Max Lane
The Indonesian government's policy, announced last month, of giving a A$40 handout to people on an income of less than $25 per month as compensation for rises in fuel prices was only due to last for a few weeks, yet was supposed to help people out over a three-month period. The resulting queues for the cash handouts, attacks on neighbourhood heads for not issuing vouchers for handouts, and the scramble to be registered as poor to be eligible for the handouts have faded away. It is not clear whether there will be another round of handouts in two months' time.
Yet the impact of the 126% rise in the price of petrol and the 300% rise in the price of kerosene continues to be felt. Both price increases were urged by the International Monetary Fund (IMF) and the World Bank. Indonesian newspapers carry daily reports about the impact on the living conditions of the mass of the people. There has been no increase in wages to help cover the 17% inflation since the price rises.
According to a spokesperson for the Central Bureau of Statistics (BPS), 10 million people — 2.5 million families — have dropped below the official poverty line in the course of one month. The previous poverty line was Rp175,000 ($25) income per month, but with a 17% inflation rate this has risen to Rp216,000 ($30). While Rp216,000 is being used as a measure of poverty, the minimum wage in Jakarta is about to be set at Rp819,100 ($110). If the handouts to the poor resume in two months, there will be another few million people eligible. Seventy million people now qualify in a population of 230 million. Since the scheme began in October, the BPS says that 10.6 million people have registered for the handout.
On November 15, the Kompas daily newspaper carried an extensive report detailing how workers' wages can now be eaten up by transport costs. In Surabaya, the reports detailed, 50% of wages could be taken up by transportation. The workers described how they now had to get off the bus or other public transport half way to work and walk the remaining kilometers on foot. The same article reported similar or even worse effects in other cities in Java, Sumatra and Kalimantan.
Waras Warsito, the West Java deputy chairman of the National Workers Union, told Kompas that there had been a flood of workers seeking to borrow money from the factory cooperatives just to buy daily necessities, which meant that on pay day they ended up with only half their salary.
Meanwhile, the BPS also announced that unemployment has grown steadily at 5.5% every year since 1996. Some 1.9 million people have come onto the labour market every year, unable to find real work. The National Development Planning Board estimates that unemployment has been growing at 9.5% annually.
The November 15 Kompas also reported that 4400 workers were laid off in a Plywood sawmill in East Kalimantan. The same day, the paper reported that 30,000 workers in an industrial estate in Medan, North Sumatra, were soon to lose their jobs as the factories announced they would have to close down due to the increase in fuel prices and the electricity shortage.
On November 17, Kompas reported that another 20,000 workers were laid off in the finishing industry as 200 tuna fishing ships were stuck in port, their owners no longer able to pay for fuel. Meanwhile in Banten, West Java, the fisheries department reported than 19,000 of 26,000 fishers in their region could not afford to take their boats out. It cost Rp200,000 ($27) for enough petrol for one trip out and they could only expect to make that amount in total per trip.
Farmers have also been hit. Kompas reported a case of farmers in Bekasi, just outside Jakarta, ripping out acres of spinach. Kompas reported piles of rotting spinach along the roads. The farmers reported that increases in the price of inputs since the fuel price rises have meant that it is no longer profitable to keep the spinach in the ground. Inputs increased drastically, while the price of spinach fell 75%, farmers told the newspaper.
From 91×ÔÅÄÂÛ̳ Weekly, November 23, 2005.
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