Wednesday, July 2, 2025

The Three Economic Big Issues (9)

Indonesia is indeed known for having a generous number of public holidays, including national, religious, and collective leave days (cuti bersama). While these holidays are deeply embedded in the nation’s cultural and spiritual rhythm, their impact on public services, productivity, and leisure is a double-edged sword.
On one hand, frequent holidays can disrupt the continuity of public services, especially in government sectors where administrative tasks often face delays. Citizens seeking permits, official documents, or legal services may find themselves waiting longer due to extended closures. For the business sector, particularly in manufacturing and logistics, these frequent breaks can affect supply chains and delivery schedules, sometimes lowering overall output if not managed properly.
However, from a leisure and mental health perspective, these holidays are a vital pause for the overworked and often underpaid segments of the population. They offer opportunities for travel, family bonding, spiritual reflection, and recovery from the pressures of urban life. The tourism and retail sectors often experience a boom during these periods, boosting local economies and creating seasonal job opportunities.
While Indonesia’s holiday-rich calendar poses some challenges in terms of efficiency and service delivery, it also plays a crucial role in preserving cultural identity, fostering national unity, and giving citizens a much-needed breather in an increasingly fast-paced world.
There is a notable relationship between public holidays and labour productivity, though it is more nuanced than simply suggesting that more holidays lead to lower output. In fact, a balanced number of public holidays can boost overall productivity by allowing workers to rest, recharge, and return to their jobs with renewed energy and focus. Countries with generous holiday policies, such as Germany or the Netherlands, often maintain high levels of productivity per hour worked, suggesting that efficiency is not always about the number of hours clocked in, but how effectively those hours are used.
Moreover, the anticipation of a holiday can sometimes increase productivity in the days leading up to it, as workers push to complete tasks before the break. On the other hand, excessive or poorly spaced holidays can disrupt workflow and reduce momentum, especially in industries dependent on continuous operations. Therefore, it’s not just the quantity of holidays that matters, but their timing, distribution, and how workplaces adapt to them.
While holidays are essential for mental health and work-life balance, their impact on productivity depends on broader economic structures, workplace culture, and how intelligently such days off are integrated into the national work rhythm.

Among the countries with the highest number of public holidays in the world, India often tops the list. Due to its rich cultural, religious, and regional diversity, India offers a wide range of public holidays, which can vary depending on the state, with some regions observing over 20 official holidays annually. Following closely is Colombia, where both religious and civic holidays are generously distributed throughout the year, often creating long weekends that people eagerly anticipate.
Thailand is another country known for its generous public holiday calendar, often celebrating Buddhist traditions alongside national events, making up around 19 to 20 public holidays each year. Japan also offers a significant number of public holidays, and what makes it unique is their system of “Golden Week” and “Silver Week,” periods with clustered holidays that sometimes create full-week breaks. Lastly, South Korea stands out with a blend of modern national days and traditional holidays like Chuseok and Seollal, pushing its total to around 16 or more days off annually.
These countries demonstrate that having a high number of public holidays does not necessarily hinder economic performance—rather, when integrated into a smart work system, these breaks can enhance overall wellbeing and even productivity.

Back to the issue of Employment.

Several countries demonstrate strong job markets at home, resulting in very few of their citizens seeking work abroad. At the top of this list is the United Arab Emirates, where approximately 99.37 percent of the population chooses to remain, largely because the country’s oil and gas wealth has supported expansive domestic employment opportunities across construction, services, finance, and technology sectors.
Following the UAE, Japan stands out with 98.95 percent of its population staying put. Japan’s employment landscape is bolstered by strong domestic corporate systems, lifetime employment traditions, and a diversified economy ranging from automotive to electronics and healthcare.
Germany ranks third, with around 98.56 percent staying. Its robust Mittelstand (SME) sector, strong vocational training, and industrial manufacturing base ensure plentiful job opportunities that discourage migration.
Next in line is the United States, with approximately 98.50 percent of residents remaining at home. A dynamic domestic job market characterised by high-tech industries, financial services, and entrepreneurial ecosystems offers vast career choices for locals.
Rounding out the top five is Australia, where 96.22 percent of its population prefers to stay. Strong healthcare, education, mining, and service industries provide sufficient employment, supported by immigration policies that balance foreign labour intake with local opportunity.
These nations share common features: high quality of life, strong domestic economies, and diverse industries offering skilled and unskilled employment alike. As a result, their citizens rarely feel compelled to seek work overseas.

