Unemployment figures in Indonesia at present may exceed 7 million people if the number of people who have lost their jobs due to COVID-19 are included, based on estimates provided by Indonesia’s statistics agency (BPS).
As of February, BPS data revealed that the number of unemployed people in the country had reached 6.88 million — 60,000 more people compared to the same period last year.
BPS Chief Suhariyanto said in a video conference on 6 May that in comparison to job vacancy advertisements which are “relatively stable from January to February”, the number of such ads “declined in March, and they dropped drastically in April”.
Should the pandemic end in May, Indonesia’s open unemployment rate will stand at between 4.8 and 5 per cent, the BPS added.
However, if the situation continues until August, the unemployment rate can reach more than 4.8-5 per cent.
Banten province recorded the highest unemployment rate at 8.01 per cent, followed by West Java and Maluku at 7.69 per cent and 7.02 per cent, respectively.
Graduates of non-vocational schools contributed 8.49 per cent to the national unemployment rate as of February this year. However, the figure dropped compared to the same month last year.
Which sectors are the hardest hit by COVID-19?
Manufacturing, hospitality, tourism, and retail are the most affected by the pandemic, as the outbreak has forced the temporary closure of factories, malls, and hotels.
In Cianjur, West Java, around 42 factories had been closed, leading to the furlough of thousands of workers, Republika wrote on 1 May.
Indonesia’s Hotel and Restaurant Association (PHRI) recorded that 2,000 hotels have been closed as of May 2020.
As of 19 April, over 6,800 restaurants located in malls across the archipelago had ceased their operations, according to PHRI data.
A public relations officer at a restaurant in Central Jakarta told a TOC correspondent that she has been working from home since two months ago as a result of the pandemic.
“We have our salaries cut. The restaurant’s operations have been disrupted. The owner has a travel bureau for the hajj pilgrimage, and as Saudi [Arabia] has suspended hajj ... We don’t know when the situation is back to normal,” she said.
What’s the solution?
Deputy of the Indonesian Employers’ Association (Apindo) Shinta W. Kamdani said that should the unemployment rate remain high and economic stimuli to boost purchasing power do not work, the post-pandemic economic recovery will not succeed.
“Should the pandemic continue after the second quarter of 2020, the real sectors will find them difficult to rebound. At least, it takes a year, and it can be longer to recover purchasing power and people’s confidence for consumption at a domestic level,” she told Bisnis on Tuesday (5 May).
Fresh capital injected to COVID-19-affected sectors is urgently needed to help those industries to survive, Shinta added.
Indonesia should provide a clear mapping of the recovery effort to help the economy to rebound, Deputy of the Indonesian Chamber of Commerce and Industry (KADIN) on Manpower, Anton J. Supit opined.
He told Bisnis that China, as an example, needed three months to mitigate the effects of the pandemic, which has contracted the country’s economy and industry up to 35 per cent.