Indonesian President Prabowo Subianto has hailed the trade deal with the Trump administration – averting punishing tariffs that would have gone into effect Aug. 1 – as the beginning of “a new era of mutual benefit” between Washington and Jakarta. But that’s not how a generation of young Indonesians who grew up in the shadow of the Asian Financial Crisis see it.
Indonesia is facing its worst jobs crisis in recent memory, with young Indonesians struggling most. Around 16% of people aged 15-24 are out of work – a rate far higher than neighboring Vietnam or Thailand. And for a nation that looks to developed countries like Australia and Japan as their reference point, young people are smarting from the lack of opportunity.
Indonesian youth already erupted in a clash of discontent this winter. Thousands took to the streets of Jakarta and other cities across the archipelago nation in a mass movement called “Dark Indonesia.” It was aimed at the country’s leadership over corruption and spending that protesters felt undermined the country’s prospects. While those demonstrations have abated, the frustration remains. Today, it is centered on a sense that, in Southeast Asia’s largest economy, young people cannot launch their careers.
Why We Wrote This
Indonesia is one of Asia’s fastest growing economies. But Indonesians’ ideas about what makes a “good job” have outpaced what the market can actually provide, leaving millions of young people out of work and fueling a sense of discontent.
Advocates of the new trade deal say it could move the needle forward, allowing the nation to create the kind of high-quality jobs that young Indonesians have come to expect. But it might not be fast enough to assuage a group whose expectations of job security have shifted as the nation’s economy has matured. They are swarming job fairs. More worryingly, a growing number of Indonesians are leaving the country altogether.
The majority of job seekers today are Millennials and Gen Z. “These generations have different expectations and preferences from Gen X, which dominated the job market 10 to 20 years ago,” argues Mohammad Faisal, executive director of Jakarta-based economic think-tank CORE Indonesia. “They value flexibility, prefer not to work 8-to-5 hours, want the ability to work from anywhere, desire shorter working hours with competitive pay, and expect digital integration in their work.”
In search of good jobs
On paper, Indonesia appears to be a rising powerhouse, making big strides in reducing poverty and increasing access to education as its GDP has steadily grown. This January, it became the first Southeast Asian country to join BRICS, a cohort of emerging-market economies like Brazil and India that promotes development in the Global South.
Indonesia was also one of the first Asian countries to secure a trade deal with the U.S. in the lead-up to Trump’s Aug. 1 tariff deadline. The 32% tariff Indonesia initially faced was slashed to 19%. Chief economic minister Airlangga Hartarto has said the deal could save about a million jobs in labor-intensive sectors.
But these aren’t the kinds of jobs Prayoga Hajid Mu’arif is looking for.
The information technology graduate has sent out dozens of resumes since he finished school last year. But with Indonesia gripped by what analysts call a “tech winter” – a period of slowed growth and mass layoffs in the tech industry – he’s given up hope of landing a job aligned with his degree. After months of silence and rejections, he’s now willing to work in any sector. Leaving Indonesia is also an option, but Mr. Prayoga says he’s not there yet.
Mr. Prayoga says news of the trade deal has left many young people disappointed. Some aspects of the agreement – like Indonesia’s commitment to buy millions of dollars worth of U.S. goods, including a number of Boeing planes – strike him as “unfair.”
“I’m still wondering why Indonesia agreed to these deals,” he says.
When it comes to Indonesia’s economy, Dr. Faisal says there’s “a very wide” gap between government promises and reality.
Indonesia still relies heavily on manufacturing and agriculture. And developing a more capital-intensive economy – where there’s less need for hard, manual work – takes time and investment. GDP growth “doesn’t automatically translate into job creation,” says Dr. Faisal, and Indonesia’s educational institutions generally aren’t nimble enough to respond to ever-changing market needs. This, combined with rigid labor laws and low wages, sets young people up for disappointment.
If the trend continues, experts say it could lead to a youth exodus, or a revival of the Dark Indonesia movement that swept through the country earlier this year.
Generation of discontent
In February, Indonesian netizens starting airing their frustrations with President Prabowo’s economic policy using two hashtags: #IndonesiaGelap (“Indonesia Goes Dark”) and #KaburAjaDulu (“Just Flee”), a call to leave the country in search of better jobs or a new life abroad. With every viral post, their outrage snowballed, and eventually spilled onto the streets.
In February, thousands of students, young professionals, and laborers marched against cronyism and collusion, as well as massive budget cuts they feared would hurt essential sectors like education and slow overall economic growth.
Data from the Ministry of Manpower shows 42,385 workers were laid off between January and June this year, helping push Indonesia’s overall unemployment rate to nearly 5% – but even that figure doesn’t include the millions of people who work in the country’s massive informal economy, some of whom are only working sporadically.
Abby Hammam, from Sukabumi in West Java, falls into this group.
He’s held a series of odd jobs since graduating from high school in 2016, most recently picking up a gig as a delivery man for an e-commerce platform. Like many other Indonesians his age, has become familiar with the ritual of scanning job portals and sending out resumes. His applications are frequently met with silence.
He says he’s caught in a vicious cycle: He needs money to pursue higher education, but needs a job to earn money – and to get a decent job, he needs more qualifications.
“If there were a word stronger than ‘difficult’ to describe this situation, I’d use it,” he says.
Yet if Mr. Abby were to get an education, there’s no guarantee that a stable, well-paying job is waiting for him on the other side.
Trade negotiators say the recent deal with the U.S. should change that. They argue that it will encourage more foreign investment, which in turn would bring more high-quality jobs to Indonesia – but that will take time, if it happens at all.
Economists are trying to project the deal’s potential impact, but without more information on how it will be enforced – information that should crystalize in the coming weeks – it’s hard to know if the market will catch up with young peoples’ expectations.
“As the saying goes, ‘the devil is in the details,’ and those details are still unavailable,” says Dr. Faisal.
