda Aceh 23116 Indonesia ; Tel.: +62-651-7411927/ 7551053; Fax: +62-651-7551443; http://www.muslimaidindonesia.org
Carries out a recovery program for kerupuk rambak industry in Segoroyoso Village , Pleret, Bantul and a CSO project accommodating community-based development plans

HelpAge International, Banda Aceh , Indonesia
Jalan Tengku Daud Beureueh Lorong Metro No. 5. Banda Aceh , Indonesia ; Tel./Fax: +62-651-24228; http://www.helpage.org/Emergencies/IndianOceantsunami/Indonesia
Builds capacity of 14 older people’s associations (OPAs) to develop into independent community-based organizations; that continue to engage in income generation activities.

From Kusdijono, Catholic Relief Services, Jakarta , Indonesia  

Catholic Relief Services, Jakarta , Indonesia
Jalan Wijaya I no 35, Kebayoran Baru, Jakarta 12170 , Indonesia ; Tel.: + 62-21-7253339; Fax: +62-21-7251566; http://crs.org/indonesia
Focused on food-aid program to address food insecurity through Food For Work, Health and Nutrition, and Income Generating Activity programs in parts of Indonesia

Chamber of Commerce and Industry (KADIN), Banda Aceh , Indonesia
Bale’ Saudagar, Jalan Taman Makam Pahlawan no.1,Kp Ateuk, Banda Aceh 23243 , Indonesia ; Tel.: +62-651-28371/28374 Fax: +62-651-28380; http://kadinaceh.com
Center for communication, information, representation, consultation, facilitation, advocacy of national and international network, included planning and employment.

Indonesian Investment Coordination Board (BKPM), Banda Aceh , Indonesia
Jalan T. Nyak Arif , Banda Aceh , Indonesia , Tel.: +62-651-51935/51377; Fax: +62-0651- 22184
Aims to project Indonesia as an attractive destination for investment and ensure the agreement accommodating national goals included monetary and employment.

IDEP Foundation, Ubud, Bali , Indonesia (from Sayu Komang)
Jalan Hanoman No.42 Ubud, Bali, Indonesia PO BOX 160 Ubud, 80571, Bali, Indonesia; Tel./Fax: +62-361-981504; info@idepfoundation.org; http://www.idepfoundation.org/indonesia/idep_wastegroup.html
Developed small-scale waste management pilot programs, increasing community awareness and encouraging their participation on tackling waste management problems,

Oxfam GB Indonesia, Jakarta , Indonesia (from Ferry Samosir)
Jalan Taman Margasatwa 26, Ragunan,
 Jakarta 12550
 Indonesia ; Tel.: +62-21-7811827; Fax: +62-21-7812321; Jakarta@oxfam.org.uk; http://www.oxfam.org.uk 
Oxfam's program in Indonesia involve all employment levels in the development program focus on emergency, education, livelihoods, gender equality, fair trade.

International Organization for Migration (IOM), Banda Aceh , Indonesia (from Job Charles)
Jalan Sudirman no. 32 Banda Aceh 23230 Indonesia ; Tel.: +62-651-43556; Fax: +62-651-43554; iomaceh@iom.int; http://www.iom.or.id/ 
Opted to provide beneficiaries with ways to make a living and become financially independent, includes providing livestock, sewing machines, small food and retail stock

Canadian Red Cross, Banda Aceh , Indonesia (from Zul Ashfi Mendrofa)
Jalan Pattimura no 3, Gunung Sitoli, Nias; Jl.Ajuen Jeumpet No.18B, Banda Aceh; Tel.: +62-651-7429409; Fax: +62-651-40469; http://www.redcross.ca
Built over 6,000 high quality permanent houses in districts of Aceh Besar, Aceh Jaya and on the island of Nias providing employment opportunities at the local community level

Recommended Communities and Networks

Forum Koordinasi Percepatan Pembangunan Ekonomi Aceh - Aceh Partnerships for Economic Development, Nanggroe Aceh Darussalam , Indonesia (from Thamrin Simanjuntak, Moderator)
Jalan Tgk Daud Beureueh No 26. Banda Aceh, Province of Nanggroe Aceh Darussalam , Indonesia ; Tel.: +62-651-21064; aped@aped-project.org; http://www.aped-project.org/diskusi/ forumdisplay.php?f=5
Facilitates discussions regarding accelerated economic development in the province of Nanggroe Aceh Darussalam.

