Sander Thoenes – The warning calls of growing unemployment echo through the alleys and back streets of Indonesia's inner cities.
They are the cries and whistles, rattling of spoons and banging of pots of the self-employed men and women who peddle food, ice cream, plastic buckets and other odds and ends from dawn to late at night.
These men and women seem to offer far more than can possibly be in demand, but this informal sector of the economy has managed to absorb millions of Indonesians who cannot find steady jobs despite rapid economic growth. Their key to survival is the long hours they work and the speed at which they cruise through neighbourhoods to maximise turnover.
Just as these street traders cannot afford to slow down, neither can the economy. The government estimates it needs 5 per cent growth in gross domestic product to absorb the 2.4m people who enter the job market each year. The consensus of 17 forecasters last month was that the on-going currency crisis would cut growth to 4.2 per cent in 1998, against earlier predictions of 7.6 per cent. Some economists say the continued fall in the rupiah makes this estimate optimistic and warn of stagnation.
The International Labour Organisation (ILO) warned last week the slowdown in south-east Asia could spark social unrest as millions lose jobs and others see inflation eat away their purchasing power. Nowhere are risks more obvious than in Indonesia, the region's largest country with 200m people, which has experienced strikes and riots in growing numbers in recent years.
This month 50 large Indonesian enterprises asked the government for permission, which is obligatory by law, to put off 10,000 workers. More than 8,000 workers lost their jobs when 15 troubled banks were shut down and construction companies have already told thousands of day labourers not to come back. Thousands of Indonesian migrant labourers are being sent home from Malaysia and Thailand, which face similar economic problems; more than 10,000 are being evicted from Saudi Arabia. Farmers, who still represent more than half the workforce, have seen their harvests crippled by drought.
Officials say unemployment in the capital rose from 4 per cent in 1996 to 6 per cent in October of this year; the last nationwide estimate dates back to 1995, at 7.24 per cent. Unemployment statistics understate the problem, however, as a person is considered employed if he works one hour a week; by most estimates, more than 30 per cent of the population was under-employed even before the currency crisis.
The government is aware of this challenge and has pledged to give priority to labour-intensive industries for subsidies in next year's budget. They have vowed to protect workers from arbitrary dismissal but realise that many debt-ridden enterprises could go under if they do not shed workers. Indonesia's enterprises, many of which were hit by the 47 per cent depreciation of the rupiah which boosted the cost of imports and of servicing offshore loans, will be hard pressed to pay wages for those who held on to their jobs, let alone index wages to inflation. Prices rose 1.65 per cent in November - food prices rising even faster. Consumer prices were up 9.01 per cent in the 11 months to November.
"It's brewing in the regions," said one labour activist from Sumatra. "Prices are going up and wages are as miserable as ever." The minimum daily wage equals $1 in many regions. Workers have gone on strike to demand wage increases at some of Indonesia's largest factories, such as the Gudang Garam cigarette factory in east Java, which employs 40,000 people. They have walked out of textile and shoe factories that account for much of Indonesia's non-oil exports.
Labour activists say strikes and riots are most likely to escalate on the eve of orchestrated presidential elections in March, which should extend President Suharto's 30 year rule by another five years. "The real reaction of the workers will come in December and January," predicts Teten Masduki, a lawyer who defends workers in labour conflicts. "Even when there is no monetary crisis, prices rise in these months. It is the time of Ramadan [the Moslem month of fasting], and that is when companies usually pay a special bonus. Normally, many companies do not want to pay the bonus and that is when workers strike. Thirty per cent of all strikes occur during Ramadan. This year it will be much worse."
The street trade may not be able to absorb the unemployed this time. Unemployment is highest among the young and educated, who balk at menial jobs. And in recent weeks the number of vendors has dropped sharply, with traders blaming the start of the rainy season and rising inflation.
"It's more difficult than before. Many of us have gone back to villages to resume farming, but I do not own any land so I don't have a choice," one trader said.