Trade and employment in services: the case of Indonesia
This study examines the importance of the services sector and its linkages with other sectors in terms of value-added and employment from the national accounts, trade and labour force data and the input-output data as well as associated government policies for employment in Indonesia. It focuses on international trade and investment in services, international migration, and policies affecting employment in service sector trade agreements (especially in Mode 4, which is on the movement of ‘natural’ persons).
Highlighted the growth of the middle class over the past decade as critical for expanding domestic demand for services. International demand, on the other hand is especially linked to tourism, transport and business services, as well migration of Indonesia workers abroad. The increased supply of educated manpower is one factor contributing to the growth in employment in services. At the same time, this report has stressed low quality of schooling at both basic and advanced levels as one major constraint to export of services, as well as out-migration of formal sector employees and professionals abroad.