Indonesia struggles to escape middle-income economy trap

Quality jobs for youth are key as it seeks to move to high-income status, analysts say

- Linda Yulisman

JAKARTA - Years of work at a factory enabled Ms Sari Sartika Dewi to enrol as a law student at a private university in Karawang, West Java, in 2018.

Successfully juggling her fulltime job and studies, she earned a bachelor's degree in 2022. With it, the 34-year-old divorcee hopes she can find a more decent job.

However, finding a role that suits her new qualifications may prove to be elusive in Indonesia, which, despite being South-east Asia's largest economy, faces an uphill task in providing its young people with quality employment.

Ms Sari's factory employer, a foreign shoemaker that produces sneakers for a global brand, pays her 5.2 million rupiah (S$440) a month, similar to the region's monthly minimum wage. The amount also covers social security.

"I consider my current workplace a stepping stone. I want to make a leap, but don't know how," Ms Sari told The Straits Times. "I am aware that thousands of people are seeking jobs. This makes me think twice about moving." Unlike many of her Indonesian peers, Ms Sari holds a "middleclass" job, which pays a wage that can provide middle-class consumption and offers benefits and

social security protection.

In 2023 prices, middle-class jobs pay around 5.2 million rupiah monthly, according to Dr Maria Monica Wihardja, visiting fellow at the ISEAS Yusof Ishak Institute and a former World Bank economist.

Providing middle-class jobs is a challenge for Indonesia as it seeks to move up from an upper middleincome economy to a high-income country, the Washington-based World Bank says.

Many young people in Indonesia often find themselves trapped in menial jobs after completing their education.

At shopping malls, train stations and other public spaces, young people working as cleaners are a common sight.