Aceh Business Forum (from Dewi Gayatri, Research Assistant)
Coordinated by Australia Indonesia Partnership and International Finance Corporation, Jalan Abdullah Ujung Rimba No.12, Taman Sari, Banda Aceh, Nanggroe Aceh Darussalam, Indonesia , Tel.: + 62-651-21858, Fax. +62-651-635172; ltamanni@ifc.org, caidha@ifc.org
Provides information regarding policies, growth and economic opportunities on agribusiness, tourism, trades and industry in the province of Nanggroe Aceh Darussalam .

Recommended Portals and Information Bases

Jakarta Globe (from Teguh Prasetyo Karyanto
Provides global news of economic, business and political situations that affect Indonesia directly and indirectly in short term and long term period.


Responses in Full

Teuku Ansar Basly Muslim Aid, Tapak Tuan, South Aceh, Nanggroe Aceh Darussalam , Indonesia

Let me introduce myself, I used to work with HelpAge International which works to improve the welfare of senior citizens through advocacy programs.

I would like to add to the discussion the value of involving senior citizens, age 60 and up, as part of the initiative to reduce unemployment.  Though there is an assumption that the elderly are not productive, below are reasons why their services can be used to reduce unemployment:

They have life and work skills such as confidence, diligence, charm and endless spirit.  While increasing the employment rate themselves, the elders can pass this work ethic onto young people who need to learn those particular skills if they want to be employed, maintain their careers or start their own business.  (It might be interesting to conduct a survey on comparing work ethic when young to when old.  Also, identifying people who continue working until old age and how working has affected their lives and the affects it has on society as a whole).  

They create sustainability in the labor force.  The continuity of a country depends on the technology-skills transfer process from the elders.  As well, the skills they obtained come from teaching themselves through daily experiences and bring efficiency through experience.  Consider why knowledge and culture disappear?  It may be because we hesitate to sit and discuss with the senior citizens and their ideas and advice will be very useful for the young people. (They are story tellers.  Hear them, they will be happy and you can learn from their experiences).  

  • Work for senior citizens not only invigorates the workforce through their experience, but also affects society in a broader perspective through health advantages and the income generated for households.  As well, senior citizens work for many reasons, not only having to do with income and this could bring different view points to the modern workforce.

  • Lastly, there are appropriate jobs for them as they are experts on livestock and animal husbandry, fishery, and agriculture.  We can use them as expert facilitators on training programs or simply learn through observation and comparative studies.

Senior citizens have given us so much of their lives, what is our compensation to them?  In this respect, we can get them involved, engaging them in unemployment reduction programs as a source of success stories, trainers, facilitators and innovators especially in agriculture, fishery and livestock.

Keep productive and working though you are old;
Together we develop towards welfare.


Auriza Satifa, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia

In my opinion and based on my experiences, we must take the following steps before planning or designing an unemployment reduction program:

  • Study the region, focusing on its key production sectors and employment composition (ie. Proportional number of farmers, businessmen, officers or laborers).
  • Conduct a survey on the unemployment composition based on educational attainment Eg. The number of unemployed who hold university degrees.
  • Consider the impact of geographical factors on employment outcomes in particular sectors.
  • Consider Acehnese culture and traditional customs (ie. gendered divisions of labour, communal land ownership, financial management roles within families, etc.) For instance, unemployment reduction projects for women might focus on improving their post-harvest skills if these skills are in high demand among women.

It appears that up till now, development practitioners, in their haste to implement projects, have paid inadequate attention to the real needs of people or to ensuring that projects are sustainable in the long term.

Only after completing surveys at a community and government level, can we tailor the most appropriate programs for local government, NGOs, investors and the indigenous people of Aceh and implement the most effective projects.


Ferry Samosir, Oxfam, South Nias, North Sumatera , Indonesia
My name is Ferry Samosir and I am approaching the end of my contract with Oxfam.  Please allow me to respond to this query presenting my personal views.  I agree with the ideas cited in previous responses and would like to provide another practical idea based on my experience dealing with unemployment issues in Aceh.
I once had a discussion with a handicraft producer in Yogyakarta , whose business activities had slowed due to a shortage of material resources and skilled labour.  Despite this, the business had already established a marketing network that guaranteed a certain quota of sales (captive market).  The business produced decorative baskets made from water hyacinth fiber or eceng gondok (a wild plant bearing purple flowers and found floating in ponds and rivers) and grass fibers.  These raw materials, which are widely sought after by domestic and international businesses are an abundant yet under-utilized natural resource in Aceh Barat. The handicraft producer from Yogyakarta is therefore eager to visit Aceh and investigate the possibility of expanding his small industry in the province.
In situations such as these, I think, that production for businesses all over Indonesia could be out-sourced to Aceh.  I use the word “could” to emphasize that this would be a delicate process and businesses should always be mindful of local culture.  But, if we are certain that the market is strong and there is a steady supply of under-utilized resources, the expansion of the small Yogyakarta handicraft business to Aceh may help resolve Aceh’s pressing unemployment problems.

