Based on previous data, the country’s economic development showed
stable conditions. After experiencing recession and stagnation that caused the
slowdown of economy in 1998 with the growth rate of economy being negative
13.1%, it then improved with the growth rate of 0.8% in 1999, and further
improved with the growth rate of 5.6% in 2005, which was slightly better than
5.13% in the year 2004. It is expected that economic growth will rise again to
around 5.7 percent in 2006. With such an economic growth, employment
creation, particularly in the formal sector, is limited and not considerable enough
to accommodate the increasing amount of labor supply. Those who cannot be
employed in the formal sector have to continue either being unemployed or
employed in the informal sector that acts as the last resort. Meanwhile, the
inflation rate is expected to reach about 7% in 2006, lower than the inflation rate
of 17.11% in 2005.