Regions Lack Skilled Workers

Migration to big cities in Indonesia, especially Jakarta, can be curbed with massive investment and bureaucratic improvements in the regions. However, although large investments have been brought in, the lack of available skilled workers is an obstacle for regions. Many opportunities have gone to waste. Therefore, skilled workers need to be prepared in the regions.

The Central Java administration, for example, has asked the people of the province to no longer work in and around Jakarta. They should improve their skills, especially given Central Java's contribution in 2015 equaled 56 percent of Indonesia's total textile investment.

Central Java Governor Ganjar Prabowo on Monday (11/7) at a halal bihalal (post-Idul Fitri gathering) with officials and civil servants at the Central Java Governor's office, said that investment in the textile industry throughout 2015 had been recorded at Rp4.6 trillion (US$350.2 million), with as many as 188 projects.

"With that many projects, the number of workers absorbed could reach over 80,000 people. The investment does not stop, it keeps on flowing. Because of this, residents that have suitable skills for the industry no longer need to migrate to Jakarta. They can work in their own region," he said. Despite such a big opportunity for workers, Ganjar said that it had turned out to be difficult finding skilled workers. For example, a shoe factory in Jepara regency that needed at least 7,000 workers still could not find sufficient suitable employees.

The low absorption rate of local workers, Ganjar added, could be caused by two things. First, a lack of information on the establishment of new industries in the regions, and second, a lack of skilled workers required by factories.

The new jobs that come with the establishment of new industries can help reduce the high rate of urbanization that takes place as travelers return to the cities after Idul Fitri. The number of Central Java residents that work in and around Jakarta is quite high. In fact, it is estimated that 60 percent of homecoming travelers that return to Jakarta and the cities around it are from Central Java.

An acting official for the Central Java Investment Board, Didik Subiyantoro, said that the low absorption of local workers by industries showed that there were only limited numbers of skilled workers available.

He gave an example of a new textile company in Boyolali regency that needed around 5,000 workers but had not found sufficient candidates after six months. "These kinds of things are challenges for formal schools to prepare more graduates educated in the field of textiles at vocational schools [SMK]," Didik said.

Didik said that in Semarang there were only two vocational schools with specializations in fashion that produced graduates ready to work in the textile industry. Meanwhile, work training centers established by regional agencies and state institutions to train skilled workers in the textile industry were not able to produce sufficient graduates.

In Jakarta, Regional Autonomy Implementation Monitoring Committee executive director Robert Endi Jaweng believes that Indonesia's economy was not yet driven by productive investment, but by government consumption and spending.

"Productive investment impacts on job creation. Unfortunately, we find that there is not yet any synergy between the central and regional governments to create conditions that support incoming investors. The efforts of BKPM [Investment Coordinating Board] and the government are only initial steps that have not been followed up by regional administrations," Robert said.

Separately, Center of Reform on Economics Indonesia research director M Faisal said that investment diversification outside Java did not offer many options in terms of business sectors. Furthermore, natural commodities, which had received the most investment, were now seeing a decline in prices.

Legal threats

The Surabaya administration, East Java, has threatened to file charges against beggars returning to Surabaya despite having been returned to their region of origin.

Tangerang's deputy mayor, Sachrudin, has asked migrants looking for jobs in Tangerang to have skills and not just blind courage.

Bogor Mayor Bima Arya Sugiarto said that between Idul Fitri and the end of December 2015, the city had recorded 1,216 newcomers, while the population growth rate was 3.10 percent per year.

According to Tangerang Civil Registrar and Demography Agency head Erlan Rusnarlan, every day there were 75 to 100 people applying for new identity cards (KTP).

Depok Civil Registrar and Demography Agency head M Iqbal said that the number of migrants to the city was between 4 to 5 percent of the total population of 1.6 million people.

source Kompas, Tuesday, July 12, 2016

Behind the Post-'Mudik' Migration

In the era of President Joko Widodo, we hear a number of interesting slogans, such as the maritime axis, Nawa Cita, Trisakti and building from the suburbs.

After Lebaran (the celebration of Idul Fitri, which is marked by mudik, an annual exodus by Jakartans to their hometowns), this last topic is relevant. Moreover, in this newspaper on Monday (11/6), we read that the program to build from the suburbs, from regions and villages, has not shown positive results. This is demonstrated by the high rate of migration from rural to urban areas.

The discouraging thing is that the government has poured a lot of funds into driving regional development. Regional transfer funds and village funds total Rp770 trillion (US$58.8 billion) of the total state budget of Rp2 quadrillion.

This year, the number of residents migrating to Jakarta and its surrounding cities, namely Bogor, Depok, Tangerang and Bekasi, is forecast to reach in excess of 181,000 people. Specifically for Jakarta, this will amount to 70,000 people. This is an increase over the previous five years, for which the average annual number of newcomers was 58,000 people.

