Talking Points at the Joint Celebration of the 70th Anniversary of the United Nations and the Republic of Indonesia: “United Nations Day 2015: Celebrating 70 Years of Working Together”
By Francesco d'Ovidio, Director of ILO for Indonesia and Timor-Leste at Joint Celebration of the 70th Anniversary of the United Nations and the Republic of Indonesia: “United Nations Day 2015: Celebrating 70 Years of Working Together”, 10 November
A grim picture of job crisis continues, 600 million jobs (40 million per year) to be created by 2030 (based on /global/topics/sdg-2030/lang--en/index.htm)
90 percent of jobs are created by private sector, development of sustainable enterprises are the engine of job creation.
Almost 202 million people were unemployed in 2013 around the world, an increase of almost 5 million compared with the year before. The bulk of the increase in global unemployment is in the East Asia and South Asia regions, which together represent more than 45 percent of additional jobseekers.
Vulnerable employment – that is, either self-employed or work by contributing family workers – accounts for almost 48 percent of total employment. Significantly higher informality rates reach up to 90 percent of total employment. Even though progress in reducing poverty has been strongest in the regions, the lack of formal employment opportunities is likely to constitute a barrier to a sustainable further reduction in poverty.
Labour force in Indonesia 122 million, overall unemployment is 7.6 million (unemployment rate is 6.2 per cent
Indonesia’s labour marker has continued to expand in 2014 and 2015, with employment growing and unemployment declining. Unemployment has been trending downwards in recent years, and was below 6 per cent in 2015.
Youth: Indonesia has a demographic bonus of having a large youth population as productive workforce. Currently their potential is not being properly utilised. Youth account of 50 percent of “unemployed”, most of them have never worked before.
Growing inequality: The Gini Index, which measures the degree of inequality of distribution of family income, was 0.32 in 2004, but rose to 0.41 in 2013 and stayed at the same level until today.
While minimum wages have been increasing, growth in average wages has been slower and over time the gap between average minimum wages and average wages has narrowed. For example, in 2001 the simple average minimum wages for Indonesia was 58.5 per cent of the national average wages and by August 2014 this ration had increased to 76.5 percent.
Minimum wages fixing tends to “crowd out” wage fixing through collective ebargaining. This can constrain genuine bargaining and weaken unions, and hamper attempts to genuinely link wages and productivity. This may undermine enterprises efficiency in the medium and long term.
Indonesia needs more jobs – decent and sustainable jobs – one of the solution would be to create and promote sustainable enterprises
Indonesia has ratified all 8 ILO core conventions covering fundamental principles and rights at work and 11 other ILO Conventions, and its national laws largely reflect these commitments. However, there remain important gaps in the national framework and challenges in the implementation that need to be addressed.
Some Basic employment and enterprise data (2015)
Labour force: 122,4 million
Total employment: 114,8 million
Total unemployment: 7.6 million
Labour force participation rate: 65.8 per cent
Unemployment rate: 6.2 per cent
Enterprise information 2013
Small medium enterprises: 3,418,957 employing 9,734,111 people
Large medium enterprises: 23,698 employing 5,004,912 people
Three pillars of ILO Approach to Sustainable enterprises
Creating enabling environment for sustainable enterprises and employment to encourage investment and entrepreneurship that balance the needs and interests of the enterprise (both workers and employers).
Entrepreneurship and business development by helping entrepreneurs including special targets like youth and women to start and build successful enterprises and to connect enterprise to local and global values chains.
Sustainable and responsible workplaces by linking productivity improvements to better working conditions, good industrial relations and good environmental practices, including promoting social dialogue and collective bargaining, increase wages and shared benefits and good governance and responsible business practices.
Better Work Indonesia
Better Work Indonesia (BWI) is a partnership between the ILO and the International Finance Corporation (IFC). The programme aims to improve compliance with labour standards and promote competitiveness in global supply chains. Better Work focuses on scalable and sustainable solutions, through strengthening cooperation between governments, employers’ and workers’ organisations and international buyers.
151 factories registered with BWI, located in Greater area of Jakarta, West Java, Central Java and Yogyakarta provinces.
22 major international buyers registered with BWI
Reaching 245,000 workers.
Conducted trainings on supervisory skills for over 600 supervisors from 22 factories.
Launched in July 2010, the SCORE Indonesia programme is designed to help small medium enterprises (SMEs) in Indonesia to boost quality and productivity, improve working conditions, reduce environmental footprints and strengthen collaboration and communication between employers and workers. It helps enterprises to be more competitive in global markets, thereby creating jobs.
Funded by the Swiss State Secretariat for Economic Affairs (SECO) and the Norwegian Agency for Development (NORAD), the SCORE programme is supported and implemented by the Ministry of Manpower, Indonesian Employers’ Association (Apindo), national trade union confederations and the Dharma Bhakti Astra Foundation.
127 companies registered as participating enterprises of SCORE Indonesia, 60 active instructors; 303 managers (38 per cent) and 492 workers (62 per cent) trained. Around 38 per cent from total managers and workers are female
Five SCORE participating SMEs from Jakarta, Central Java and South East Sulawesi in 2011 and from Lampung & South Sulawesi in 2013, won the “Parama Karya Award” the Indonesia highest Productivity Achievement Award (2012 and 2014).
SCORE methodology and Modules has been put in the Basic Curriculum for New National Productivity instructors training at the National Productivity Training Centre (2012-current).