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
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
9.
Job Charles, International
Organization for Migration, Banda Aceh, Nanggroe Aceh Darussalam , 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
http://www.humanitarianinfo.org/sumatra/reliefrecovery/livelihood/docs/doc/inforesources/HelpAge-ReportExecutiveSummary-Bahasa.pdf
(PDF, Size: 95 KB)
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
+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.
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
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.
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
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
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.
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.
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.
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.
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.
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.
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
.
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:
- Human Factors
-
Level of education and skills
-
Religious and spiritual values
-
Number of dependants in a family
- Physical Factors
-
Availability of life supporting infrastructure
-
Condition of their house
-
Land availability
- Social Factors
-
Level of participation
-
Social relationships
-
The state of institutions
- Financial Factors
-
Means of income
-
Availability of financial institutions
-
Accessibility to credit
- 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.
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.
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!
If you have further information to
share on this topic, please send it to Solution Exchange for the Economic
Development Community at thamrincare@yahoo.co.id with
the subject heading “Re: [se-ecdv-id] Query: Programmes to Reduce Unemployment
– Experiences. Additional Reply.”
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