INDONESIAS ACHILLES HEEL IN THE FIRST DECADE OF THE 2000s: EMPLOYMENT AND LABOUR PRODUCTIVITY IN MANUFACTURING

Chris Maning

Abstract

In Indonesia, sluggish growth in productivity and job creation in manufacturing was
particularly disappointing in the first decade of the 2000s. The work of Anne Booth has
grappled with the nexus between productivity, employment and welfare in Indonesia
and Asia. While she has been especially concerned with these relationships in the
agricultural sector, Anne would be the first to acknowledge that some of the key
relationships cut across sectors. Further, the benefits from agricultural reforms can
only be broadly realized in terms of poverty reduction if better jobs are available
for agricultural workers to move into in manufacturing and services as countries
develop. This article takes up some of the productivity and employment relationships
outside agriculture that are critical to poverty alleviation, focusing especially on labour
regulations, contracts and management systems. It thus touches indirectly on a subject
that has been a focus of many of Anne Booths writings on Indonesia since the 1980s.
Keywords: Labour productivity, Labour regulations, Job creation, Manufacturing,

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