Indonesia’s labour force is dispersed across a variety of sectors, each playing a vital role in the nation’s economy. As of August 2024, nearly 47 percent of the workforce was employed in agriculture, forestry, and fisheries, reflecting the country’s continued reliance on traditional livelihoods. The manufacturing sector absorbed around 13.8 percent of workers, driven by industries such as food processing, textiles, and electronics. Construction, including infrastructure and housing, employed approximately 6.5 percent of workers.
The realm of trade and retail, including repair services, accounted for nearly 18.9 percent, supported by Indonesia’s vast informal economy and domestic markets. Meanwhile, accommodation and food services, which encompass everything from restaurants to tourism hospitality, engaged around 7.8 percent of the workforce. Additional sectors include transport and storage at 4.3 percent, education at 5.0 percent, public administration at 3.5 percent, health and social work at 1.6 percent, and professional services, communications, utilities, and others making up the remainder.
Indonesian workers are distributed across agriculture, industry, and services, with agriculture remaining the largest employer even as the manufacturing and services sectors steadily grow and diversify the labour market.

In general, migrant workers — especially those employed in low-skilled or manual labour sectors — face a range of systemic challenges when working abroad. These include exploitative working conditions, lack of legal protection, language barriers, cultural discrimination, and limited access to healthcare or justice. Many are subjected to long hours with little rest, underpayment, debt bondage due to recruitment fees, and restrictions on movement or communication. Their vulnerable status often prevents them from reporting abuse, for fear of losing their jobs or being deported.
In contrast, skilled workers — such as engineers, nurses, IT professionals, or academics — tend to enjoy better working conditions, higher pay, and greater legal protection. However, they still face hurdles such as workplace discrimination, homesickness, cultural adaptation struggles, or career stagnation if they remain in junior roles due to foreign credential limitations. While their lives are generally more stable than their low-skilled counterparts, they too are not immune to stress or exploitation.
As for data, multiple studies by the International Labour Organization (ILO), the International Organization for Migration (IOM), and various national governments have shown that low-skilled workers — particularly domestic helpers and farm labourers — often return home after their contracts end or when they can no longer endure the harsh working environment. On the other hand, skilled professionals, especially those who obtain permanent residency or citizenship, are far less likely to return to their home countries. Countries like Canada, Australia, and the United States tend to retain high-skilled migrants, many of whom eventually settle permanently. This pattern has led to what is often referred to as “brain drain,” where a country loses its best talents to richer nations, while only the lower-paid, exhausted workers come back home.

"Brain drain" refers to the emigration of highly educated, skilled, or talented individuals from their home country to another nation in search of better opportunities, higher wages, or improved living conditions. This phenomenon often affects developing countries, which invest in the education and training of professionals—only to see them leave and contribute to the economies of more developed nations. The loss of such human capital can hinder a country's development, weaken institutions, and create a cycle where the most capable individuals no longer see a future at home.

According to The Global Competition for Talent: Mobility of the Highly Skilled by Tito Boeri, Herbert Brücker, Frédéric Docquier, and Hillel Rapoport, published in 2012 by Oxford University Press, the global race for talent has intensified due to demographic shifts, technological advancement, and the increasing demand for knowledge-based economies. Countries are not only competing to retain their own highly skilled workers, but also to attract foreign talent through more flexible immigration policies, better career prospects, and incentives like fast-track visas or research funding. The book highlights that nations such as the United States, Canada, Australia, and many European countries have strategically restructured their immigration frameworks to prioritise talent over sheer numbers. This has led to a sort of "brain market," where skilled professionals, especially in science, technology, engineering, and mathematics (STEM), are courted much like top athletes or celebrities. In this competition, policy innovation and image branding have become as crucial as economic strength.
However, while the broader idea of a global "brain market" still exists and other countries like Canada and Australia continue to actively court high-skilled professionals, the United States has become a more complex and less predictable player in this space. Although the rhetoric around valuing talent has not disappeared entirely—with President Trump occasionally voicing support for skilled immigration—the practical implementation of immigration policy has become significantly more restrictive.
Rather than embracing innovation in policy and flexible immigration systems to attract the best minds in STEM, the current administration has prioritised tighter border controls, enhanced vetting, and nationalist policies under the banner of "America First." The result is that many highly skilled professionals now perceive the U.S. as a more hostile or uncertain destination, compared to previous years. Therefore, while the concept of countries competing for talent remains globally accurate, the United States has, in this current climate, distanced itself from the more open and welcoming model described in the book.

