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SMERU finds incomes shrink for 75% of Indonesian homes in 2020
A SMERU Research Institute survey shows that impacts of COVID-19 on Indonesian households have been "very severe" and "likely to continue" this year.
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A hawker opens for business across shuttered shops on a side street. (JP/Boy T. Harjanto) (JP/Boy T Harjanto)
T
hree out of four Indonesian households experienced an income reduction last year as breadwinners either lost jobs, switched to informal jobs or closed businesses during the pandemic while government assistance for small businesses remained limited, a recent survey has found.
The majority of the affected households were located in urban areas and had school-aged children whose education and mental health were strained, according to the joint survey by the SMERU Research Institute, the United Nations Development Program (UNDP), the United Nations Children’s Fund (UNICEF) and the Australia-Indonesia Partnership for Economic Development (PROSPERA).
The survey involved 12,216 households and was conducted from October to November 2020 in all 34 provinces in the country.
“This survey confirms that the impact of the COVID-19 pandemic has been very severe on household finances and is likely to continue in 2021,” Athia Yumna, SMERU’s deputy director of research and outreach, said at a virtual launch of the survey on March 4.
Citing an estimate from UNICEF, she added that the pandemic’s impact on households with children could push more than 2 million children into poverty.
The survey sheds more light on what happened behind the scenes in Indonesian homes as household consumption contracted 2.63 percent in 2020, driving the country to its first annual gross domestic product (GDP) contraction since the 1998 Asian financial crisis.
Statistics Indonesia (BPS) data shows that the economic fallout from COVID-19 also increased the poverty rate by 0.97 percentage points year-on-year (yoy) to 10.19 percent in September 2020, undoing roughly three years of progress. The urban poverty rate saw an annual increase of 1.32 percentage points, more than double the increase in rural poverty.