Of course this idea would need to be tested and evaluated.  It would be useful to research small industries in other regions and explore opportunities to establish similar industrial operations in Aceh.

Silva Liem, Consultant, Jakarta , Indonesia

My name is Silva Liem and I am an Independent Consultant working for the World Bank – WSP. I would like to participate in this interesting discussion about employment and the types of programs which will assist –both directly and indirectly – in reducing unemployment. 

Most people tend to agree that formal education, vocational workshops and other occupational trainings can play a key role in addressing unemployment by producing ready-to-work graduates. Yet at the same time, such programs also exacerbate unemployment when graduates fail to fulfill employer expectations.  Still, we must not waste time deliberating this point, but instead, focus on the kinds of programs or activities which might be more appropriate in this ailing world.

I remember when I was assigned to work in Aceh for ILO last year, I was surprised to find a number of "pohon asam" trees – bearing a large quantity of fruits-bordering the streets surrounding Syiah Kuala University (UNSYIAH).  My mind started calculating how much income the trees could generate for people who might collect the fruit.  How much income would this amount to over one year?  How much income would be generated if all pohon asam in Banda Aceh were collected?  Then I started thinking about what we could do with the fruit.  Could we increase its existing value somehow?

Similarly, I remember several years ago, a colleague of mine bought me "oleh-oleh" from Surabaya in East Java .  "Oleh-oleh" is "gula asam", a candy made of seedless buah asam (a type of fruit), formed into a small round shape and coated with white sugar.  I actually ate the sweet as a young girl though I hardly recognized it as it was 2 – 3 times bigger than the candy I ate as a child and was attractively packaged in a decorative plastic container.  It was also more expensive than I remembered it to be, though I don’t recall the exact price.

I am sharing this story because I hope it might inspire the community to take a look around and use our creativity to think about how we can better utilize existing resources and commodities around us.  Let us not preoccupy ourselves with copying existing products and services.  Instead, let us take time to formulate new ideas.  Our young people can play a particularly important role as the next generation of entrepreneurs producing new and innovative products/services.  If we can devise a new and innovative way of using one out of 100 products/services, this is a worthy accomplishment- not merely in terms of the income or number of jobs generated, but perhaps more significantly, by creating a culture which encourages young people to think creatively and resourcefully.

With regards to culture, our senior citizens can play an important role as mentors for our young people and for transmitting values to future generations.  Educating and instilling values is not the sole responsibility of families- it is up to the entire community to instill appropriate codes of behavior and prevent the degeneration of culture.

I realize that this narrative does not directly answer Pak Pandji's query.  Nonetheless, I hope that it may stimulate new ideas which may be broadly applicable.


Kusdijono, Catholic Relief Services, Jakarta , Indonesia

 I recall a technical advisor once stating, ”there is no single solution to any problem”.  This is particularly relevant to Pak Pandji’s query.  In my opinion, this statement applies not only to Aceh, but also to many cities and kabupatens across Indonesia .  Unemployment has now become a national problem, especially in the midst of the current global economic crisis which has had a particularly acute impact on the production sector.  Economists predicted a crisis in 2009, didn’t they? Sure enough, at the close of 2008, many employees across different sectors and organizations were made redundant.

Of course, many provinces and cities/kabupatens across the country have in fact witnessed increased economic development and a decline in unemployment rates over the last few decades.  Unfortunately, I don’t have any statistical data to support this claim, but I did witness these changes first hand at the community level.

In Lampung, local government initiatives to develop public infrastructure precipitated massive changes including an increase in travel to places like Jakarta for business purposes and vice versa.  Since the 1980s many cities in West Java (eg. Bandung , Bekasi and Tangerang) were flooded with industrial investment which opened up opportunities for many workers (including junior and high school graduates) many of whom originated from other provinces.  Similarly, from the 1990s onwards, community based economic development in the form of agricultural and handicraft businesses flourished in places like West Java, Central Java, Yogyakarta, Bali , East and West Nusa Tenggara.  Since early 2000, even east Java became classified as an agro-business province, and imported commodities for distribution to other provinces.  Recently we heard that the governor of Gorontalo also developed a successful corn business in the region.

Based on this experience, it is clear that investment plays a key role in stimulating the economy and generating employment.  Three specific types of investment are relevant here: Education, Infrastructure (public facilities) and Industry and Services.

