Although the number of people with jobs in August increased by 280,000 to 95.46 million compared to February, and exceeded the growth in Indonesia's total workforce during the same period, it was still not enough to significantly reduce the unemployment rate, according to figures released Friday by the Central Statistics Agency (BPS).

The total number of people between the ages of 15 and 64 who were eligible for employment in the formal sector rose by 110,000 to 106.39 million by the end of August, compared to February. Indonesia has a total population of some 220 million.This resulted in the number of people out of work during the same period falling by 170,000 to 10.93 million, or 10.28 percent of the workforce.

This is only a slight improvement over the 10.45 percent open unemployment rate recorded in February.

"There is a declining trend in unemployment, but probably not significant enough," BPS director Rusman Heriawan said, commenting on the figures. Rusman said the slow decline in unemployment was primarily due to this year's prolonged dry season, which had affected much of the country's agricultural sector.

"Some 2.18 million people working in the agricultural sector lost their jobs because of the long drought, which left vast areas of paddy field bone-dry," he said. "Fortunately, most of them eventually found jobs in other sectors, resulting in a shift in employment, rather than another rise in unemployment."

Indonesia's open unemployment rate rose to 11.2 percent in November last year as the country's consumption-driven economy stumbled under the twin strains of rising inflation and higher interest rates resulting from last year's fuel price hikes.

The economy has since this year's second quarter rebounded from the slump, growing by 5.22 percent, and by 5.52 percent in the third quarter, providing hope that more jobs will be created. The government hopes to reduce open unemployment to 5 percent of the total workforce by 2009.

The latest growth figures are, however, still far from the government's growth target of 5.8 percent for this year, and may not be sufficient to provide enough jobs to keep pace with the growing workforce or layoffs.

This is due to the fact that a 1 percent growth rate now translates into only some 200,000 jobs, compared to 400,000 in the past, as investments nowadays tend to be more capital-intensive than labor-intensive. – JP/Urip Hudiono