10/20/2020, 13.31
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COVID-19: poverty rises despite government efforts

by Ati Nurbaiti

Only 43.8 per cent of the US$ 47.4 billion allotted have been spent. About 28 million Indonesians are destitute. Women-headed households are an issue. Thousands of Indonesians protest against new labour law.


Jakarta (AsiaNews) – Poverty and unemployment are increasing in Indonesia despite the government's efforts to counter the negative effects of COVID-19.

Millions of Indonesians who lost their main source of income are not eligible for cash transfers, food aid and other types of support.

They include workers and the self-employed in the informal sector, which absorbs most of the 131 million-strong workforce, families who have stopped receiving remittances from relatives forced to return from abroad, and women head of household.

According to Statistics Indonesia, the coronavirus has increased the number of poor families in the province of Java, where the infections first started spreading, followed by tourism-dependent Bali.

Divorce is also up. The Islamic Religous Affairs Office in Surabaya (East Java) has seen divorce applications jump to 40 to 50 per day, filed mostly by wives citing economic reasons.

With unemployment estimated to be around 10 million people by the end of 2020, and at least 28 million people living below the official poverty line of 454,652 rupiah (roughly US$ 31) per month, more people are expected to become even poorer before the New Year.

Every year about three million new jobseekers enter the labour market. “Those who cannot find work in the formal sector have had to open their own businesses to feed their families,” writes Cooperatives and Small and Medium Enterprises Minister Teten Masduki on Kompas daily. 

In early October, President Joko "Jokowi" Widodo said that 76 per cent of the 123.5-trillion rupiah (US$ 8,4 billion) in recovery funds allotted to enterprises had been spent. However, only 43.8 per cent of total recovery funds of 695-trillion rupiah (US$ 47 billion) was actually used.

Spending on social security reached 74 per cent of the available funds, but health expenditure – which also includes the cost of vaccines – reached only 25 per cent.

A country of nearly 270 million inhabitants has only 1.3 physicians per 10,000 people, with fewer health services outside the island of Java. From March to October, 136 doctors, including 63 specialists, 92 nurses and other healthcare workers, died from COVID-19.

Experts urge faster, more flexible distribution of aid, despite the risk of giving it by mistake to those who are not entitled to it. "With a massive number of vulnerable people and borderline poor, an economic shock like a recession would drag them into poverty," Finance Minister Sri Mulyani Indrawati recently said.

In January, before the outbreak of the pandemic, the World Bank had reported that Indonesia’s aspiring middle class could have expanded from 52 to 115 million by improving secondary education.

Since they could only spend 532,000 to 1.2 million rupiah (US$ 36 to 84) a month per person before the pandemic, this goal is now unattainable.

Last year, over 3.7 million overseas migrant workers sent home US$ 10.9 billion, revenue that disappeared with their return.

Then there is the problem of 11 million female heads of households. A study published in September found that these households tend to be poorer than those headed by men.

The Women-headed Household Association (Pekka) said that many women who are widowed, divorced or abandoned by their husbands do not benefit from government support, which is mostly given to male-headed households.

One of these women, Sari (not her real name), takes care of her sick mother. She was abandoned by her husband and survives by selling homemade snacks.

A friend of her told AsiaNews that she would like to make it on her own, but she needs public support. “Yet she asked if she could borrow just 100,000 rupiah (US$ 6.79) for medicine, so she must be really desperate.”

Backers of a controversial job creation law, passed earlier this month, say that unemployment and poverty can be prevented with more flexible and less costly firing and hiring procedures, with more opportunities for contract work and foreign investment.

However, students, trade unions and civil society groups are opposed to such a measure. They want it repealed since it weakens labour, environmental and transparency standards.

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