Page - (000049) - in Disrupted Development and the Future of Inequality in the Age of Automation

4 TECHNOLOGICAL TRANSFORMATION 41 Consider, for example, the case of Indonesia. In Indonesia, there have been numerous media reports related to automation and employ- ment impacts (e.g. Deny, 2017; Jakarta Globe, 2017; Jefriando, 2017; Praditya, 2017; Saragih, 2017; Tempo, 2015, 2016a, 2016b, 2016c, 2017; see also international press such as The Guardian, 2016). The McKinsey Global Institute (2017b) estimates that around half of all jobs in Indonesia are automatable using existing technologies. One exam- ple is that motorway toll booths are being automated to an e-payment system which has placed a question over 20,000 jobs, leading the Minister of Finance to announce at the annual meeting of the International Monetary Fund and the World Bank that automation might create a case for a future universal basic income in Indonesia (Jakarta Post, 2017; Jefriando, 2017). While formerly each tollgate required five employees working in shifts to ensure vehicles had paid the road toll, the cashless system which is being rolled out runs entirely without human operators, thus speeding up the transaction process and reducing traffic congestion. Yet, as of early 2018, the toll road operator PT Jasa Marga asserts that “former tollgate keepers would instead be relocated to different positions within the company (…) and would keep their permanent employee status” (Aisyah, 2017). There have, indeed, so far, been no reports of mass lay-offs despite the electronic system being implemented. What could be the reason? First, it could be that, as implementation is still in an early stage, lay-offs may be a matter of time, and could happen in a gradual manner. The company may also reduce its future intake of new employees as a result. Second, it could be that, in line with the quote above, PT Jasa Marga, which is currently expanding its business, truly has the capacity to absorb 20,000 people in other sectors of its operation. If that is the case, this raises the important question as to whether by raising overall productiv- ity and competitiveness, automation somehow allowed the company to expand. The latter would mean that automation has the double effect of reducing labor demand per unit of capital in one domain (e.g. manual toll collection) while raising labor demand in complementary domains (e.g. administrative or construction tasks). Finally, there is a set of institutional reasons that could be an impor- tant explanatory factor as to why PT Jasa Marga—a state-owned enterprise and thus facing potential developmental obligations—has not laid off workers: political and social-norms pressures as well as