In Exodus: How Migration is Changing Our World by Paul Collier, published in 2013 by Oxford University Press, the author argues that large-scale migration of the skilled and talented from poor countries to rich ones creates a powerful and often overlooked domino effect. Collier explains that this phenomenon—commonly referred to as “brain drain”—not only deprives poor countries of their most capable individuals, but also reinforces underdevelopment and dependency in their home nations. As more professionals emigrate, the incentive for those left behind to invest in education or public service diminishes, because the local economy cannot offer equivalent rewards or recognition.
Moreover, Collier warns that when skilled migrants succeed abroad, they create aspirational networks that inspire even more people to leave, often without fully understanding the social or economic consequences. This can weaken social cohesion in the origin country and amplify inequality. At the same time, receiving countries benefit disproportionately by gaining already-educated workers without having invested in their upbringing or training—essentially importing talent at a discount. Over time, this dynamic risks creating a “migration trap,” where poor countries lose the very human capital they need to develop, while rich countries grow stronger on the backs of foreign-born professionals.

Several countries have been significantly affected by brain drain, particularly those with limited economic opportunities, political instability, or weak research infrastructure. One prominent example is India, which has seen many of its brightest engineers, IT professionals, and scientists migrate to countries like the United States and the United Kingdom in search of better research facilities and career growth. Nigeria is another case, where doctors and academics frequently emigrate due to insecurity, corruption, and poor healthcare systems. Philippines also faces brain drain, especially in the healthcare sector, as thousands of nurses leave annually to work abroad under better conditions. Pakistan has experienced a substantial outflow of highly educated youth, largely due to political uncertainty and lack of merit-based career advancement. Meanwhile, Romania, a European Union member, continues to lose skilled workers to Western Europe, especially in medicine and engineering, as local salaries remain low despite EU integration.

Indonesia does have the potential to experience a significant brain drain, and in some respects, it already is. Despite having a large and growing pool of talented students, professionals, and researchers, many Indonesians are choosing to build their careers abroad. This trend is driven by factors such as limited research funding, bureaucratic obstacles, low salaries in the public sector, and a lack of merit-based opportunities at home. For example, many Indonesian scientists, tech experts, and medical professionals have found better prospects in countries like Singapore, Australia, the United States, and Japan. While some eventually return, a significant number choose to stay abroad where their expertise is more recognised and rewarded.
Unless Indonesia strengthens its academic and professional ecosystems — including fair recruitment, investment in R&D, and transparent career pathways — it risks losing some of its brightest minds to nations that are better prepared to harness their potential. This concern is increasingly being raised by scholars, policymakers, and even returning diaspora who feel their contributions are undervalued at home.

Under President Prabowo, the Indonesian government must address the three major economic issues—stability, equality, and employment—through concrete and coordinated steps.
To preserve economic stability, the Administration should adopt a cautious approach to public spending, balancing ambitious social programmes with careful debt management. This means maintaining debt levels close to 40 percent of GDP, ensuring interest obligations do not crowd out infrastructure or social services. Implementing measured fiscal adjustments, especially as global interest rates rise, will safeguard against volatility.
For economic equality, the new government’s flagship programmes—such as free nutritious meals and village empowerment—must be fully funded and efficiently implemented across regions. To achieve this, tax reform should be strengthened through a new Revenue Ministry, as planned, and advanced digital tax collection systems. At the same time, incentives targeting MSMEs, agriculture, and downstream industries must translate into real gains for lower-income communities. The goal should be to narrow the gap between urban and rural, rich and poor, ensuring that pride of place doesn’t hide economic inequality.
On employment, Prabowo’s administration must go beyond infrastructure and mega-projects to prioritise upskilling workers for a fast-changing job market. Emphasis on vocational training, digital literacy, and clean energy sectors—coupled with labour protection reforms—can help formalise millions of jobs now in the informal economy. This is especially urgent given the looming energy transition and automation pressures. Public-private partnerships across sectors like EV batteries and sustainable agriculture should be leveraged to generate decent, future-ready employment.
The path ahead requires prudent fiscal discipline, inclusive social programming, and job-centred development. Only then can Indonesia turn aspirational slogans into tangible, resilient prosperity for all its citizens.