The migration option is taken because people want to get jobs. A resident of Kediri, East Java, who works as a construction worker, chose to move to Jakarta because incomes in the regions were very small. Another resident from Muara Enim, South Sumatra, wanted to move to Jakarta because it was difficult to find work in his own region. Jakarta, which is frequently stated as the place where 60 percent of economy and finance circulates in the country, still exudes charm, calling like a magnet, following the maxim "when there is sugar, there are ants".

As stated by an expert in population economics from the economy and business faculty of the University of Indonesia, Sonny HB Harmadi, the rate of migration to the capital gives Greater Jakarta an increasingly heavy burden to bear. Apart from having to provide more jobs, other burdens are providing shelter and public facilities. Looking at the general economic condition, which has not yet improved, there is a risk that the dream of work in Jakarta will not materialize, while a negative impact is the rise in crimes. Another risk is the growth of unregulated settlement areas.

Related to this topic, there are at least two matters worth considering. We hear, along with mudik, there is also a flow of funds from the travelers to their hometowns. We need to encourage them not to spend all their money for consumptive purposes. Some of this should be used for investment, developing a spirit of entrepreneurship in the regions.

Second, executive director of the monitoring committee for the implementation of regional autonomy, Robert Endi Jaweng, drew attention to the fact that despite funds being channeled to the regions, there was no accompanying mechanism for control and assessment. There were no sanctions if regional governments failed to utilize the funds properly, or their economic growth targets were not reached.

The success of building from the suburbs will help reduce the rate of the migration and reduce the burden on Greater Jakarta.

Source Kompas, Tuesday, July 12, 2016

Economic Reflection From the Lebaran Celebration

The lively annual celebration of Idul Fitri is back again. Almost all villagers welcome the great days with enthusiasm and joy. The Lebaran celebrations cannot be separated from the homecoming tradition, or "mudik", in most parts of the country.

The phenomenon of people traveling from the cities to their home villages is understandable, because economic development in Indonesia is still concentrated in big cities, especially in Java. As a result, there are massive migration flows from areas that are still economically untapped to cities.

The lure of the big city that promises a variety of facilities and huge economic incentives has become a magnet for workers with a good level of education, skills or expertise. Given this situation, hardly any young workers want to stay in their villages.

It is interesting to note that the traditional mudik still continues and appears to be unaffected by the changing times. The rapid progress in telecommunications has not deterred people from heading home for Idul Fitri. In fact, modern technology now allows for communication not only by telephone but also by email, or even by video streaming. However, the desire to meet in person and see ones relatives face-to-face outweighs the challenges of going home. High transportation costs and heavy traffic congestion are unable to discourage the people from their homecoming romances.

From this phenomenon, we can infer that in migration there is a trade-off between economic considerations and strong socio-cultural aspects. It can be concluded that if there were economic alternatives, migration could become the least-preferred option for many people.

The migration of workers with good educational backgrounds and high skills contributes to the widening development gap, dimming hopes of expediting structural economic transformation in regions and villages.

In fact, even regions blessed with abundant natural resources are abandoned by productive workers. As a result, many potential resources waiting to be developed lie idle and neglected.

The high conversion of agricultural land is caused by a lack of economic incentives in the agricultural business. It is also caused by low productivity amid an absence of modern technology and quality seeds. Post-harvest technology is also limited.

In fact, the village has tremendous potential resources for horticulture, animal husbandry, fisheries and other marine production. If rural areas could be developed into food and horticulture production centers, then a great variety of food and beverage businesses would become the economic backbone of the regions.

Certainty on demand could become an economic incentive for farmers, as well as certainty on prices, especially during harvest time. Moreover, investment into adequate logistic systems could reduce the risk of fruits and vegetables rotting. The availability of a variety of vegetables and fresh fruit from rural areascould ensure that demand from restaurants and hotels is met by domestic production, reducing dependence on imported supplies.

If cattle farming could flourish, not just could the meat shortage be overcome, but also the reliance on imported milk and leather for the footwear industry could be reduced. Moreover, the commitment to promote downstream industries in palm oil, rubber, cocoa and other agricultural productioncould be materialized.

To support such activities, the government only needs to provide basic infrastructure and facilitate investment in rural areas. Each region will not only have added value, but also be capable of exporting manufactured products of high competitiveness. More jobs could be created, imports reduced, and exports expanded.

The momentum of the homecoming traditional could be used to lessen the development gap between urban and rural areas. This could happen if migrants or urban dwellers that have become successful in major cities became aware of and could exploit a wide range of business prospects in their home towns. It could start with them investing in productive activities in their respective hometowns.

If such efforts could be carried out intensively, this could attract larger investors to invest massively in agriculture and rural areas. In addition, it would also provide awareness that investment in this sector will be much more sustainable than investment in the property sector.

 

This could be realized if the mudik was not only seen as a romantic tradition but instead be regarded an effort to realize the love of the homeland in more concrete ways. One of these would be for people to develop the economic potential of their respective villages. At least it couldstart with a small step by buying local products as a form of support for the economic empowerment of the region. The expectation is that equitable development can promote welfare across the country. Happy homecoming!

 

by Eny Sri Hartati

source Kompas, Monday, July 4, 2016