Louise Williams, Jakarta – Unemployment in Indonesia has jumped by more than five million due to the economic crisis, it was revealed yesterday as the armed forces staged a show of force across Jakarta following rural food riots earlier this week.

The Manpower Minister, Mr Abdul Latief, said unemployment had risen to eight million, from only 2.5 million in mid-1997, as factories closed and construction sites laid off millions of casual day labourers.

It is the first time the Government has acknowledged the extent of the potentially explosive social crisis.

The armed forces staged exercises in the central business district and suburbs, with convoys of trucks of fully-armed riot troops fanning out into the traffic and displays by quick-response riot teams in parks and parking lots.

Rioting over rising food prices have hit 10 towns in Java and Sulawesi over the past week and small demonstrations have been staged almost daily in front of the Parliament building in Jakarta.

The armed forces promised to maintain order as retailers warned that prices would jump again by the middle of next week and the Government released figures which put price rises at a 25-year high.

The official unemployment figures are widely believed to understate the problem because people are deemed to be employed if they work for as little as one hour a week.

The Government-approved Federation of All Indonesian Workers Union warned recently that "disguised unemployment" - which it defines as having less work than needed to provide basic needs - might reach 40 million this year, or 45 per cent of the workforce.

Economists estimate that at least 4 per cent growth is needed to absorb the three million new job seekers coming onto the market every year, but the official growth estimate for 1998 is set at zero.

Mr Latief said 1.8 trillion rupiah ($A270 million) would be set aside for an emergency job creation scheme to cushion the crisis, which threatens to provoke social unrest.

The announcement followed the visit of the president of the World Bank, Mr James Wolfensohn, who pledged funding for 75 million man-days of low-wage jobs for the rest of this year.

Mr Wolfensohn visited a crowded north Jakarta slum where residents said just 5 per cent of the population had work and sufficient money to cover their daily needs.

A 51-year-old former meatball seller, Mr Pak Hendro, said he had to give up his business three weeks ago when he could no longer afford to pay the inflated prices of meat.

Now he is cleaning the filthy canals along Jakarta Bay on a Government work program, earning $1.50 a shift. "As long as I have work it is okay with me."

Danuri, an unemployed father of three, said: "We are suffering very much. My children are still at school but I haven't paid the fees; now we can hardly afford to eat."

Residents said the price of rice has increased by 50 per cent and other basics like cooking oil by even more.