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.