Louise Williams, Jakarta – For fifteen days Pak Waska has been ready: waiting under the vast, concrete highway overpass, his work bag packed, his shirt neat and clean, the thick fumes of the crawling traffic swirling around his face.

It was here in the long boom years that developers would come looking for day labourers for the thousands of new construction sites around Jakarta. The men would pour off buses from rural villages and gather in the shade under the new tollway, brimming with enthusiasm for the opportunities that lay ahead.

With Indonesia's currency, the rupiah, now at an all-time low and much of corporate Indonesia on the brink of defaulting on their debts, the work has dried up.

The Association of Indonesian Contractors confirmed yesterday that almost half of the 4.3 million day labourers in Jakarta had lost their jobs in the construction industry in the past three months, with another 500,000 more losing their jobs with companies that deal with property. A chief executive of one of Indonesia's largest companies said this week that 10 per cent of jobs would be shed in the corporate sector, meaning a loss of hundreds of thousands of jobs.

Even with an International Monetary Fund rescue package due to be announced today, most economists believe recovery in Indonesia will not begin until late next year.

So, now the men live under the overpass, merely waiting: their beds marked out in rows of cardboard squares, a filthy canal their bathroom, a rope strung up to dry their clothes. With no income, they have been reduced to begging for food on credit from the noodle and rice hawkers at the bus stop across the road.

At least 150 people now live here under one slab of concrete. Some, they say, have been waiting for 40 days for work. They have no money left to go home and Indonesia has no unemployment benefits.

This is the real impact of the region's currency crisis, and the beginning of what may turn out to be critical social problems for the Soeharto Government. One recent report said 7,000 people a day were pouring into Jakarta, looking for jobs that were no longer there. Jakarta city officials say thousands of new beggars and vagrants are appearing on the streets as development projects in rural towns are frozen due to the financial crisis.

One Jakarta city official said: "Unemployed people tend to behave badly because they are frustrated and do not have anything to do. This situation could lead to riots, if there are sensitive issues such as the gap between the rich and poor."

Indonesia's booming property sector, heavily exposed on massive US dollar loans, has been hit hard by the rupiah's depreciation of more than 35 per cent since August. Some industry sources say 60 to 80 per cent of Jakarta's developers will be forced out of business by the end of the year.

Pak Waska, a father of four, said: "I have been waiting for 15 days but there is no work yet, I can do any work. I just have to keep waiting; my wife and my children are depending on me.

"I can't go home now because I have no money for the bus fare. It is terrible here. I don't know why this is happening. We are simple people. This is the Government's business."

Another young worker disagreed: "This is because of the high value of the US dollar. I have read about it in the newspaper."

The impact of the slide in the rupiah's value is starting to be felt right across the board. The prices of all imports, or products with an imported component, are soaring. Medicine went up 15 per cent this week and big increases in the price of building materials have added to the construction industry's woes. Lay-offs in manufacturing are also expected as large companies cut back costs to service their debts.

Hoarding and speculation is also sending the prices of local foodstuffs spiralling. Rice has increased since the currency crisis began in August by as much as 40 per cent in the outer islands. Figures released for Jakarta yesterday show a 25 per cent increase in the price of cooking oil, 11 per cent for chilli and almost 8 per cent for rice - all three staple items. Political analysts are already warning that a protracted economic crisis could lead to serious social and political unrest.

An economist, Ms Marie Pangestu, said of the economic slow down, increased unemployment and inflation: "Everyone is being asked to take the pain. We are looking at a very tense period politically if the Government does not anticipate the impact on ordinary people and we could have some very serious [social] problems by early next year."

At the same time, Indonesia is facing what may be the most severe drought on record. A new United Nations assessment says "real hunger" and deaths can be expected in the next three months, following recent weather predictions which say monsoon rains may be delayed another three months. In rural villages crops cannot be planted and widespread crop failures are expected to hit by the beginning of next year.

Pak Hardi, a father of six, said: "There is no work in the kampong [village], we can't grow anything because of the drought and we even have to buy water. There is [no] reason to stay."

The United Nations Economic and Social Commission for Asia and the Pacific said: "In the coming three to four months you will have real hunger, increased infant mortality and increased mortality."

At another construction site across the city work is slowing.

Everyday, the workers say, prices are rising because of the currency crisis and the drought.

One said: "It is like someone is playing with the prices; they are rising every day. Lots of subcontractors run away because they can't pay their people and can't pay the suppliers. People are very frustrated now.

"If there is a demonstration in front of Parliament we will go and join it."

An editorial in the Jakarta Post newspaper yesterday said: "The picture is gloomy and the number of workers losing their livelihood has already reached dangerous proportions. Those who have lost their jobs cannot expect to regain them in the near future."

Even within the air-conditioned halls of the luxury Plaza Senayan, the mood is glum.

Indonesia's nouveaux riches have been reduced to window-shopping. The price of imported luxury goods has already increased 15 per cent this month. Interest on home and car mortgages is now close to 30 per cent. Everywhere, shops are almost empty, with banners proclaiming sales.

A man in the office relocation business said companies were cancelling plans because they were paying rent in US dollars and could not afford anything else.

A political analyst, Ms Dewi Fortuna Anwar, warned: "If this goes on much longer we could see a lot more political dissatisfaction."