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Stalled Indonesian economy fuels jobless
crisis
By Tony Sitathan
Irwin Goenawan graduated at the top in his class
studying for magister manajeman, the Indonesian
equivalent of a master of business administration (MBA)
degree. He comes from a middle-class family. His father
is a respected academician and honorary professor in
Jakarta's Pancasila University, while his mother runs a
small gift shop selling paintings and art and craft in
Central Jakarta.
Irwin has most of the essentials in
life and some of the luxuries that others his age can
only dream of. But despite his above-average lifestyle
and overall sense of achievement from graduating at the
top of his class, something deeply bothers him.
Unemployment.
Irwin graduated almost two
years ago to qualify for magister manajeman, but
has been trouble finding a job to suit his skills.
"I have been talking to IT [information
technology] companies, banks and financial houses as
well as research and broadcasting media houses and it
looks like it is getting nowhere. Everyone seems to be
maintaining the status quo since there has been a freeze
in hiring new staff to replace the older ones that are
on the verge of retirement," he said. Irwin was unable
to get full-time employment in Jakarta and is thinking
of moving to Bandung and helping his cousins run a
clothing store.
Irwin's plight is not new to
Jakarta or elsewhere in Indonesia. Unemployment has
become a major national problem. According to the
Central Bureau of Statistics' (BPS) latest quarterly
survey, the level of unemployment at the beginning of
the second half of this year reached 8 million people,
or 8.2 percent of the country's 97.6 million labor
force.
Although the unemployment figure appeared
low, BPS acknowledged that the new data were "worrying"
because 61 percent of the unemployed were young men in
the 15-24 age range. And the greatest worry, according
to sociologist Indrayani Shanti, is the fear that this
age group may turn to crime to make a living. "There are
more and more youths today, unable to find employment,
turning to crime and other means to eke a living in
cosmopolitan cities like Jakarta. My greatest worry is
that unemployment may be a breeding ground for social
misfits and those who might exhibit criminal
tendencies," she said.
According to the BPS
report, about 34.5 percent of the unemployed were young
men who were senior-high-school graduates. "This is a
disturbing trend, seeing well-qualified students not
finding meaningful employment. Is the state to be blamed
for turning a blind eye to this social problem?" said
Indrayani.
Rini Paramitha works as a nightclub
hostess in the West Jakarta. Unlike many of her peers in
the nightclub profession, she is a senior-high-school
graduate. She tried working in a metalwork factory in
Tangerang, on the outskirts of Jakarta, but it closed
down. Unable to support her family, she became a
hostess.
She says she goes out only with
customers she wants to go out with and is under no
pressure from the owner of the establishment to please
the clientele. "I have my own reasons for working in
this line. At least it's a stable income, accompanying
foreigners as a club hostess, singing karaoke songs. The
times I do decide to earn a little extra, sometimes
exceeding Rp500,000 [about US$55] for a night, I pick
and choose whom I want to spend my night with," she says
unabashedly.
The Indonesian government knows
only too well that unemployment and underemployment put
an indirect stress on the state coffers even though,
unlike Australia, Germany or the United Kingdom, which
pay out dole to citizens who qualify for social
security, Indonesia does not have any safety net for its
citizens. The indirect stress to the state coffers comes
in the form of crime and violence, which are on the
increase.
There was recently an episode in which
some students were gathered for a demonstration that
opposed the re-election of the current governor of
Jakarta, Sutisloyo. "Around 1,000 students were rounded
up from the various high schools and universities, where
each student was given around Rp50,000 together with a
meal allowance to stage a protest in front of
parliament," said Malik Arjuna, a student demonstrator
and ringleader. Traffic in the road leading to
parliament was paralyzed for a day and hundreds of
policemen were called in, as well as members of the
armed forces (TNI). Such episodes amount to a cost to
the state, which has to cover the expense of mobilizing
a protective blockade and to disperse protests that
sometimes got out of hand.
The BPS survey
sampled 18,132 households across the country. The
unemployment data here refer to open unemployment, which
the bureau defines as the percentage of people
categorized as part of the labor force who have no job
and are actively seeking work. The survey was aimed at
establishing an early-warning system for the government
to monitor the country's labor problems.
Yunita
Rusanti, head of the labor evaluation and statistical
section at BPS, said this was the first quarterly survey
published since 1994. The survey was restarted on a
recommendation from the International Monetary Fund,
which requires Indonesia to keep itself abreast of labor
problems. Independent experts, however, have estimated
the country's unemployment at more than 40 million by
including the huge amount of disguised unemployment,
defined as the number of people in the labor force
working less than 35 hours per week.
Indrayani
says the unemployment rate of 8 percent is seen as
unrealistic because it is lower than the rate in some
European countries. "This survey does not reflect the
true extent of unemployment in Indonesia and cannot be
taken as a benchmark for officials to base their
projections and estimations [on]," she said.
Although the Indonesian economy is expected to
show approximately 6-7 percent growth for 2002,
Indonesia has not recovered from the economic crisis of
1997-98. "The plain fact of the matter is companies are
not operating as before and state-run companies that
offered full-time employment to the masses are far more
selective now and, given the drain on finances, the iron
rice bowl of the Suharto era is not there anymore," said
Winatunggung Salembar, an economist with PT Trimegah
Securities.
Also given the backdrop of the
inflation rate of 8-9 percent and the weakening of the
rupiah against the greenback, the rupiah can do a lot
less than it could before. The true value of the rupiah
has dropped marginally as well, reflecting the true
nature of Indonesia and Indonesians now - weathered,
downtrodden and unemployed.
(©2002 Asia Times
Online Co, Ltd. All rights reserved. Please contact content@atimes.com for
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