正式繁荣的印尼改革

Acknowledgements his report was prepared by the Poverty and Equity and the Macroeconomics, Trade, and Investment Glob-al Practices of the World Bank by a team that included Imam Setiawan (Economist), Samuel Nursamsu(Economist), Vinayak Alladi (Consultant), Christine Ablaza (Consultant), Dyah Pritadrajati (Consul-tant), Filip Jolevski (Economist), and Silvia Muzi (Senior Economist), led by William Seitz (Senior Econ- The team benefited from guidance and strategic direction from Benu Bidani (Practice Manager), HabibRab (Practice Manager), and Carolyn Turk (Division Director for Indonesia and Timor-Leste). The report received valu-able comments from peer reviewers Sahar Sajjad Hussain (Senior Economist), Wendy Cunningham (Lead Economist), andLourdes Rodriguez Chamussy (Senior Economist), as well as other colleagues from the World Bank Indonesia country team.The team is grateful for the extensive guidance and support of Ilsa Meidina (Senior Social Protection Specialist), Anastasiya The report greatly benefited from advice and feedback from the Ministry of Manpower, Ministry of Finance, Ministry ofNational Development Planning, and the National Economic Council. The team is grateful for operational and administrative support provided by Dyah Kelasworo Nugraheni (Program Assis-tant) and design and layout support from Mikael Bima Nainggolan. Financial support from the Australia-World Bank Indo- Contents Acknowledgements.......................................................................................................................................IExecutive Summary.....................................................................................................................................IIIChapter1 - Indonesia’s growing informality exceeds that of its peers.................................................................1Informal work is the norm, not the exception................................................................................................4Informal businesses lack knowledge and motivation to formalize.....................................................................11Exceptional fiscal constraints limit enforcement capacity and leave resources spread thinlyover many competing priorities................................................................................................................19 The under-resourced safety net is caught in a vicious cycle, provoking an overreliance ondistortionary labor regulations.................................................................................................................22 ExecutiveSummary nformality and job quality are amongIndonesia’s most pivotal developmentchallenges.The country has enjoyedfast and inclusive growth averaging morethan 5 percent per year for two decades. Indonesia’space of formalization has consistentlylagged economic growth, leaving large swaths of society outside the reach of regulation and social protection.Crossing the span from lower middle to upper middle-in-come status took Indonesia 35 years. At the time of thatachievement, fewer than 19 percent of Indonesian workerswere formal according to the internationally comparableSDG indicator, 28 percentage points below the typical coun-try reaching the same milestone. This fact illustrates thesobering reality that, despite its level of income, Indonesiahas one of the region’s least formal labor markets (Figure1). Most Indonesians work without protections for leave,unemployment, or retirement, and most firms operate out-side the country’s legal framework—locked in a cycle that idly reduced extreme poverty. Foundational “first gener-ation” economic and institutional reforms to stabilize themacroeconomy, liberalize markets, and improve gover-nance quality were key to this success. But as has been thecase for all advanced economies, the next phase of growthwill come with rapidly increasing demands for complex-ity and specialization. For this reason, recent trends arecause for special concern. Far from the rapid pace neededto sustain progress, productivity growth has recently gone FIGURE 1 and informal firms in Indonesia are blurred, but the largemajority occupy the extreme informal end of the spectrum,operating at the micro scale and focused on subsistence. In-donesian women more commonly work as informal home-based entrepreneurs than working outside of the home,often citing care responsibilities and home tasks as moti-vating factors. These informal microenterprises, while usu-ally profitable, provide only modest and volatile income,missing opportunities for productivity growth due to theirlimited engagement with the formal sector. Entrepreneursthemselves often avoid opportunities for formalization, due This report is one of a three-part series focused on theessential challenges Indonesia must face to achieve itslong-term aspirations for economic prosperity.This re-port focuses on the policy priorities specifically addressingthe obstacles to