INDONESIA. Implementing Public TVET Programs in the Midst of the Financial Crisis - HRD Policies in Collaboration with Employment Security

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1 INDONESIA Implementing Public TVET Programs in the Midst of the Financial Crisis - HRD Policies in Collaboration with Employment Security (Agnes Retno Dwidarsih Yosephine Pranolo) A. Employment Condition and Economic Growth As a developing country with a population of about 225 million people in Indonesia, the condition can be categorized as Intensive Labor Supply. Amount of labor or Working Age Population of the population aged 15 years and over was estimated about 180 million. When viewed from the terms of the qualification is still dominated by the educated workforce elementary school as shown in a table below. Education Level Man Woman Man Woman Elementary School Junior High School Senior High School Academy/Diploma University Amount The amount of labor force in February 2009 is estimated to reach a total of 113, 74 people. While the amount working population is estimated at 104, 49 million, increased by 1.94 million people compared to the year The unemployment rate reached approximately 8, 14% and has decreased when compared with the year 2008 the unemployment rate which reached approximately 8, 46%. Although the unemployment rate has decreased but it s still considered the 1

2 unemployment rate is still relatively high. This is due to the narrowing of employment caused by the global crisis. Indonesia's economic growth rate is measured by the growth of Gross Domestic Product (GDP). GDP during the second quarter of 2009 is increased by 4.2% from the year Economic growth occurred in all sectors, 3 sectors that experiencing the highest growth are electricity, gas and water supply sector, transport and communications sector, and the agricultural sector. The Government will continue to increase the rate of economic growth, in the period targeted economic growth will reach at least 7% while the unemployment rate will continue to reduce below than 6%. Based on the survey in some big provinces in Indonesia, with the economic growth of 7% still have a big chance employment opportunities in various sectors there are agriculture, trade and processing industries. While the small absorption sectors are financial sector, and electricity-gas-water. B. Global Crisis Impact on Employment in Indonesia The global economic crisis that originated from the financial crisis in the United States significantly affects the employment sector in Indonesia. Some industry sectors directly affected from the crisis which meant there are the field of textile, automotive. The entrepreneurs who directly affected by the economic crisis has reduced the amount of production, lay off some employees or termination of employment. Government data shows that until mid-november 2008 recorded 12,600 workers formally requested to lay off some employment by a number of corporate. However, the real number is only a fraction of the actual layoff numbers. The fact is many companies do lay-offs without official 2

3 government channels as well as companies lay off employees without any certainty when he/she will be employed again. The global economic crisis has a direct impact on the welfare of society or the rise in poverty, the decline in purchasing power due to rising prices of goods and caused by a Termination of Employment. Increasing poverty is felt in communities in urban than in rural areas. Termination of employment may occur because of reduced orders from abroad (export capacity reduction), increased production costs up to 25%, especially in export-oriented industries (such as agricultural commodities, forestry, handicrafts, textiles and textile products, electronics, furniture, etc). Major termination and unemployment are many happened in some of big provinces such as North Sumatra, Lampung, Banten, DKI Jakarta, West Java, Central Java, East Java, South Sulawesi and South Kalimantan. In some provinces, the impact of the global financial crisis experienced in macro partly because of the increased deportation of migrant workers who work abroad in the formal and informal sectors that influence the increasing number of domestic unemployment. Data reported in the Directorate General of Industrial Relations Department of Manpower and Transmigration RI indicates that up to August 2009 the number of workers that affected termination of employment for 65,200 people and which has lay-off amount 27,560 people. C. Employment Policies Employment is one of the multidimensional fields of development that consist of social dimension of culture, economy and politics. Article 4 of Law No. 13 of 2003 concerning Manpower mandate that manpower development goals are: 3

