YOUTH UNEMPLOYMENT are in paid work.

Of those, a third are employed in

HAUNTS INDONESIA agriculture and 40 percent in trade, restaurants and
Michele Ford

Graduation from university should be a

hotels or in community, social and personal
joyful and exciting occasion. But for many young
services. These sectors are dominated by informal
Indonesians it is an anxious time. Some 27% of
employment.
university graduates join the ranks of the
Partly, too, it's about the unevenness of the
unemployed, a higher percentage than in any other
economy. There is a big difference between the
group under the age of 24. And when they do get
levels of industrialization on Java compared to that
work, many end up in positions unrelated to their
on other islands. Eastern Indonesia is particularly
field of study.
underdeveloped and poor.
Those with university degrees are of course
Things are not great in the urban centers
by no means the worst off.
either. Good jobs are generally found in the cities.
While high school graduates are less likely
But the labor market has failed to keep up with
than university graduates to be unemployed, they
rapid urbanization, and youth unemployment rates
are 18 times more likely to end up in the informal
are actually higher in urban areas, particularly in
sector. The failure to find work in the formal sector
industrial and commercial heartlands around
can have serious consequences for young people's
Jakarta.
well-being.
There are also intractable problems with the
The informal sector can be very unstable.
education system. The qualifications of workers in
And, until recently, informal sector workers had no
Indonesia are much lower than in Singapore,
access to health insurance schemes or any other
Malaysia and the Philippines. Around 70% of
kind of social security. To make matters worse, a
workers have a primary school education or less.
considerable proportion of young Indonesian
The quality of education is also an issue.
workers are chronically underemployed.
There are some excellent schools in Indonesia, but
In total, there are 42.5 million Indonesians
on the whole, educational outcomes are poor.
aged between 15 and 24. Over 30% of them are
There are still schools without electricity or running
not in education, training or a job.
water even on the fringes of provincial capital cities.
According to the International Labour
Things are considerably harder in isolated regions.
Organization, youth unemployment is a triple hit. It
In recognition of this, Indonesia now spends
not only represents a loss of economic
20% of its total annual budget on education. There
opportunities for the individual and the nation, it
have been attempts at curriculum reform. Efforts
creates psychological problems for unemployed
have also been made to improve wages and
young people and social problems for their
working conditions for teachers, and to encourage
communities.
them to engage in professional development.
Indonesia is not an insignificant country. It is
However, serious issues remain. A World
the 19th largest economy in the world, and by far
Bank Employer Skill Survey suggests that fewer
the largest economy in Southeast Asia. And it isn't
than 10% of employers consider the skills of school
particularly poor.
leavers to be 'very good'. Five times as many rate
After recovering from the Asian Financial
them as 'poor' or 'very poor'.
Crisis of 1997-98, Indonesia enjoyed healthy rates
The Indonesian governments is trying to
of growth, averaging between 4.5 percent and 6.5
address these problems, working to keep students
percent per annum over the last decade. Yet youth
in school longer and improve their skills level,
unemployment remains considerably higher there
especially in the vocational education sector.
than in any other key Southeast Asian country,
There have also been efforts to improve the
including Malaysia, Thailand and Vietnam.
international competitiveness of Indonesia's tertiary
There are several reasons for this
education sector, though the system has a long
mismatch.
way to go if it is to produce large numbers of truly
Partly it's about the informal sector.
job-ready graduates.
Indonesia has a working-age population of around
180 million people, just over 118 million of whom
 These issues need to be addressed, both
for the well-being of Indonesia's young people and
for the nation's economic and social future.