The Jakarta Post
The share of Indonesians who say the economy has worsened over the past year has reached a record high.
Public opinion pollster Saiful Mujani Research and Consulting (SMRC) found that 92 percent of the respondents surveyed from May 12 to 16 believe Indonesia’s economy is worse than in 2019. That number reflects the highest negative sentiment since the survey began in 2003, or five years into Reform Era.
The highest previous spike of such sentiment was 58 percent in mid-2008, when the global financial crisis unfolded.
But the share of respondents with that bleak view slightly declined to 85 percent in the latest survey from June 18-20.
“We can say that Indonesians’ optimism is now in its worst shape,” Ade Armando, the director of communication at SMRC, said in a virtual briefing on Thursday. “Now that it has reached 85 percent, there is a sign of more optimism in June.”
The survey comes at a time when countries around the world are trying to re-emerge from lockdown as the pandemic prompted international institutions to keep revising down forecasts for growth globally, including in Indonesia.
In its June forecast released earlier this week, the International Monetary Fund (IMF) projected a 0.3 percent contraction of Indonesia’s economy this year. The fund also slashed the country’s growth forecast by 2.1 percentage points to 6.1 percent next year.
With millions of job losses, the pandemic has slowed the country’s growth to 2.97 percent year-on-year in the first quarter, the lowest since 2001, as people lost their income and did not spend as much.
SMRC described a similar picture. Only 34 percent of the respondents said Indonesia’s economy would be in better shape next year.
However, that marks a slight increase in the share of respondents with an optimistic outlook from 27 percent during the record-low in May, as some provinces and cities started easing restrictions and reopening businesses.
With the coronavirus restrictions hitting economically disadvantaged groups hardest, they showed greater support for the government’s policy to transition toward a so-called new normal, or reopening the economy while implementing health protocol.
The share of Indonesians who said the country should transition toward the new normal right now stood at 83 percent among those with income below Rp 2 million (US$141.32), higher than among those with income levels above that.
By educational background, the share of Indonesians who said the new normal transition should be delayed was highest among workers with a college degree at 22 percent and lowest among those with elementary school or lower background at 12 percent.
Chatib Basri, who served as Finance Minister from 2013 to 2014, said Thursday that support for delaying the new normal transition among elementary school graduates was lower, because most of them were informal workers, whom the pandemic hit disproportionately.
The National Development Agency (Bappenas) reported that the pandemic affected trade, manufacturing, construction, transportation and warehouses, accommodation and the food and beverages sector. The proportion of workers with an elementary school background accounted for between a quarter and one-third of the total labor force in each sector, according to SMERU Research Institute.
“The large-scale social restrictions is a policy biased toward the middle class if there is no social protection, as the majority of Indonesians are informal workers,” said Chatib.
“Staying at home is a luxury,” he added. “It is more costly than going back to work despite the risk. And the lower class prefers to go back.”
Rosan Roeslani, the chairman of the Indonesian Chamber of Commerce and Industry (Kadin), which oversees 200 business associations, said Thursday that the number of affected workers reached 6.4 million as of late May. The number is more than double the Manpower Ministry’s official tally at 3 million or 2.3 percent of the national workforce.
He said most of them were furloughed and only 10 percent of them were laid-off, since firms could not afford the severance pay.
“The survey is consistent with our observation,” said Rosan. “But businesses know that even if we ease the restrictions, it is still a long way to recover to pre-COVID-19 levels, because productivity will definitely decline due to physical distancing.”