To catch the potential demographic bonus, Indonesia should use its biggest asset: fishing nets.
Time is running out. In only five years, the window of opportunity to make the most of Indonesia's current demographic profile will start to close. Short-term policies to harness available resources can reap the rewards of this opportunity. And the best thing Indonesia can do is go fishing.
As a country made up of 17,508 islands, Indonesia has huge economic potential in fisheries. The ocean under Indonesian control constitutes four times its land area. However, even though Indonesia has always been a proud maritime nation, the level of development of Indonesia's marine economy is estimated to be only around 25 percent of its total potential.
In the next five years, Indonesia needs improvement in human capital, creating good employment opportunities, and increasing women's involvement in the labour market. Such steps would allow Indonesia to capitalise on its young work force and achieve what is known as the 'demographic dividend' - the economic boost afforded by a large number of young workers with few dependents.
Globally, the maritime sector is worth around US$1.33 trillion a year or 1.3 times Indonesia's current gross domestic product.
The domestic fisheries sector contributes to the creation of around 45 million Indonesian jobs or equivalent of 35 percent of its labour force. Fishing, processing, trading fish and fish-based products, trading tools to support fishing, and shipbuilding and ship repair services all generate economic activity. This sector provides food and creates many opportunities for small and medium entrepreneurs - the backbone of the Indonesian economy.
Developing this sector faces many challenges. Workers with low levels of education, a lack of support for skills training and the problem of bringing young people, especially from fishing families, to work in the industry among them. Older fishermen dominate as young people are not interested in the work. Low pay and hard, dangerous work make it unattractive.
One-third of fishery workers have only elementary-equivalent education. A quarter haven't had formal education at all. Only 1.1 percent of fishery workers have a diploma or undergraduate level of education. Research in Tegal Central Java and Makassar of South Sulawesi in 2020 found fishermen with little education faced issues with their financial planning so were vulnerable to loan sharks. By relying on punggawa (renter), they stay trapped in poverty.
Fishing is also a male-dominated industry, although some women are involved in processing fishing products.
To maximise opportunities from Indonesia's young demographic profile, policies could focus on increasing investment in human capital development, especially for young people and women. So far, efforts have mainly come from the central government, which has set up industrial fisheries zones, mostly in western Indonesia. But local government and the community also have crucial roles to play. Java, the seat of the national government, and areas outside Java have different needs. Fisheries infrastructure - ports, cold storage facilities and processing plants - are more developed in Java. More needs to be done to develop these facilities away from Java; eastern Indonesia espcially requires special intervention.
Reforms in vocational education and skills training can help to narrow the skills gap. Of the 140.5 million people of working age in 2021, 54.66 percent had only lower secondary education. The unemployed numbered 10.9 million and, worrtingly, many of these were young people with secondary education (high school and vocational school). Job insecurity is rife, affecting 59.4 percent of the workforce.
Young people and women are key to Indonesia's devlopment as the nation pushes for its 2045 Vision. But in 2021, 44.6 per cent of the total unemployed were between 18-30 years old. This level of youth unemployment will harm Indonesia's productivity. The participation rate of women in the labour market is still only 54.2 percent compared to 83.6 percent for men.
Whether Indonesia in 2045 benefits from the window of opportunity offered by its demographic profile, or walks through a door to disaster is still far from certain. With huge challenges ahead and the clock ticking, Indonesia needs to find a strategy for human resource investment and economic development that focuses on the strength of its economic potential.
Nawawi is a researcher at the Research Center for Population BRIN. His research focuses on employment issues in Indonesia, particularly related to Indonesian Migrant Workers in Japan and South Korea and the implementation of social security programs in Indonesia. Since April 2022, he is also Head of Research Center for Population BRIN.