Indonesian Chamber of Commerce Projects 40% Income Decline due to Covid-19
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25 September 2020 12:35 WIB
TEMPO.CO, Jakarta - The Indonesian Chamber of Commerce and Industry (Kadin) predicted the average income of Indonesians would fall below the global average, a result of an economic recession caused by the Covid-19 pandemic.
Bob Azam, a member of the Kadin's Permanent Employment Committee, said that the average income could fall by more than 40 percent.
The figure is far higher than what the International Labor Organization (ILO) Report estimated for the global income average. The ILO projected people's income worldwide to drop by 10.7 percent as per Q3/2020. The figure is equivalent to US$3.5 trillion, or 5.5 percent of the global Gross Domestic Product (GDP) throughout January-September 2020.
"The average income in Indonesia can fall more than 40 percent. In the hotel sector it has fallen 90 percent, manufacturing 60 percent, transportation 90 percent, and retail maybe 50 percent. So, the average could be up to 40 percent," Bob said on Thursday, September 24th.
Bob said the open unemployment rate in Q4/2020 can also drop deeper than the normal average unemployment rate of around 5 percent.
"Now, unemployment is already 5-6 percent. We can see the unemployment rate going up to 12 percent," said Bob, citing lackluster efforts to curb Covid-19 transmission as well as strategies to push the economy, among others.
Contacted separately, the Indonesian Employers' Association (Apindo) chairman Hariyadi Sukamdani said the ILO report would be linear with the employment trend in Indonesia. "RI adheres to the 'no work no pay' principle. That's the same in the ILO," Hariyadi said.
Read: Economist Reminds Govt of Massive Wave of Layoffs due to Recession
