Red tape makes it hard for foreigners to invest in Indonesia or move there to work
, a teacher in a remote part of West Kalimantan, Indonesia’s slice of Borneo, is charmed by the new road connecting her school to Putussibau, the nearest town. It is smooth, reasonably straight and cuts through swathes of jungle. It used to take three hours to get into town, she says. Now it takes 40 minutes.
Shoddy schooling makes it hard for people to find jobs. Red tape makes it harder still. According to the World Bank’s “ease of doing business” ranking, Indonesia has the world’s third-highest severance pay. An employee dismissed after a year is entitled to four months’ pay. Since it is expensive for firms to shed workers in lean times, they are reluctant to hire in good ones.
Hence an idea popular among policy wonks: to improve vocational schools and government training schemes. School reforms would take a generation to be felt, but better training for the existing labour force could create more jobs within a year, argues Chatib Basri, a former finance minister. That would give Jokowi the political capital and momentum he needs to press for further changes.
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