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Indonesia must focus on formal sector amid app-based services hike
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A driver of GrabBike, a direct competitor of the motorcycle taxi app Go-Jek, rides with a customer through traffic in Jakarta, April 29. (AP/Tatan Syuflana)
D
espite ride-hailing apps such as Gojek, Grab, and Uber helping to reduce the unemployment rate, the government should focus on creating formal sector-based industrialization next year, an economic watchdog has said.
According to the Center for Reform on Economics (CORE), most of the jobs created this year were informal jobs including app-based transportation drivers, meaning that the government remains too slow in boosting industrialization.
"Informal jobs are not stable and the income is also irregular, Indonesia must create more formal jobs," CORE executive director Mohammad Faisal said on Tuesday during a media briefing in Jakarta.
(Read also: App-based transport services get green light)
Data from Central Statistics Agency (BPS) states the unemployment rate in August decreased by 57 basis points (bps) to 5.61 percent. The agency also recorded 500,000 new jobs created in the transportation sector as a result of ride-hailing app services.
Faisal added that despite a lot of investment being recorded the unemployment rate was not significantly reduced because most of the businesses were not in labor-intensive industries.
"Moreover, we still have cases like illegal foreign workers in the workplace," he said. (dan)
