Enemployment, poverty to reach alarming level

JAKARTA (JP): An average of almost 15,000 workers will lose their jobs every day this year and two out of three Indonesians are likely to be living below the poverty line in 1999, the International Labor Organization (ILO) warned on Monday.

In a report titled Employment Challenges of the Indonesian Economic Crisis, the organization presented a profoundly gloomy picture of the situation in the country due to the economic crisis.

"A year after the economic crisis began to unravel in Indonesia, the country's economy still continues to collapse in almost all sectors," the report said.

"Assessment of the economic wreckage from the crisis and the mid-May riots indicate that unemployment is skyrocketing and income levels are eroding.

"Meanwhile inflation and the erosion of purchasing power are pushing millions more below the poverty line," the ILO said.

It predicted a total of 5.4 million people would be fired by year's end.

The report is in line with earlier findings from the Central Bureau of Statistics (BPS), which said in July that the number of Indonesians living below the poverty line had soared to 79.4 million, about 40 percent of the country's population of 202 million,

The bureau warned the figure would increase to 95.8 million -- about 48 percent of the total population -- by the end of this year if no economic recovery was in sight.

In its report, the ILO described the situation on the poverty front as "dismal", going further than the BPS in warning that by 1999 the poverty level would be comparable to the dire situation in the 1960s.

"Stagnant wages and incomes in nominal terms, together with high inflation, have brought 37 percent of the population, around 75 million people below the poverty line by mid-1998 ...

"Without any improvements in household income, further price increases in 1999 will push some 140 million, or 66 percent of the population below the poverty line," the report said.

The employment task force report was commissioned by the United Nations system in Indonesia and led by the ILO office in Jakarta.

The report appraises the impact of the government's labor intensive programs, and also the social implications of the International Monetary Fund's (IMF) reform program for the country.

It underlined the necessity of establishing a social safety net to respond to problems of unemployment and worsening poverty.

"The ILO stresses the importance of tackling both the short term consequences of the economic crisis as well as medium and long-term solutions to deal with the problems of unemployment and under-employment."

It proposed short-term employment and income support strategies, including expansion of labor-based public works programs, deregulation and promotion of the informal sector.

The report also suggested "partial subsidies for basic commodities and support for basic health, nutrition and educational services targeted at the poor".

The report was jointly launched Monday by ILO official William D. Salter and Ravi Rajan, the resident representative of the United Nations. (prb/rms)