11/20/98 - Indonesia Fact Sheet

Background: Reason for Crisis The demonstrations which took place in Jakarta recently are a symptom of a larger set of issues. Over the past year, Indonesia has faced a number of huge setbacks. These include the effects of El Nino, which resulted in a failure of the rice harvest; Political upheaval, which resulted in the departure of President Suharto; and an economic crisis which has resulted in widespread poverty and hunger.

As a result, 38 percent of Indonesia's working population is now unemployed. But, when the informal economy (such as street vendors or fish farmers) is taken into account, the unemployment rate is closer to 59 percent, according to government statistics. By the end of 1998, it is expected that the number of people living below the poverty line will have tripled. Urban poverty will have increased by 214 percent, also according to government statistics.

In the city of Jakarta, poverty has increased by 372 percent, from more than 200,000 to 860,000 people in June 1998. Due to the deteriorating buying power from inflation of some 80 percent -- more than 180,000 people -- are unable to afford basic necessities in Jakarta alone.

What is new here is that many of these people are what are being called the new poor. These are factory workers and hard working vendors who are now living in poverty.

The result: Hardly an area has been left untouched by the situation . . .

• Significant increase of beggars on the street
• Increase of street children asking for money at street corners
• Fish farmers are unable to purchase food for fish farms which has pushed them into poverty
• Families eating two meals a day in stead of three
• An explosion of street vendors and traditional street restaurants as unemployed people begin small businesses to support their families
• Departure of Indonesians business people of Chinese descent as they become scapegoats for economic problems
• Sky rocketing prices for staples, like milk or rice
• Return to traditional harvesting methods such as scavenging from the forest
• Rural men moving from country to towns in search of jobs
• Urban unemployed returning to traditional family villages which has created overcrowding and social upheaval
• Hundreds of thousands of children dropping out of school to supplement the family income. Countrywide drop-out rate is more than 30 percent as a result of the economy.
• 60 percent increase of transportation costs, hurting businesses, commuters, farmers and family movements
• Increase of child laborers and prostitution.
• Mothers report their milk drying up from malnutrition, forcing them to feed tea to their children as a result of the high cost of milk or formula.

Copyright 1999 World Vision Inc.