Investment in education is important this includes both mainstream and vocational education. However I believe that education in Aceh, in the context of post tsunami recovery, is less of an urgent priority than in other provinces across Indonesia .  Investment in infrastructure (roads, bridges, electricity, water and harbors), meanwhile, is crucial and has a direct bearing on productive sectors.  In terms of recovery initiatives to date, infrastructural development (for which government institutions and private sector actors are primarily responsible) is in steady progress and the local government has conducted necessary assessments of existing infrastructure and production capacity.  In this respect, the government may not need to invest further in infrastructure, but merely re-orient infrastructure development priorities according to local needs.

Investment in industry and services can be categorized as either small or large scale as well as public (via government) or private investments.  This sector perhaps more than any other, has suffered the most direct impacts of the global monetary crisis. Based on patterns of economic development in other provinces, it is evident that there are often linkages between market demands, existing resources in a given region and policies that are conducive to investment (eg. availability of legal permits, low taxes, etc.).  Particularly in the case of Aceh, a participatory approach involving multi-stakeholders is also crucial- this requires that relevant parties are able to cast aside self interests and work in cooperative partnership with each other.

Another key question is how to select the appropriate industry and services?  Firstly, stakeholders should conduct an assessment of existing assets and resources in Aceh (refer to Sustainable Livelihood by Chambers: Physical and Infrastructure Assets, Natural Resources, Human and Social Resources, Financing) followed by an evaluation of market opportunities and services at the local, national and international level.  (Please also see: http://www.ids.ac.uk/ids/bookshop/dp/dp296.pdf)

This data could be collected via a multi-stakeholder forum, where the government of Aceh could invite the Chamber of Commerce and other trades associations to collect information about existing markets and services, foster partnerships between investors and the market and design the program in cooperative partnership.  

Agro-business would be a good starting point (including production, processing, distribution and retail), being well known for its high multiplier effects and capacity to generate high levels of employment, including for high school graduates.  The non agricultural industry may also be appropriate, though a concerted effort needs to be made to recruit high school graduates, whom comprise the majority of unemployed persons in Aceh. Local government will also play a key role in stimulating new businesses in the non-agricultural sector.

Overall, based on my experience, agro-business and light industry generates the most employment.

Finally, while I have not yet touched upon social and environment considerations in unemployment strategies, these must also be included in the program design.


Anwar Siregar, Institute of Community Social Studies, North Sumatera, Indonesia

My name is Anwar and I’m from North Sumatra , like many of the other participants in this discussion.  I would like to respond to the query about how to overcome unemployment among men and women of productive ages.

Based on my work experience in North Sumatra , I have concluded that similar patterns of economic development occur in regions that invest in new plantations such as rubber and palm oil.  Analysis has demonstrated that these investments have yielded both positive and negative results.

I would like to focus particularly on how to deal with the rising unemployment problem among young people with no education and with minimal access to land. Relevant stakeholders should invest in crop diversification to produce both raw materials for industry as well as more specialized products in order to open up new employment opportunities for young people.  For example: further local processing for rubber liquid; soap production using the palm oil waste; cattle in the plantation area, etc.

All the while, we should remember that poverty undermines the health and welfare of the population.


Idham Edo, Consultant, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia

My name is Idham Edo and I work on real sector (non-service or financial sectors) and small business development projects at the Bank of Indonesia in Banda Aceh.

I would like to offer my personal suggestions in response to Pandji’s query.

Firstly, I would like to describe the status of Aceh’s economy in 2008.  In general, economic growth up until the third quarter of 2008 remained stable, with no significant increase or decrease in regional income.  In the fourth quarter of 2008, however, the economy slowed.

 The following example may assist in illustrating the current economic situation:

1. Farmers’ income from palm oil, areca and coffee plantations, declined due to the global economic crisis which affected international demand for such commodities.

2. Consumption of goods such as motorbikes and electronics also declined (Motorbike sales fell from 100 to 60 per month, per dealer, which was further exacerbated by credit debts).

This economic crisis will have a direct impact on Aceh’s formal and informal sectors.

While I agree with comments and solutions proposed by other members, I prefer to focus on the development of grass roots-level programs.  One possible solution to Aceh’s unemployment problem is the creation of employment and business opportunities which draw upon Aceh’s local resources in addition to the ideas below:

  • Development of a database mapping out economic activities and business opportunities in Aceh.  This should be regularly updated and publicized via the mass media (eg. leaflets)  to broaden community access to the data.  A survey conducted found that access to information such as this, encourages workers to seize business opportunities.
  • Micro Finance programs which broaden community access to financing.
  • Programs to stimulate the business environment and increase competitive advantage. Rather than relying solely on exports, an effort should be made to stimulate the local market - this includes eliminating (rather than merely reducing) obstacles in the business environment.  

