Employees of closed banks struggling to survive

Employees of closed banks struggling to survive

By Mehru Jaffer

JAKARTA (JP): Until recently. 31-year-old Ingrid Novita seemed
to have not a care in the world. Both she and her husband worked
in banks. Naomi, their three-year-old daughter, and little
Philip, newly born, are Ingrid's cherished children.

Then one day, while still on maternity leave, she heard that
her bank was one of the 38 banks earmarked for closure on March
13. Her baby was only eight days old when she realized that,
overnight, she had joined the swelling ranks of Jakarta's
jobless.

Ingrid is just one of the 17,000 people whose livelihood is
affected by the recent closure of banks. In her Mashill Bank
workplace alone, Ingrid believes 800 employees will soon be
jobless, from a total of 1000 employees in the good old days (200
were made redundant last year).

Sitting at her parent's home, Ingrid is in deep thought
pondering her future: what next?

It is a million dollar question at a time when the economic
slump provoked by the financial crisis is creating massive job
losses. In the absence of any meaningful social safety net,
including unemployment benefits or other social assistance, the
vast majority of displaced workers are left to fend for
themselves during these distressing times.

A steep rise in inflation has not helped, especially in the
context of a debilitated labor market that is extracting a
further toll in terms of falling real wages and incomes that have
pushed a large number of people under the poverty line.

Mercifully, Ingrid's husband is still employed. They purchased
a home for about three million rupiah and till the arrival of the
krismon (crisis) were happy with whatever they had. But along
with the krismon has come bloated inflation which has greatly
reduced the purchasing power of salaries. Combined with
unemployment, inflation has become a lethal cocktail that is
provoking large scale social unrest and instability, clouding the
lives of millions of people. The same millions who once stood as
proud pillars of the economic miracle are reduced today to
innocent and bewildered victims of the sudden economic collapse.

"A human disaster of this scale is shocking to behold," writes
Eddy Lee of the Geneva based International Labor Organization in
his book, The Asian Financial Crisis. "What can millions of job
losers and the new poor expect by way of social relief?" Lee asks
in one breathe and answers in the next "Very little".

After graduating in economics from Jakarta's prestigious
Christian University, Ingrid looked for a job and easily found
one in a bank in 1991. "In those days the easiest jobs going were
to be found in the banking sector," she recalls.

Over the years, she came to realize the fragility of the
banking system, as she saw files of bad debts collect on her
office shelf. But she never ever dreamt that her bank would be
closed on this account.

"Other banks maybe, but not mine," was her line of reasoning.
Her attitude was perhaps shaped by a protracted period of job
opportunities in Jakarta, making the shock redundancy even harder
to bear. Another reason was the absence of serious recessions or
economic crisis in the country. As a result, unemployment was
virtually unknown.

Before the economy slumped, Jakarta enjoyed high rates of
employment over a sustained period of at least two decades. This
enviable employment growth mainly in the modern sectors of
manufacturing, construction, and a variety of service activities,
offered a steadily expanding opportunity for everyone, especially
peasants, agricultural laborers and those engaged in low-
productivity informal sectors where wages and benefits remained
far superior to opportunities available in rural areas.

At least properly qualified people, like Ingrid, can still
afford the luxury of thinking that they can find some way to make
money to survive. "But it is the general staff of petty clerks,
laborers and receptionists for whom I feel really sorry," Ingrid
confesses. For these unskilled people, unused to a competitive
work environment, a job loss is a lapse into worse poverty than
before, as urbanization has destroyed much of the community life
of traditional societies which they left behind to seek a life in
the city.

It is Ingrid's mother, Minta, who feels most pained to see
three of her five children lose their jobs to the krismon. Daisy,
the eldest, is still contesting her firm for improved
compensation. Her husband struggles with his new business to
ensure that their two children aged 15 years and seven years
continue to get a decent education. Minta's only son, an
accountant with a transport company also lost his job.

Ingrid adds to her woes when she expresses impatience for her
post-pregnancy confinement to be over, so that she can join her
colleagues on the streets to demonstrate for better compensation
from owners of the defunct banks. Ingrid needs all the money she
can get to start her own business.

Hers is perhaps a model family, that along with millions of
others, made the economic miracle a possibility in Indonesia. Her
parents joined the exodus of migrants who came pouring into Java
from other islands to improve their prospects. In the early 1970s
her family left its coffee plantations in the interior of North
Sumatra, and after a short assignment in the Philippines, settled
down in Jakarta to an upwardly mobile middle class life.

All five children were given the best possible education
available in the city and then sent out into society to join the
newly emerging class of youthful professionals.

"The youngest two children even got to study abroad, as my
parents had saved up some money by then," says Ingrid. She
herself took leave of absence from her job at the bank to live in
Canada for nearly a year. Now it is her friends abroad who are
helping Ingrid out by buying Indonesian handicrafts and textiles
exported by the intrepid former bank employee.

Ingrid's siblings refuse to allow the crisis to get the better
of them, perhaps because they are always made to feel welcome in
their parents' home. The unconditional hospitality is a big boost
to their morale in these times of widespread misery. For Ingrid,
her greatest support is derived from her family. Problems are
aired and solace is gained from her father's advice that his
children must keep their chins up, not make the pain personal.

"You have to look at the tragedy at the macro level. It is not
just you, everybody is affected. The whole nation is affected,"
her father repeats, perhaps in the hope of keeping the tempers of
his youthful children in check.