4 1. Empowering and developing labor optimally; 2. Establishing equal opportunity employment and labor supply in accordance with the needs of national and regional development; 3. Provide protection to workers in welfare; 4. Improve the welfare of workers and their families. Therefore, manpower development in Indonesia, primarily related to the handling of the global crisis comprehensively implemented and multidimensional. Employment problems faced by the current situation are: 1. There is an imbalance between jobs (job) with a labor availability (supply) caused by the global economic crisis. 2. Competency and quality of the labor force that relatively inadequate. 3. The inadequate protection and welfare of workers. Related to the comprehensive policy taken by the Indonesian government in dealing with labor problems in the era of this crisis there are: 1. Expansion of employment opportunities The measures implemented are the development of good productive economic enterprises at different scales and types of businesses that require labor as one factor of production. For that measures taken consist of general policy, sectoral, regional and specific policies. Public policy that was taken by the government include improving labor quality through education and training and implementation of competency-based certification system in order to ensure the quality of manpower, improvement of infrastructure development, improving performance and professionalism of the 4

5 bureaucracy, increase development small and medium businesses and to create a business climate conducive. Sectoral policies that were taken by the government aimed at the development- production activities that oriented on expanding employment opportunities adjusted to the potential of the sector. Regional policies taken by the government include the facilitation of institutional capacity building in investment licensing arrangements and coordination among local agencies to ease investment, facilitation of capacity building regional government officials (local government) with increased capacity in priority public services and the preparation of investment strategies, facilitating increased the ability to increase the Regional Revenue without the burden of business and investment activities. Specific policies which are intended are policies designed to expand employment specific groups or specific regions whose characteristics require special handling, such as the unemployed educated youth, women, disabled, poor / left, remote areas. Specific policies that were taken by the government include provision of facilities or easy access to existing employment opportunities, development of specific patterns of job creation and empowerment of groups / areas (fishermen, rural women, farm workers). 2. Improving the quality of labor force Improving the quality of labor force quality improvement and workforce development implemented through education, training and development in the workplace. Directorate General of Training and Productivity is an echelon I units of the Ministry of Manpower and Transmigration of the Republic of Indonesia, which has a duty to improve the quality and labor productivity through training programs and coaching increased productivity. In 2009 this year, to tackle unemployment and poverty, the government stimulus 5

6 program of employment with the goals and objectives to implement skills training and community labor migration and increasing training facilities in VTC both managed by central government as well as local government. Overcome unemployment as a result of the global crisis is one of the efforts taken by the government is to improve the delivery of overseas workers mainly in the formal sector in accordance with labor market opportunities abroad, such as: field of Oil and Gas, Health services (caregiver), welding, maritime etc. In order to deal with unemployment as the global crisis, the government launched the Poverty Unemployment movement that aims to push the unemployment rate and reduce poverty. This movement is expected to increase employment amounted to 2, 6 million per year. In some provinces also established JSN (Job Safety Net) is intended as a safety net for workers affected by layoffs. The target of this program is the empowerment of the poor, victims of labor layoffs, ex workers abroad, the young unemployed and productive. Realization of this program includes job training, financial aid and technical assistance for management and technical development. For guarantee job security the government will also implement institutional revitalization of industrial relations institutions that produce the National Tripartite Cooperation Body as well as in provincial and local level and to encourage the formation of Bipartit agreement at the firm level. Revitalization of industrial relations also produces 41,252 Company Regulation, Joint Working Agreement 10,501, cooperative workers and social security workers. In the field of supervision of labor (labor inspection) has tried to increase labor inspector is expected to be able to suppress levels of occupational accidents. 6

7 D. Role of Vocational Training Center in dealing with Global Crisis Law Number 13 of 2003 became the basic foundation for the improvement of labor quality. Improving the quality of labor is done through job training in Government Regulation number 31 years 2006 about NATIONAL TRAINING SYSTEM. Directorate General of Training and Productivity Development is an echelon I units of the Ministry of Manpower and Transmigration of the Republic of Indonesia, which has a duty to improve the quality and labor productivity through coaching training programs and increased productivity. The vision of the Directorate General of Training and Productivity (Directorate General of Training and Productivity Development) is developing the competitiveness of manpower through quality and productivity development in order to realize the prosperity of workers and their family. The missions are: 1. To develop regulation and policy in training and productivity areas. 2. To develop the institution of training and productivity which are able Compete in international forums. 3. To develop the effective and efficient systems and methods of training and productivity development. 4. To develop professional training and productivity resources. 5. To develop the competitiveness of Indonesian manpower that can compete in the era of globalization through vocational training and productivity development. 6. To develop the budgeting system of training and productivity. 7. To improve the utilization and empowerment of manpower optimally and humanly. To support the implementation of tasks and functions in implementing coaching training and productivity so the Directorate General of Training and Productivity Development supported by 7