This thinking is in line with my experiences in real sector development in Aceh, and is based on the principle that reducing unemployment requires real sector growth and multi-sectoral support from diverse stakeholders.  

I hope that these ideas will be useful for Pandji and other colleagues in addressing unemployment in Aceh and elsewhere in Indonesia .


Teguh Prasetyo Karyanto, The Jakarta Globe - News, Jakarta , Indonesia

My name is Teguh Prasetyo, and I work as an economic journalist for The Jakarta Globe.

Responding to Pak Pandji’s query, my articles have focused primarily on government efforts to implement more labor intensive development projects through the Investment Coordinating Board - BKPM or The Ministry of Industry. Please see http://thejakartaglobe.com/ and search “Teguh Prasetyo; Unemployment Reduction”, BKPM or IFC to view my story.


Job Charles, International Organization for Migration, Banda Aceh, Nanggroe Aceh Darussalam , Indonesia

From when I was studying agricultural economics I know that the poverty level was around 40% at that time, which was partly caused by the high level of unemployment. Why was there that high level of poverty and unemployment? The causes and reasons are like a vicious cycle. My teacher once explained that the high level of poverty and unemployment in rural areas was due to people being lazy and not being motivated.

For almost 10 years I travelled to the rural regions of Sumatera, Kalimantan and Sulawesi and I found that my teacher’s hypothesis was not entirely true. The communities in the urban areas as well as in the rural areas have been working hard, regardless of the bad weather, to continue their lives. However, what they have achieved is perhaps not obvious as productivity is very low.

We and the local communities worked together to answer why this was the case.  We analysed the problem and identified the following components:
  1. Human Factors
-          Level of education and skills
-          Religious and spiritual values
-          Number of dependants in a family

  1. Physical Factors
-          Availability of life supporting infrastructure
-          Condition of their house
-          Land availability

  1. Social Factors
-          Level of participation
-          Social relationships
-          The state of institutions

  1. Financial Factors
-          Means of income
-          Availability of financial institutions
-          Accessibility to credit

  1. Natural Factors
-          Geographical conditions

By learning together, considering the above factors and created experiments, monitoring concerns, analysis, and then they will make decision on how to overcome the problems related to their hopes and objectives. They then repeated the process as above. This way developed values for continuing their lives.


Zul Ashfi Mendrofa, Canadian Red Cross, Lahewa, Nias, North Sumatera , Indonesia  

Our organization, as part of their project implementation, is constructing more than 2000 houses for earthquake victims in the northern part of Nias. They have been utilizing the manpower of local communities to work as carpenters and labour for material handling.

We expected the experienced carpenters to be involved in the construction activities, but it also allowed the inexperienced carpenters to work and be trained by the more experienced carpenters. This project has created jobs especially for locals who were previously unemployed.  Another point worth noting is the division of work between men and women.  In certain villages the men built the houses while the women took care of the materials (although this was based on individual capabilities).

The jobs created seem temporary as the locals have only been hired for the construction of the houses.  However, the funds that flowed into the villages did provide additional working capital for the local people, especially for those who were previously unemployed and who have been able to utilize their spare time. The workers were paid market-rate salaries so the project has contributed no less than three billion rupiah to 26 villages in 1 ½ years.  Furthermore, the size of this project means it will create future jobs.
 

Sayu Komang, Idep Foundation, Ubud, Bali , Indonesia

In response to Pak Pandji’s query, as he has said, there are many programs and systems that could be implemented, however in the field it is very difficult and takes time.

Over several years, I have visited Aceh numerous times and found that people were not capitalizing on many business opportunities.  It may be that people have no interest or they just have not realized these business opportunities. Small enterprises should cooperate with big national-scale enterprises to capitalize on these opportunities.

The Recycling Center (integrated waste management) is a business where  NGOs, private companies, and government can work together on a program.  Government provides the land, local communities conduct the day to day work, NGOs provide the training and the private companies provide the capital.

This program creates more businesses, both small and large scale and employs many workers.  Business opportunities include: collecting certain types of garbage (plastics, bottles, etc.) and processing them to produce plastic ore and glass materials, processing garbage to produce new products, producing organic waste-based fertilizer, and creating a nursery for plant seeds as requested by NGOs and government for their environmental projects.

As I said in the beginning, it might be easy to design a program but it will take a long time to make it come to fruition.

There is a similar program that has already been developed in Bali . NGOs, private companies and government have been working together implementing the program.  This has now become the main Recycling Center in Bali . (also see: http://www.idepfoundation.org/indonesia/ idep_wastegroup.html)


Many Thanks to all who contributed to this Query!

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