Indonesia spreads across a chain of thousands of islands. Since the overthrow of General Suharto and after the economic crisis in 1997-1998, democracy has consolidated and the country has maintained stable economic growth (6.1 per cent in 2010).

The population of 240 million (2010) is young, and employment has not kept up with population growth. The main industries include oil and natural gas, textiles and clothing, construction materials, chemical products and tourism.

Social indicators have improved although challenges remain ahead. Infant deaths and maternal mortality remain high. Poverty reduction has been rapid, although levels still remain high in parts of the country. The prevalence of HIV/AIDS is growing at one of the fastest rates in Asia.

Strong domestic consumption and a rapidly implemented government stimulus package cushioned Indonesia from the worst effects of the economic crisis that started in 2008. Nonetheless, economic growth dipped and many people lost jobs.

Decent work and labour market issues

Labour and employment issues are at the top of the development agenda in Indonesia as central elements to poverty reduction and sustained development.

Labour market reforms under the consolidating democracy have improved the legal framework and the government has made efforts to improve welfare and social dialogue through a reformed social security system and new legislation.

More women are participating in politics and management and the gender wage gap is narrowing in some sectors.

Job creation is still vital to tackle unemployment and underemployment. Women and young people are particularly affected by these problems, as well as those living in conflict and crisis affected areas.

Vulnerable workers are at risk of exploitation and child labour and forced labour are still issues of major concern. The number of working children remains high. The four million documented Indonesian migrant workers in search of opportunities abroad need protection from trafficking and other forms of exploitation.

Decent work into national policies

With a capita GDP of $2,946 reached in 2010, Indonesia has a long-term development plan from 2005 to 2025 – divided in five medium-term plans –aimed at building a self-sustaining, just and wealthy nation. The National Midterm Development Plan (2010-2014) is currently running and has identified eleven priority areas to ensure equitable and sustainable development. These include focus on governance, competitiveness, infrastructure development, education and health as well as science and innovation. Labour intensive investment is highlighted as a tool to stimulate long-term development.

The Government, Trade Unions and Employment Organizations have developed a number of policy documents with the ILO to implement the Decent Work Agenda. The Decent Work Country Programme and the Indonesian Jobs Pact have identified the following priorities:

i)Creating employment and increasing labour productivity for poverty reduction and livelihoods recovery

ii)Social dialogue for economic growth and principles and rights at work

iii)Extending social security and stopping exploitation at work

These DWCP priorities also contribute towards the United Nations Partnership for Development Framework (UNPDF).

National partners


Further reading