Four Million Indonesians Seek Jobless Funds While Virus Spreads

(Bloomberg) --

As many as four million Indonesians filed for jobless allowances under a national program within three days of its launch as companies impacted by the spreading coronavirus pandemic fired scores of workers in Southeast Asia’s largest economy.

Eligible applicants will be entitled to 3.55 million rupiah ($227) over a four-month period to improve their skills through vocational training, Denni Puspa Purbasari, an official supervising the pre-employment card program, told a news conference in Jakarta on Tuesday. Applicants, who are 18 years, or older, and not attending any formal education, workers or small and medium size entrepreneurs affected by the outbreak, will receive the allowance, he said.

The plan, mooted by President Joko Widodo last year to up-skill the nation’s workforce, is now being expanded to shield the poor from the fallout of the outbreak that’s killed 459 people in the world’s fourth-most populous nation. The pandemic, which has infected almost 5,000 Indonesians and forced several businesses to close due to stringent social distancing rules, has left an estimated 2.8 million people jobless.

“It’s a response to the Covid-19 outbreak and as a social safety net to ease the burden and preserve the purchasing power of the people,” Purbasari said.

Indonesia has one of the biggest work-forces in the world, which at 127 million is larger than the combined populations of Italy and the U.K. But 56% of people with jobs, about 70 million, are in informal employment with little or no safety net, leaving them severely exposed in an economic crisis.

The worsening outlook may push an estimated 1.1 million people into poverty and the number may rise to as high as 3.78 million with about 5.2 million people being rendered jobless under a worst-case scenario, Finance Minister Sri Mulyani Indrawati said.

To mitigate the impact, Jokowi, as the president is known, has set aside billions of dollars to boost cash and food handouts to low income groups and the jobless. The president said his administration is prepared to raise the budget deficit target beyond the current goal of 5.07% of gross domestic product if the pandemic lasts longer than six months.

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