The Indonesian government consistently pursues an ambitious target of 8% economic growth primarily as a strategic imperative to elevate the nation's status and improve the overall prosperity of its citizens. Historically, periods of higher growth, such as those experienced in 1973, 1977, and 1995, demonstrated Indonesia's capacity to achieve such rates, driven by industrialisation, modernisation, and significant capital accumulation in crucial sectors like health, education, and infrastructure. The current administration, particularly under President Prabowo Subianto, views this robust growth as essential for Indonesia to definitively escape the "middle-income trap" – a scenario where a country struggles to transition from being a developing economy to a developed, high-income one.
Achieving an 8% growth rate is perceived as a critical accelerator for poverty reduction and for generating millions of new formal job opportunities, which are vital given Indonesia's large and growing workforce. This target is also intrinsically linked to the long-term vision of becoming a developed nation by 2045, aiming to significantly boost GDP per capita and enhance the quality of life across the archipelago. Furthermore, such an ambitious goal serves as a powerful signal to both domestic and international investors, indicating a strong commitment to economic expansion and creating a more attractive environment for investment, which is deemed crucial for driving further development in various sectors.
However, despite headline investment flows—record foreign direct investment of over US$47 billion in 2023 and Q1 2025 inflows—it is apparent that long‑standing structural constraints impede this growth spurt. Experts caution that Indonesia may overheat the economy, leading to inflationary pressure and financial fragility if expansion is forced beyond the current capacity. The IMF and World Bank project growth of around 4.7–5.1% in 2025, far below the 8% ambition, raising doubts about the realism of the target.
Critics also highlight that Indonesia must remove bottlenecks, including high logistics costs, policy inconsistency, bureaucratic hurdles, and endemic corruption. Without addressing these issues, even large investments—such as in EV, minerals, and infrastructure—may fail to reach full potential. Therefore, while the 8% growth target may offer an inspiring headline, insiders warn it may prove unattainable unless structural reforms deepen, particularly in raising productivity, governance, and institutional quality.

However, in realising these ambitions, President Prabowo appears to carry a certain handicap—one that, rather ironically, stems from within his own administration: his Vice President. While the outward posture of the presidency seeks dynamism and global engagement, the domestic counterpart has yet to demonstrate the same level of resolve or reliability, creating an imbalance that could prove politically costly.
Critics have voiced growing unease over Vice President Gibran Rakabuming Raka’s performance, particularly in light of his relatively quiet presence in national discourse. Some observers suggest he has yet to demonstrate the gravitas expected of a second-in-command, with moments such as his silent exit after opening the National Quran Recitation event drawing scrutiny. For a role that often requires gravitas and articulation, such omissions have sparked questions regarding his readiness.
Furthermore, many are questioning whether the promises made during the campaign—most notably the pledge to create 19 million jobs—were more rhetorical flourish than feasible policy. The World Bank’s recent report indicating a rise in poverty rates has only sharpened that scepticism. Compounded by waves of layoffs and business closures, Gibran’s critics argue there’s been little clarity on his roadmap for job creation or economic resilience.
Figures like Rocky Gerung and Soenarko have been particularly cutting. Gerung claims Gibran lacks the strategic awareness necessary for navigating global crises, while Soenarko flatly asserts the Vice President fails on crucial fronts like moral authority and statesmanship. Terms like “planga-plongo”—slang for dazed or clueless—have resurfaced in public commentary.
Still, defenders argue that Gibran is merely biding his time, settling into the rhythm of national politics. Yet with public expectation running high, silence and ambiguity may prove to be risky luxuries. 

President Prabowo’s outward-looking posture—marked by his whirlwind diplomacy, strategic visits abroad, and aspirations to position Indonesia as a key player in the Global South—has earned him praise on the international stage. Yet, this very orientation may become a double-edged sword if domestic matters are perceived to be left simmering unattended.
The concern is not merely rhetorical. While Prabowo has been lauded for his statesmanlike presence at forums such as the BRICS Summit and the St. Petersburg Economic Forum, critics argue that the home front remains riddled with unresolved issues: rising poverty, job insecurity, and a public health system still struggling to retain its own citizens. In this context, the Vice President’s perceived lack of initiative or gravitas becomes more than a personal critique—it risks becoming a structural liability.
A president cannot govern in isolation. The vice presidency, while often ceremonial, is expected to act as a stabilising force, a domestic anchor when the head of state is charting international waters. If that anchor is seen as drifting or ineffective, the burden of governance becomes asymmetrical. Prabowo’s ambitious foreign policy agenda, no matter how visionary, requires a capable and responsive domestic counterpart to ensure that the ship of state doesn’t list to one side.
In short, the absence of a strong, hands-on vice presidential presence could indeed weigh heavily on Prabowo’s administration. It’s not just about optics—it’s about operational bandwidth. And in a nation as complex and dynamic as Indonesia, that bandwidth must be shared, not shouldered alone.

[Part 1]
[Part 8]