Dark Skies Ahead for Jokowi's economy : Experts
The future economic team of newly inaugurated President Jokowi and Vice President Ma'ruf Amin will face several challenges ahead as industries falter, trade deteriorates and a skills gap amid rising automation threatens job growth, economist have said. Jokowi's team need to create efficient policies, citing manufacturings as an example of a sector that required change.
The manufacturing sector's contribution to the country's GDP fell to 19.52 percent in the second quarter from 20 percent in the first 3 month of the year, as the sector only grew 3.5 percent annually, below the all economic growth target of 5 percent and marking the sector's lowest figure since the second quarter of 2017, according to BPS data. Meanwhile, national exports dropped 5.74 percent yoy in September to US$14.1 billion, marking 11 consecutive months of yoy declines, BPS reported. Imports, meanwhile, were down 2.41 percent yoy in September at $14.2 billion, resulting in a trade deficit of $160 million.
CORE Indonesia research director Piter Abdullah believed the government's lack of focus on industrial development was the reason for the decline in the manufacturing sector's contribution to country's GDP, which was nearly 30 percent back in 2002. Beside, there is another problem such as skills gap issue amid the rising popularity of automation and machine learning. The Automation and the Future of Work in Indonesia study published by management consultancy McKinsey and Company projects that 23 million jobs could be displaced by automation by 2030, but 27 million to 46 million new jobs could be created in the same period. That would result in 23 million more jobs created, 10 million of which would be new types of work.
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