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Indonesia: Further efforts needed to work towards a sustainable and equitable economy

04 April 2013

While the world economy still struggles to recover from the economic crisis, the overall outlook for Indonesia in 2012 was largely positive thanks to the country’s strong focus on the development of economic infrastructure to address constraints to growth as well as robust household consumption and growing investment.

Realizing inclusive and sustainable growth requires further attention to the integration of social and environmental safeguards in its development framework, the International Labour Organization (ILO) says in a new report.

“Employment is an intersection that can bring together economic, social and environmental objectives,” ILO Indonesia country director Peter van Rooij said on Thursday. He made the statement at the launch of the “Labour and Social Trends in Indonesia 2012: Working for a sustainable and equitable economy” report.

He explained that economic activities provided people with livelihoods and also impacted on the environment and climate change – and vice versa.

“A key point here is ensuring that employment is sustainable in the short, medium and long term – which is intricately linked to the use of the environment and the decency of work,” said van Rooij.

The ILO report highlights gains that have been made due to the strong growth performance in recent years. For example, employment growth continues to outpace labour force growth and unemployment, and unemployment is at a low that has not been seen in over fifteen years.

However, the report highlights that deficits in employment quality persist, with over 60% of employed people considered to be “vulnerable workers”. The gap between average minimum wages and average nominal wages continues to narrow over time.

The report analyzes issues of sustainability and equity through looking at environmental, social and economic trends in the labour market.

The report’s author Emma Allen said the Indonesian economy had made strong progress toward its development targets. “However, a challenge is to ensure the inclusiveness of economic growth and the quality of employment, while promoting environmental sustainability and responding to climate change,” she said. 

To read the full report, click here.

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