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Jakarta forecasts 8 million will be jobless this year

By Susan Sim, Indonesia Correspondent,
in The Straits Times
6 February 1998, p. 1

JAKARTA -- More than eight million Indonesians will be out of work this year, the government forecast yesterday as mass lay-offs and new entrants are expected to double the pool of jobless in the crippled economy.

The new unemployment figure, up from an earlier forecast of six million, represents almost 10 per cent of the 90 million-strong workforce that supports a population of 200 million people.

With fears of rising food prices already resulting in several riots in Java and elsewhere in the past week, the government yesterday also pledged to create more jobs with aid from the World Bank.

Manpower Minister Abdul Latief, who made the forecast following a meeting with President Suharto, said that up to 10 trillion rupiah (S$ 2.14 billion) was available for work programmes.

"The President instructed me to look immediately for a way to overcome new unemployment as a result of retrenchment from the economic crisis, which may reach one million to 1.5 million people," he told reporters.

The new unemployment forecast, he said, was based on the 1998/99 Budget assumption of zero economic growth for this year.

With no new job openings, the 2.7 million people expected to join the workforce this year would join the jobless queue automatically, he said. Added to the 4.4 million already unemployed, "this means there will be more than eight million unemployed this year", he said.

His figure does not, however, include the estimated 50 million people or half the workforce, that trade union officials project will be underemployed this year.

The officials had also forecast the number of unemployed at 13.5 million.

There was some urgency in creating more jobs, because those laid-off would run out of money in three to six months, Mr Latief cited Mr Suharto as saying.

He said he told the President, however, that he was "optimistic" the problem could be overcome using the 1.8 trillion rupiah for unemployment projects allocated under the state Budget and US$ 1 billion (S$ 1.7 billion) in aid money.

Visiting World Bank president James Wolfensohn, who left Jakarta yesterday morning, told reporters on Tuesday night that the bank had diverted US$ 600 million from the US$ 10 billion in active funds allocated to Indonesian employment schemes.

Another US$ 400 million would also be disbursed to buy staple foods and medicines.

The bank was also authorising a nationwide programme of emergency labour-intensive works, to provide jobs for workers affected by the ongoing financial crisis.

The programme will create more than 75 million man-days of low-wage jobs for the remainder of the year. Some of the projects already in place pay the workers 5,000 rupiah a day to clean rivers and city canals, or work on the railroads.

While these crash employment programmes for the poorest segments in society were lauded by observers as useful in checking social tensions, some questioned their effectiveness.

"The payment for taking part in demonstrations is also 5,000 rupiah for one to two hours of "work". And participants also have the opportunity to rob shops," a senior government official told The Straits Times.

He said some social activists and political elements out to create chaos were responsible for organising demonstrations, which deteriorated into looting rampages in several towns in east and central Java and in Ujungpandung in South Sulawesi in the past week.

Almost 200 people have been detained for their involvement so far, reports said. But the military was well-prepared and able to quell the riots quickly.

He said he expected more riots to take place in the next two to three weeks before next months' presidential election.

"But they will be short and sporadic because the military is very strong and there is no political leadership behind the rioters," the official, speaking on condition of anonymity, said.

"But it is still disturbing because anti-Chinese sentiments are growing among the lower levels of society, ignited by some Muslim leaders who have been implying that the Chinese tycoons are responsible for the current economic crisis," he added.

He stressed the riots would have no significant political impact. "There will be no change in regime," he said.

Sources have said up to 20 military battalions, or 16,000 troops, are already on standby in various locations in Jakarta and surrounding cities.

Officials have quietly staged several mock riots in recent days, with more planned, to test their effectiveness and improve response time.

Meanwhile, worred, too, by growing crime here, several embassies have beefed up security and geared up their evacuation plans, sources said.