Monitoring, Evaluation and Learning
The system of industrial relations in Indonesia is undergoing a transition from a heavily centralized and government-controlled system, to a more decentralized system where employers and employees negotiate the terms and conditions of employment at the enterprise level. However, many components are still influenced by the paternalistic central government practices of the past.
Indonesia's decentralization reform is now in its third year of implementation. The 'big bang' start marked the transfer of resources -assets, personnel and finances- to the regions to compensate for the added authorities and functions. While the speed and size of the changes to formal structure have been phenomenal, the adjustment of non-formal institutional settings is likely to take a long time.
Infrastructures play a crucial role in economic development and poverty reduction. The economic crisis in 1997-98 severely curtailed the government’s capacity to maintain existing infrastructures, negativelyimpacted the prospects for future economic development and poverty reduction in the country.
This study provides an overview of the concepts used to measure unemployment in Indonesia and their consequences for the measured unemployment trends. One finding shows that BPS’s decision in 2001 to relax the definition of labor force by including discouraged workers has resulted in an artificially high open unemployment rate and disguises the actual decline in traditionally-measured open unemployment rates post-crisis.
In a fast urbanizing Indonesia, the rural sector still plays an important role in the country’s economy. Although declining, the majority of the population still live and find employment in rural areas. However, rural areas lag behind urban areas in many aspects. As a result, around 80% of all the poor in the country are found in rural areas.
