Poverty rate down, will drop further: Govt

Friday, 9 January 2009

The Jakarta Post

The government claims it managed to reduce unemployment and poverty rates in 2008 and will continue to further drive the figures down this year despite the looming threat of the global financial meltdown on the country.

In a press conference in Jakarta on Thursday, Coordinating Minister for People's Welfare Aburizal Bakrie said Indonesia's unemployment rate in 2008 stood at 9.43 million people, a decline from 10.55 million people the year before.

The poverty rate, meanwhile, dropped to nearly 35 million people from 37.20 million in 2007, he added.

Although Indonesia is expected to start feeling the pinch of the global crisis this year, the government outlined its ambitious target of further reducing the unemployment and poverty rates to seven million people and 31 million people, respectively.

"The unemployment rate will be cut by 7 percent and the poverty rate by 12.5 percent in 2009," Aburizal said.

"To counter the impacts of the crisis, we have a number of programs that will directly assist the community and reduce the number of poor and unemployed people nationwide."

Aburizal said the government had allocated around Rp 50 trillion (approximately US$4.6 billion) in funding to "stimulate" the real sector and suppress the magnitude of mass layoffs amid the global crisis.

If mass layoffs cannot be avoided, the government has prepared poverty reduction programs aimed to partly employ dismissed workers, at least temporarily, until they find new jobs in the formal sector.

Among the programs are the Mandiri National Community Empowerment Program (PNPM Mandiri), which will see government funding poured into activities deemed useful for empowering the community, and the microcredit (KUR) program, where the government offers low-interest loans to micro and small businesses.

Aburizal said PNPM Mandiri successfully offered jobs to almost 41.5 million people last year, while the KUR program brought 4.6 million people back into work.

The government anticipates that PNPM Mandiri will provide job opportunities for at least 20 million more people this year, while the KUR, whose non-performing loan rate currently stands at 0.84 percent, is expected to absorb an additional six million workers in 2009.

While planning to expand the coverage of these two programs, the government has said it will not boost the number of recipients of some poverty reduction programs, including the Public Health Security (Jamkesmas) program, the direct cash assistance program and the rice-for-the poor program.

Aburizal said the figure of 76.5 million people living in poverty nationwide would not be increased under any of the programs.

He also said the direct cash assistance program, launched early last year to compensate for the fuel price increase, would expire in February as a new fuel price was adopted and has plunged ever since.

Meanwhile, deputy coordinating minister for the economy Bayu Krisnamurthi said the crisis will further reduce families' access to food and will drive up malnutrition rates in children.

"There should be a massive, long-term program to protect these children from the crisis. We don't want to lose our future hope," he told a press briefing.

At an Asia-Pacific meeting in Singapore discussing the impact of the financial crisis on children, Bayu said Indonesia had proposed a US$ 70 billion international emergency fund for children globally.

"Some countries have supported it. We hope the establishment of the fund can occur as soon as possible," he said.