Growth Of The Labor Intensive Sector Is Considered Decelerating, Indef: There Is A Structure Shift

Illustration of Labor Intensives (Photo: Doc. Antara)

JAKARTA - The growth of the labor-intensive sector is considered to slow down in 2022 when compared to 2019 before the COVID-19 pandemic.

Researcher from the Center of Industry, Trade, and Investment Institute for Development of Economics and Finance (Indef) Ahmad Heri Firdaus said, Indonesia has experienced a shift in structure. Where, the shift in structure or economic share of gross domestic product (GDP) between 2019 and 2022.

"If we look at 2022, our industrial sector has experienced a decline in share from the previous 19.7 percent in 2019, then currently 18.34 percent," Heri said, quoting Antara, Tuesday, February 7.

Heri said the slowdown in labor-intensive sector growth was reflected, among others, in the condition of the industrial sector, which experienced a decline in share while the mining sector experienced a surge in share of Gross Domestic Product (GDP).

He said the growth of labor-intensive sectors was relatively small, even the agricultural and industrial sectors grew under national economic growth.

The industrial, agricultural and trade sectors that have a labor share of 62.2 percent actually grow under other sectors that are caught in labor absorption.

The agricultural sector in 2022 will grow to only 2.29 percent, well below national economic growth. The food crop sector, which is very attached to daily life for public consumption, has also grown relatively small, which is 0.24 percent.

The growth of the tobacco processing industry sub-sector also continues to decline. When compared to direct growth in 2022 towards 2019 before the COVID-19 pandemic, the sector experienced negative growth, namely minus 9.2 percent.

On the other hand, in 2022 there will be a shift in the economic structure according to the business field, where the industrial sector is experiencing a decline in share. On the other hand, the mining sector experienced a surge in GDP share from 7.26 percent in 2019 to 12.22 percent in 2022.

"This mine contributes to the small economy and also the absorption of less labor in the industrial and agricultural sectors. So, if we look closely after this economic recovery, we should talk about how to accelerate, this acceleration can only be achieved if we have strong economic fundamentals and structures," he said.

It is hoped that in the future there will be improvements in the structure and architecture that can accelerate Indonesia's economy, one of which is by increasing the growth of labor-intensive sectors that have a more impact on the economy, especially in terms of employment.