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Indonesia: More Investment, Less Job Creation

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Algo Research Team

Economics | May 16, 2023 | Views: 392

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Key Summary:

  • Less additional jobs from capital-intensive investment
  • Headwinds facing labor-intensive sectors
  • Rising layoffs

In the past 10 years, investment has been one of the pillars for the government to push economic growth and, consequently, to open more employment opportunity in the country. Total investment, including FDI & DDI, reached IDR1,207tn in 2022, up +34% YoY from 2021 or roughly +13% CAGR from 2013-2022. Most of the investment in the past few years have been dominated by capital-intensive sectors such as metal & mining as the government continues its focus on downstreaming initiatives like in nickel to increase value added products.




Lower marginal benefit in job creation

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