Erfan Maruf, Arnoldus Kristianus, Jakarta – The chairman of the National Economic Council, Luhut Binsar Pandjaitan, acknowledged a wave of mass layoffs in recent months but expressed optimism that tens of thousands of new jobs will be created by the end of 2025.
Speaking at the International Conference on Infrastructure (ICI) in Jakarta on Thursday, Luhut said government projections estimate that as many as 67,000 new jobs could be available before the year's close, largely driven by foreign direct investment (FDI) in industrial and infrastructure projects.
"Yes, we're seeing significant layoffs right now," Luhut said at the Jakarta International Convention Center. "But at the same time, we predict that up to 67,000 new jobs could emerge by the end of this year."
According to Luhut, recent investments, particularly from China, are contributing to new employment opportunities outside Indonesia's major cities. Instead of building factories in urban centers, many Chinese investors are choosing smaller towns, where they have already begun hiring thousands of workers. He said cultural preferences, including feng shui beliefs, influenced these location choices.
"They are coming to small towns, and each facility is employing up to 10,000 workers," Luhut said, adding that such growth has been made possible by the government's ongoing infrastructure push.
China remains a dominant player in Indonesia's FDI landscape. In the first quarter of 2025, it ranked third with $1.8 billion in investment, behind Hong Kong ($2.2 billion). In the commodity refining sector alone, Chinese companies invested $1 billion, contributing to Indonesia's downstream industrialization agenda.
Key Chinese firms such as battery giant CATL and automakers BYD and GAC Aion have ramped up their presence. CATL's affiliate CBL is preparing to break ground on an electric vehicle (EV) battery facility in partnership with Indonesia Battery Corporation. BYD is investing $1 billion in an EV plant in Subang, West Java, with an annual capacity of 150,000 vehicles. GAC Aion, in collaboration with Indomobil Group, recently opened an assembly plant in Purwakarta, starting with a production capacity of 20,000 units a year.
Luhut argued that infrastructure is the cornerstone of Indonesia's regional development and urged more investors to support the country's infrastructure agenda. He cited growth in smaller towns and along the Trans-Sumatra toll road as examples of infrastructure unlocking new economic potential.
"We aim for 8-9 percent economic growth by 2028 or 2029," Luhut said. "Is it possible? I believe so, but only if we work as a team."
Official data from the Central Statistics Agency (BPS) shows that while Indonesia's open unemployment rate dropped slightly to 4.76 percent in February 2025 from 4.82 percent a year earlier, the number of unemployed people still rose by 80,000 to 7.28 million due to a growing labor force. Youth unemployment remains high at 16.16 percent, the highest among all age groups.
Source: https://jakartaglobe.id/business/chinaled-investments-to-offset-indonesias-recent-job-cuts-luhut-say