Dynamic Demographic Base

Indonesia is the 4th most populous nation in the world. Apart from its remarkable fiscal and political transformations during the last decade, Indonesia is also undergoing a major structural shift in terms of demographics. Of the 240 million people, over 50% of the population is under 29 years old, and 60% of the population is under the age of 39, with around 52% of the population living in urban areas. This provides for dynamic labor market participation, growing at 2.3 million per year. A rapidly urbanizing population also provides for strategic pools of labor force in centers of investment.

Indonesia’s Demographic Dividend

Coupled with this demographic bonus is Indonesia’s commitment to improve productivity and the education level of its youth, with 20% of total government expenditure on education. This expenditure is higher than any other sector. Currently, the majority of university graduates are trained in technical fields such as finance and economics (28%) or engineering and sciences (27.5%).

Labor costs in Indonesia are the lowest among the 10 ASEAN countries, and even compared to urban centers of investment magnets, China and India.

Labor Cost in 2009