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11 - Labour Market Developments in the Jokowi Years’

Published online by Cambridge University Press:  16 May 2019

Chris Manning
Affiliation:
Honorary Associate Professor, Arndt-Corden Department of Economics, Crawford School of Public Policy, ANU College of Asia and the Pacific, Australian National University, Canberra.
Devanto Pratomo
Affiliation:
Senior Lecturer at the Faculty of Economics and Business, Brawijaya University, Malang.
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Summary

INTRODUCTION

In 2014, President Joko “Jokowi” Widodo took office with strong nationalist party credentials. He is also the first president with significant and successful business experience. It is an unusual combination of a nationalist inclination combined with a pragmatic approach that focuses on action and results more than programmes and planning. Both these characteristics suggest an approach that is different from that of his predecessor Susilo Bambang Yudhoyono (SBY) in regard to social issues and the labour market.

Like Yudhoyono, Jokowi has strongly supported agriculture and food self-sufficiency, as well as self-reliance in the public documents that set out his five-year term plans and policy directions. The country's overall economic policy framework has not undergone a dramatic change in focus under Jokowi — continuities are especially evident in regard to macroeconomic policies. But microeconomic reform has emerged as a priority. Simplification of administrative processes and concrete reform packages across a wide range of areas of the economy have quickly become a hallmark of his presidency. Jokowi has been more wedded to the nuts and bolts of microeconomic reform than Yudhoyono. This bodes well for employment and skills.

When it comes to labour market issues, Jokowi's approach has emphasized combining fair wages with greater business certainty to make sure sufficient better jobs are created. In the policy domain, he has been assisted by the Minister of Manpower, Hanif Dhakiri, who has also been pragmatic and committed to labour reforms in contrast to several predecessors in this position. In areas like international migration, Jokowi reaffirmed the government's strong commitment to improve labour standards. On the ground, there was a major shake-up as his cabinet sought to promote more investment (and hence more jobs) and improved living standards for working families. Emphasis has been on programmes that raise the productivity and skills of workers, which fits well with the president's private sector background. With some modifications, most programmes oriented directly towards poverty alleviation — a hallmark of the Yudhoyono era — have continued. But like in other areas of public policy, the sheer volume of policy initiatives has not always been backed up with institutional arrangements that ensure effective implementation.

Type
Chapter
Information
The Indonesian Economy in Transition
Policy Challenges in the Jokowi Era and Beyond
, pp. 289 - 317
Publisher: ISEAS–Yusof Ishak Institute
Print publication year: 2019

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