As at 31 July 2020, the COVID-19 pandemic had contracted the Indonesian economy, resulting in the loss of at least 3.5 million jobs (Ministry of Manpower, 2020). The Indonesian Chamber of Commerce and Industry (KADIN) has claimed that layoffs have affected as many as 6.4 million people (KADIN, 2020). No sex disaggregation data are available for these reported figures. In addition, there are existing 7 million jobseekers who may not find jobs during the current economic conditions. In the event that Indonesia fails to contain the spread of the virus and the economy continues to contract, further job losses are inevitable.
The consequences of a large-scale loss of income have been wiping out past socio-economic gains - including in the area of gender-equality. During the past decades, Indonesia has charted a modest progress towards gender equality, but the pandemic is winding back the clock. Information collected by UNHCR and partners indicates that refugees, who have no access to the formal job market, have experienced a devastating loss of income as a result of reduced opportunities in the informal market (UNHCR, 2020).
If we consider the family members of the 11.6 million jobseekers, the pandemic has economically affected over 25 million people, depriving them of their incomes, nutrition, and access to education, health care and other vital social services. The number of people suffering economically from the pandemic is higher than the toll of casualties recorded after the massive tsunami that hit Aceh in December 2004. The impact of job losses may be less visible as they are not the result of a natural disaster- but this is the scale of the jobs crisis that we face today.
Indonesian enterprises started feeling the crunch of the crisis as early as April 2020. According an ILO survey of 571 enterprises in that month, about 52 per cent of enterprises saw their revenue diminished by up to 50 per cent. This situation risks cuts in income of an estimated 97 million enterprise owners and workers. Nine out of the ten surveyed enterprises were experiencing cash flow problems. Three per cent of the surveyed enterprises had closed their businesses permanently, with small enterprises bearing the brunt of the crisis. More businesses are closing as the pandemic prolongs. A reverse of the trend has not yet been observed.
Women and vulnerable groups of people are disproportionately affected by the crisis.Labour market conditions deteriorate, existing inequalities are exacerbated. Transmission channels primarily impact vulnerable groups (women, youth, refugees and people living with HIV), as seen below.
The current economic downturn caused by COVID-19 is having a profound impact on gender inequality in the labour market. In the short term, the pandemic will have a disproportionately negative affect on women’s employment opportunities compared to those of men.In the long term, it may affect women’s livelihoods as a whole.
In Indonesia, approximately 60 per cent of female workers were employed in sectors hit hardest by the pandemic, which contracted seriously in the second quarter of 2020 (accommodation and food services, manufacturing, company services and other services) (WFP, 2020). Women and youth are often the first to be dismissed.
The pandemic has exacerbated the pre-existing gender imbalances in the distribution of household duties between men and women. According to a survey by the Indonesian National Commission for the Protection of Women (NCPW), the burden of domestic work during COVID-19 is borne by women. Among 2,285 survey respondents, 70 per cent of women reported an increase in their domestic workload compared to 49 per cent of men (Komnas Perempuan, 2020).
Gains in gender equality with respect to access to education have not yet been translated into gender equality in the Indonesian labour market. According to the labour force survey in February 2020, the gap in labour participation rates between men and women is wide, with men accounting for 84 per cent and women 55 per cent, respectively. On average, women earn 77 per cent of that of their male counterparts. Seven out of ten managerial positions are occupied by men, although women’s share in managerial positions recorded an increase of 4 percentage points between 2017 and 2019.
The business environment has also not been friendly with respect to women’s participation. Women are rarely valued for their personal abilities and perceptions of their work comply with established stereotypes - i.e., they have poorer skills than men and are unable to perform work that requires responsibility, or are less creative. These stereotypes are liable to influence women’s and men’s work choices, creating a labour market that is divided by gender. Taking into account women’s vulnerability and deep-rooted gender biases in the labour market, COVID-19 may wipe out their past gender equality gains, albeitmodest, and thicken the glass ceiling – unless there are policy interventions and consorted actions taken by the social partners. It is time to reinforce our actions.
Youth is another group of concern. Each year, about 2.4 million people enter the labour market in Indonesia. This year, however, companies are not recruiting. The recruitment of new graduates lags behind economic recovery, and it may only recommence in 2022 if an economic recovery kicks in in mid-2021. This year’s graduates will have to compete for scarce jobs with the graduates of 2021 and 2022. If no decisive interventions are made immediately, this year’s school graduates will form a lost generation. As ILO research has shown, a graduate’s failure to enter the perspective labour market at the onset of her or his career has a lasting impact. The longer that graduates are unemployed or in a precarious employment, the harder it will be to find a stable job.
Over the next two decades, technological advances, including automation and robotics, will significantly change jobs and enterprises in Indonesia. Women are particularly at risk. In fact, women are 20 per cent more likely than men to lose their job as a consequence of automation. Skilling the youth, especially female youth, for future jobs is among the top policy priorities of the government of Indonesia.
Youth entrepreneurs are also struggling to survive during the pandemic. According to a survey administered to 756 youth-led enterprises by UNDP Indonesia (held through U-Reports, a platform facilitated by UNICEF), 79 per cent of young entrepreneurs are affected by the spread of COVID-19. In fact, 21 per cent of them had to close their business. In addition, 58 per cent of young entrepreneurs reported a decrease in revenues. Despite challenges, 84 per cent of the respondents plan to maintain or re-open their business by connecting with other businesses to support each other in finance, distribution chains, promotion, and others.
