There Are 17 Million Unemployment in Indonesia Because of COVID-19

JAKARTA - The Investment Coordinating Board (BKPM) estimates that at least 17 million new jobs will be needed to absorb unemployed workers due to the COVID-19 pandemic. The number consists of laid-off employees, as well as a new workforce.

BKPM head Bahlil Lahadalia said the COVID-19 pandemic had caused 8 million people to lose their jobs. Plus, there is a new workforce that reached 2.5 million each year. Meanwhile, the rest are laid-off employees.

"Then around 16 million to 17 million people are now ready to look for work. In this position, all countries will encourage investment. It is the door to increase employment," he said in a virtual discussion, Tuesday, August 4.

So far, domestic economic growth has been driven by three economic segments. Namely, domestic consumption, investment, and Micro, Small and Medium Enterprises (MSMEs).

According to Bahlil, international trade or export import's effect isn't too significant on economic growth. However, the sectors that had been the backbone of the national economy were being hit by the COVID-19 pandemic.

"If we talk about household consumption, it must be related to the certainty of income. The end investment is about employment," he said.

According to Bahlil, the government is trying to create 17 million new jobs by balancing the realization of investment in Java and outside Java. In addition, the investment must also be qualified and provide added value.

"Realization of investment in the first semester was around 48% outside Java. While in Java it was approximately 52%. This means that investments have already begun to spread evenly," he said.

Bahlil also said BKPM didn't choose the type of investment that came in. As long as it's in accordance with government requirements, and was able to create jobs for the Indonesian population.

"So, we were picky. But now, amid the COVID-19 pandemic, the important thing is an investment in, so jobs can be created. The formula for 17 million must be really able to (work)," he explained.

On the same occasion, Minister of Industry Agus Gumiwang Kartasasmita, said the ministry sought to reduce unemployment during the pandemic by providing policies for manufacturing industries to continue operating.

But, companies that have permission to operate must apply very strict health protocols. However, it cannot be denied that the policy has drawn a lot of criticism. It has the potential to become a place of transmission of the virus.

Then, in terms of increasing productivity, the Ministry of Industry has also provided some stimulus for the manufacturing industry. Among them is reducing the price of industrial gas by US$ 6 per million British thermal units (MMBTU) and providing electricity costs based on hours of use.

"This is the government's effort to help industries whose main problem is cash flow," he said.