Some 18 million Indonesians will be forced into poverty by the nation's ravaging economic crisis, and they will remain desperately poor for years to come, economists said on Wednesday.
World Bank Chief James Wolfensohn said in a newspaper interview published on Wednesday that the number of Indonesians living on one U.S. dollar per day would almost double to 20 percent of the population of 200 million people from 11 percent because of the crisis."This is not an exaggeration," said Umar Juoro, a senior economist at Jakarta's Centre for Information and Development Stud-ies. "These are the problems that we are facing."
Much of this poverty will be concentrated in urban areas, where unemployment has already doubled to about 8.7 million people since the crisis began last July with a plunge in the rupiah currency, other economists said.
Companies have been bankrupted by the fall in the rupiah, while prices have sky-rocketed, leading to a shrink in demand. Trade has all but come to a standstill, and the government has said unemployment will reach 13.4 million by March next year.
Those who still have a job have been badly hit by a government decision to freeze minimum wages at 1997 levels, effectively halving real incomes.