Does FDI matter for Reducing Unemployment During 2016-2017 in Indonesia?
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Abstract
This study analyses the development of foreign direct investment (FDI) during Jokowi's three-year reign, as well as the effect of FDI in Indonesian labor absorption. We discuss the influence of FDI in absorbing labor in the west-east Indonesia during 2016-2017. This paper seeks to answer whether the development of FDI in West Indonesia similar to that in East Indonesia. In addition, whether FDI make a significant contribution to the region's unemployment and what industry assign as the most important in terms of job opportunities also become an interesting topic to have furthered explanation. We add this important discussion in our main analysis. Our analysis showed that even though FDI increased in the West and East Indonesia regions in 2016 and 2017, this growth had only a limited impact on job creation and was insufficient to reduce unemployment during those two years.
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