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Beyond Labour Market Flexibility: Issues and Options for Post-Crisis Indonesia

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  • Iyanatul Islam

Abstract

This paper argues that the notion of labour market flexibility represents an inadequate framework for understanding the challenges faced by a democratic Indonesia in the post-crisis period. Such challenges entail the need to nourish employment-intensive recovery, developing a credible and cordial industrial relations system and empowering workers to cope with the problems of vulnerability and risk that are inherent in any globally-oriented market economy. The uncritical embrace of labour market flexibility in the pre-crisis period overlooked some inherent problems, such as the failure to develop a coherent industrial relations system. Although labour market flexibility helped prevent a sharp rise in unemployment during the economic crisis, the plummeting of real wages strengthens the case for government interventions in dealing with adverse labour market outcomes.

Suggested Citation

  • Iyanatul Islam, 2001. "Beyond Labour Market Flexibility: Issues and Options for Post-Crisis Indonesia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 6(3), pages 305-334.
    • Handle: RePEc:taf:rjapxx:v:6:y:2001:i:3:p:305-334
    DOI: 10.1080/13547860120097377
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