8 Vocational Training Centers, Training Centers Transmigration and Productivity Development Centers. In 2008, 182 VTC exist, the PDC 20 and 24 TTC which spread in all over regions in Indonesia. From that number of institutions, there are only 18 institutions are directly managed by and responsible to the DG, while others are managed by local government at the province or district or city level. To support the increased effectiveness of training in order to be absorbed in the labor market, the government has been implementing the revitalization of the VTC 182 across Indonesia, including establish a Kiosk (a service unit) 3 in 1 (Training, Certification and Placement) that are online and linked to labor market information in each area. Kiosk 3 in 1 is intended to provide information about training, certification and placement. Training is conducted in the form of Competency Based Training, Community Based Training (by Mobile Training Unit), and Apprenticeship Training. In the management of VTC has been established under the DG assessment center for professional certification / competencies. Training programs implemented in various VTC these include Construction (Carpenter and craft man furniture, stone and steel construction), Electrical, Automobile Technology, Business Administration, Mechanical Technology, Agriculture, Welding, Industrial Mechanics, Industrial Electronics, Engineering and Metal Works, Miscellaneous trades (garment, embroidery, wood carving), Tourism. To ensure the quality of training output is implemented competency test conducted by the Professional Certification Body in accordance with the vocational training that followed. In order to overcome the impact of global crisis will Directorate General of Training and Productivity Development received budget allocation fiscal stimulus employment sector 2009 that is intended for employment skills training. This budget is expected to train at least 648,988 workers. Training package will be distributed in various provinces 8

9 / regencies / municipalities in Indonesia. Each region will not receive the same training package amount because it depends on the level of skills required and the amount of labor available. This fiscal stimulus program is for victims of layoffs, foreign workers are sent home and micro actors who have lost business because of the crisis. Basically the VTC as a government training institutions are expected to be a driving force and an example in training skills and improve labor competencies in accordance with the job market both at home and abroad. However, until now VTC is not functioning optimally. This is due partly because of budget constraints from the outside (other party) and the equipment and infrastructure that cannot be independent VTC (self financing). In connection with the government adopted a policy of revitalizing the VTC with the following strategies: 1. Revitalization of the training policy ( inventarisasion and alignment legislation, mapping VTC in each district, a strategic revitalization plan VTC, VTC development plan). 2. VTC management quality improvement (training for instructors and coaching staff, training for competency assessor, VTC Training manager management, administration and training for coaching staff, Building VTC cooperation with certification bodies and the business). 3. Improving the quality of the program (codification of competencybased training programs, codification of community-based training programs, dissemination of the entire VTC programs, technical assistance implementation of competency-based training programs). 4. Improving facilities and infrastructure (rehabilitation of buildings, rehabilitation workshops, rehabilitation training equipment, to build a competency test on the VTC). 5. Improving the quality of training resources. 9

10 6. Development of VTC institutional as a center of excellence, centers of development and the center of empowerment. 7. Development of collaboration, partnership and networking with industry / enterprise. E. Summary 1. The global crisis impact on unemployment and poverty increased. 2. In order to overcome the unemployment problem and to overcome poverty, the government adopted a policy, among others to improve the quality of employment through skills training through a fiscal stimulus program in 2009 to fill the existing job opportunities both inside and outside the country or to independent businesses. 3. Package and the type of training that will be implemented according to the conditions and potential of each region and the number of available labor. 4. To improve the performance of the VTC training services will be taken VTC revitalization efforts throughout Indonesia. 10

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