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Last year`s high growth, but unemployment rate still high
uusjio | February 24, 2008 at 07:35 pmby
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Industry Minister Fahmi Idris said recently the country`s industrial growth rate in 2007 dropped slightly to 5.15 percent from 5.27 percent a year earlier, well below the government-set target of 7.9 percent and the prognosis of 6.31 percent.
"The 2007 industrial growth rate did not meet the target nor the prognosis because the industrial sector came under heavy pressures," he said at a recent working meeting with members of the the House of Representatives (DPR)`s Commission IV.
The pressures on the industrial sector were the result of the global oil and agricultural product price hikes, he said.
The agricultural products that had risen in price included wheat, soybean, maize, diary products and crude palm oil.
Last year, there were two industrial groups that experienced negative growth. The first group was textiles, leather products and shoe industries which grew minus 3.68 percent, and the second was wooden and forestry product industries which slowed to minus 1.74 percent.
Beverage and tobacco industries grew 5.05 percent in 2007, declining from 7.22 percent the year before.
The transportation, machinery and equipment industries meanwhile enjoyed a significant growth of 9.73 percent, while paper and printed goods industries grew 5.79 percent.
Other industries which recorded positive growth were fertilizer, chemical and rubber goods at 5.69 percent; cement and non-metal mining products at 3.4 percent; and basic metal, and iron at 1.69 percent.
Economist M Chatib Basri said the manufacturing sector would not grow at a higher pace so long as fundamental issues related to labour rules, infrastructure facilities, and availability of energy were not overcome.
The country`s unemployment rate fell to 9.1 percent in August 2007 from 9.8 percent in the previous survey in February 2007 thanks to its strong economic growth.
However, the drop was still far from expectation. The government has set itself a target of reducing the jobless rate to 5.1 percent by 2009 when the country will hold presidential elections.
BPS Chief Rusman Heriawan said the current economic growth rate was still unable to create adequate job opportunities for jobless people.
He said the number of jobseekers in the world`s fourth most populous nation grew by an average of 2.5 million in each of the past five years. "Every one percent of economic growth currently creates only 180,000 jobs, well below the minimum need of 400,000 jobs."
Most of the jobseekers were employed in the nonformal sector like street vendors, he said.
Observers say Indonesia needs to expand its economy by at least 6 percent a year to significantly improve its employment outlook.
The economy grew by 6.32 percent last year, picking up from 5.5 percent a year earlier and slightly exceeding the government-set target of 6.3 percent.
The government has set the economic growth rate target of 6.8 percent for this year. But ...