Unemployment and Poverty: Greatest Issues in 2007
Friday, 05 January, 2007 | 12:12 WIB

TEMPO Interactive, Jakarta: The International Monetary Fund (IMF) has said that alleviating unemployment and poverty will be the greatest challenge for Indonesia's economic development this year.

Head of the IMF Representation in Indonesia, Stephen Schwartz, said that the prospect of the Indonesian economy in 2007 will be good enough. Although there will still be an external risk, all indicators of the Indonesian economy show promising improvement.

The index of consumer confidence, business, or prediction over sales of automotive products will increase. However, according to him, the greatest challenge will be how all these positive trends can be realized by relieving the high unemployment and poverty rates. “The possibility of high economic growth in the future must be in line with the creation of work opportunity,” he said yesterday (01/04) in Jakarta. For the time being, the poverty rate is 17.8 percent, or about 40 million people.

Therefore, he suggested that Indonesia carries out a deregulation of the employment market by making the market more flexible. “It will enable more workers to be absorbed.”

As for poverty, he agreed with the World Bank that the food issue, especially the rise of the rice price, has the potential of causing the poverty rate to increase. Therefore, he said, the Indonesian government must guarantee price stability and enough rice supply.

AGUS SUPRIYANTO