Millions of Indonesians likely to fall into poverty, unemployment
Jakarta (VNA) – Millions of Indonesians may fall
into poverty and unemployment as the COVID-19 pandemic batters the Indonesian
economy, according to Indonesia’s Finance Minister Sri Mulyani Indrawati.
Under the “bad” scenario, the Southeast Asian country would
see more 1.1 million poor and 2.9 million unemployed people. The worst-case
scenario projected 3.78 million people would fall into poverty and 5.2 million would
lose their jobs.
Statistics Indonesia (BPS) data showed that the country’s
unemployment stood at 7.05 million out of the workforce of 133.56 million last
year. Meanwhile, 24.79 million people lived in poverty – 9.22 percent of the
population – a decline of about 880,000 compared to the year before.
In a severe situation, it is possible that Indonesia’s
growth will fall to a negative level, hereby affecting its social and
development conditions, Sri Mulyani said during a livestreamed briefing after a
Cabinet meeting on April 14.
The government has projected that Indonesia’s GDP growth
will shrink to a 21-year low of 2.3 percent this year under the baseline
scenario, and the economy could even contract 0.4 percent under the worst-case
scenario.
The World Bank recently slashed Indonesia’s economic growth
projection from 5.1 percent to 2.1 percent this year as a result of the
pandemic. It also projected more than 11 million people could fall into poverty
in the East Asia-Pacific region, a stark contrast to its earlier forecast that
economic growth would be enough to lift 35 million people out of poverty this
year.
As many as 2.8 million Indonesian people had lost their jobs
as of April 13, according to data from the Manpower Ministry and the Workers
Social Security Agency. More than half were furloughed and placed on paid or
unpaid leave.
In addition, about 70 million informal workers were at risk,
as they had lost their incomes as a result of social distancing rules.
Indonesia has earmarked 436.1 trillion IDR (26.36 billion
USD) in funding, equivalent to 2.5 percent of the country’s GDP, for stimulus
packages focusing on health care, social protection and economic
recovery programmes./.