In Indonesia, refugees are unable to work legally to support themselves. They are therefore excluded from participating in society and contributing to their host communities, and they lack access to self-reliance opportunities and adequate social protection mechanisms. Due to the COVID-19 pandemic, the deteriorating socio-economic conditions have deepened their predicament as they encounter multiple layers of challenges and forms of discrimination. This situation has exacerbated their existing vulnerabilities – and they are already among the most marginalized groups in the country.
As of July 2020, Indonesia is a host to 13,653 refugees and asylum seekers from 48 different countries, 72 per cent of which are adults and 28 per cent children. Of the adults, 26 per cent are women and 74 per cent men. More than half of them are Afghan refugees. Only a limited number of the most vulnerable refugees receive a minimal subsistence allowance from UNHCR and partners to help them meet their basic needs and prevent negative coping mechanisms  (see the file “Footnote.docx”). However, many refugees living independently continue to face these protection risks and become more vulnerable after years of dependency and impoverishment. A lack of access to livelihoods opportunities has a disproportionate impact on refugee women, who may be at a higher risk of exploitation and abuse or forced to resort to negative coping mechanisms such as survival sex to support themselves and their families.
Indonesia is committed to ending the AIDS epidemic by 2030  as part of achieving the SDG Goal 3. While Indonesia has a relatively low HIV prevalence at 0.4 per cent, the HIV epidemic is highly concentrated among key populations  such as female sex workers, people who use drugs, men who have sex with men and the transgender population.
According to the latest HIV estimates by the Ministry of Health, there were 545,188 people living with HIV (PLHIV) in Indonesia in December 2019. The Indonesian Government and external donors such as the Global Fund to fight AIDS, Tuberculosis and Malaria, as well as USAID, have made combined efforts to promote safe HIV prevention practices and to fast track efforts to promote routine HIV testing among key populations, so that a higher number of PLHIV are aware of their status and get treatment. The COVID-19 pandemic has significantly hampered this action.
A rapid survey conducted by UNAIDS and the PLHIV network (JIP) in March 2020 suggests that 60 per cent of PLHIV have experienced income reduction and many have experienced changes in their HIV care. Community programme outreach workers report shutdowns of key population hotspots and/or the closing of activities in these areas by civilian police to enforce social restrictions due to COVID-19. As a result, PLHIV and key populations working in impacted industries have lost their jobs.
Those living on daily incomes, particularly female sex workers and the transgender population, have been the hardest hit as many local governments have introduced mobility restrictions. The findings of a cash transfer project conducted by UNAIDS and its CSO partners under the Crisis Response Mechanism Consortium showed that more than two thousand transgender women have lost their incomes and cannot afford to pay for food and rent. Some of them are left with no income as they have to stay at home and or return to their hometown/villages to sustain life with their extended family. Women living with HIV are impacted the most when they lose their household income as any resources reserved for their health needs are repurposed for household needs.
The prospects of a quick socio-economic recovery are still gloomy. Labour market recoveries usually lag behind economic recoveries by 2-3 years because companies are wary of increasing their workforce during the initial phases of economic upturn. With the sluggish labour market situation brought about by the pandemic, many women and vulnerable groups of people are seeking to start businesses and earn a living. However, they face challenges due to their inability to cover their basic needs; their limited capacity and skills for business development and use of digital solutions: their lack of product quality management; and their inability to access finance and intensive business coaching.
Access to employment requires a certain set of employable skills, a combination of practical and soft skills, and job-relevant knowledge. Three groups tend to have limited access to training opportunities: women, youth, and people who face discriminations (e.g., refugees, PLHIV, key populations to HIV exposure such as transgender women). It is frequently observed that laid off workers return to their rural areas and rely on kinship support. However, training opportunities are scarcely found in rural areas, widening urban-rural divide. The basic requirement for citizens to have an ID card to prove their civil rights identity is limiting access to basic job opportunities and starting a business for vulnerable groups.
Gender equality and diversity in the labour market are important for women’s empowerment. In addition to the persistent pay gap between men and women, traditional gender-based social norms tend to determine the division of labour between men and women in the domestic sphere. Parents sometime prioritize their sons’ education over that of their daughters, given the differences in expected future income. Women’s empowerment and the addressing of gender biases in the labour market are required to break this chain of inter-generational transmission of gender inequality in work and economic opportunities. Indonesia has ratified the Discrimination (Employment and Occupation) Convention, 1958 (No. 111) and has made progress in safeguarding gender equality in the regulatory framework.
However, translating and implementing the regulations into practical terms, including human resources management at company level, remains challenging. In addition to gender biases, refugees face additional hurdles in accessing the labour market due to the lack of a legal framework for refugees to work in Indonesia. This project will bring this matter to the policymakers’ attention. Safeguarding an equal access to the labour market for all workers - including refugees, PLHIV, and people living with disabilities - is crucial for social inclusion and the achievement of the SDGs.
Addressing employment issues and protecting Indonesia’s most vulnerable population from the socio-economic impact of the COVID-19 crisis are an integral part of Priority Area 5 (i.e., mitigating the socio-economic impact of the crisis) of Indonesia’s Multi-Sectoral Response Plan (MSRP), which is equivalent to a United Nations Socio-Economic Response Plan (SERP). Of the required funding for implementing actions in Priority area 5, only 31 per cent has been funded – one of the least-funded areas of the Plan. Funding from the COVID-19 MPTF would help narrow the funding gap and help the UN in Indonesia empower women and vulnerable people during the recovery phase of the crisis and beyond.Next Page