I. Indonesia's Labor Market
Indonesia is one of the largest economies in Southeast Asia, with a sizable labor market. According to data from the Indonesian Bureau of Statistics, as of 2019, Indonesia's labor force had reached around 180 million people. This number not only shows the sheer size, but also reflects the huge potential of Indonesia's labor market.
II. Labor Costs in Indonesia
Relative to other developing countries, Indonesia has relatively lower labor costs. According to World Bank data, the average monthly salary in Indonesia in 2019 was 22 million Indonesian rupiah (approximately $1,500). Although low, this is considered a relatively high salary in Indonesia.
III. Support from the Indonesian Government
The Indonesian government places great importance on economic development and is very supportive of foreign companies setting up subsidiaries or factories in Indonesia. To attract more foreign investment, the Indonesian government has introduced a range of preferential policies and tax incentives to reduce costs and risks for companies.
IV. Indonesia's Geographical Location
Located in Southeast Asia, Indonesia has a very advantageous geographical location. Indonesia has close economic ties with Asian countries like China, Japan and South Korea, as well as extensive trade relationships with Europe and the Americas. This means setting up factories or subsidiaries in Indonesia can better access Asian and global markets.
V. Demographic Dividend in Indonesia
Thanks to its enormous population size, Indonesia's demographic dividend is very noticeable. According to World Bankdata, as of 2019, the share of working age population between 15-64 years old in Indonesia was 67.3%. This signifies companies can recruit large numbers of workers more easily by setting up factories or subsidiaries in Indonesia.
VI. Conclusion
In summary, there are many benefits for employers to hire in Indonesia. Firstly, Indonesia has an enormous labor market with relatively low labor costs. Secondly, the Indonesian government is very supportive of foreign investment locally. Thirdly, Indonesia's favorable geographic location provides better access to global markets. Finally, the demographic dividend makes recruiting abundant workers easier. Therefore, we can see Indonesia will become a focus of investment attention in the coming years.