Sumiyati: There Will Be A Surge In Unemployment And Poverty During Indonesia's Recession

Illustration. (Angga Nugraha / VOI)

JAKARTA - The Ministry of Finance has revealed that there will be a surge in unemployment when Indonesia enters the brink of recession. Along with that, the poverty rate will also increase. This is because Indonesia's economy has contracted deeply in the second quarter and it is estimated that growth will continue to be negative until the end of the year.

In economics, a country can be said to be experiencing a recession if its economy is negative for two consecutive quarters. The determinant whether Indonesia will enter or not be in the brink of recession is in the third quarter of this year. If the third quarter of this year economic growth is still negative, then Indonesia will officially have a recession following Singapore, Japan and the United States.

Inspector General of the Ministry of Finance (Kemenkeu) Sumiyati said that the economic recession that Indonesia will experience will also affect the social and economic conditions of the community as a whole.

"Unemployment and also the poverty rate are expected to rise quite significantly where poverty is likely to increase by around 3.02 percent to 5.71 million people," he said, at the APIP-SPI-APH Supervision Synergy National Seminar on a virtual basis, Tuesday, September 29. .

Meanwhile, said Sumiyati, the unemployment rate increased by approximately 4 percent to 5.23 million people. Sumiyati said, to mitigate the impact of COVID-19 on people's welfare, an extraordinary policy is needed to keep the social and economic impacts caused by the pandemic from developing to be very heavy and sustainable.

According to Sumiyati, the government has responded to the impact of the COVID-19 pandemic by issuing various policy packages since the issuance of Perppu No.1 of 2020 which has become Law No.2 of 2020.

"Likewise PP No. 23/2020 concerning National Economic Recovery (PEN) and this is continuously adjusted to the dynamics that are occurring in Indonesia and globally," he said.

Previously, the Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Rosan P. Roeslani said, with the risk of a recession, the number of unemployed in Indonesia would increase to 5 million people. Currently, there are approximately 7 unemployed people.

On the other hand, every year in Indonesia there are an additional 2.24 million people who need new jobs. In addition, based on current employment data there are 8.14 million people who are underemployed and 28.41 million part-time workers. Thus, there are at least 46.3 million people who do not work fully.

"Or 33.59 percent, this figure is quite new, and from the Ministry of Finance's data, there will be an additional 4 million to 5 million unemployed due to COVID-19," Rosan explained.