Unemployment Rate of Indonesia Continues to Fall Steadily
Unemployment in Indonesia is expected to fall to 5.7 percent of Indonesia's total labor force at the end of 2013. In 2014, the figure may further decline to 5.1 percent if global and domestic conditions are conducive and if the government can provide sufficient support through job creation. These forecasts were presented by Muhaimin Iskandar, Minister of Manpower and Transmigration. The minister mentioned that each one percent in GDP growth will create more than 350,000 jobs.
With GDP growth of more than six percent annually, it implies more than two million jobs being added to the job market this year. However, it should also be remembered that each year around two million Indonesians enter Indonesia's labor force. Therefore, through a number of programs, the government intends to raise both quantity and quality of Indonesia's labour force.
Indonesia - with a population numbering over 240 million people - contains a large and young population. Around half of the total population is below the age of 30 years. Currently, about 40 percent of the labour force is employed in the agriculture section.
The informal sector (both rural and urban) still plays an exceptionally large role in Indonesia's economy today. Although it is difficult to pinpoint the number exactly, it is estimated that around 60 percent of employment in Indonesia belongs to the informal sector. Around 80 percent of this informal employment is concentrated in the rural areas, particularly in construction and agriculture.
A characteristic of Indonesia is that the unemployment rate is highest for people between the age of 15 and 24, far above the country's national average.
¹ data from February 2013
² absolute numbers
³ % of total Indonesian labour force
Source: Statistics Indonesia