Indonesia: 1.2 Million Furloughed, Laid Off amid COVID-19 Pandemic

More than 1 million Indonesian workers have been furloughed or laid off as the coronavirus outbreak takes a toll on businesses, the finance minister said Friday, as the government announced new stimulus measures to prevent “massive” bankruptcies during the pandemic in Southeast Asia’s biggest economy.

The government, which earlier warned that 5.2 million Indonesians could lose their jobs, confirmed 407 new COVID-19 infections on Friday, taking the nation’s cumulative tally of cases to 5,923 and surpassing the total in the neighboring Philippines.

“The number of workers who have been furloughed [or laid off] during April is 1.2 million from formal sector workers,” Finance Minister Sri Mulyani Indrawati said in a teleconference. She said workers from non-formal sectors had also been adversely affected.

The government will expand tax breaks it has given to industries to 11 more sectors, including food, trade, telecommunication, mining, tourism and transportation, the ministry’s director-general of taxation, Suryo Utomo, told reporters.

The incentives involve temporarily waiving income tax on salaries, discounts on corporate tax payments and the suspension of import taxes, he said.

“The state budget will try to provide support so that the shock does not disrupt or does not cause massive bankruptcy,” Mulyani Indrawati said.

Over 1.2 million workers from 74,439 companies in both the formal and informal sectors have either been told to stay home – furloughed – or have been laid off as a result of the pandemic, according to the Jakarta Post, citing data from the Manpower Ministry.

The International Monetary Fund, in its World Economic Outlook report released Tuesday,
predicted that Indonesian economic growth could plunge to 0.5 percent this year, from 5.02 percent in 2019.

Meanwhile, Indonesia’s death toll from the coronavirus jumped to 520 on Friday after it reported 24 new fatalities, said Achmad Yurianto, spokesman for the country’s COVID-19 task force.

More than half of the confirmed cases and deaths are in the capital, Jakarta.

Before Indonesia’s latest figures were announced, the Philippines had the highest number of confirmed cases in Southeast Asia, at 5,878, with 387 deaths.

Globally, more than 2.2 million infections have been recorded with the death toll at almost 150,000 as of Friday, according to data compiled by disease experts at U.S.-based Johns Hopkins University.

On Thursday, the Indonesian task force said that the COVID-19 outbreak in the country was expected to peak in May at 95,000 cases.

Achmad said 42,000 tests had been conducted, about three times the number of tests compared to the past two weeks. His announcement came after the government was criticized over its low rate of testing which, experts said, could have hidden the actual extent of the pandemic.

Indonesia has imposed a partial lockdown in the greater Jakarta region, home to about 30 million people, banning gatherings of more than five people and restricting travel.

Indonesians in India

Meanwhile, the number of Indonesians who tested positive for COVID-19 in India rose to 75, Foreign Minister Retno Marsudi said.

They are among 717 Indonesians who had traveled to India to take part in a religious gathering organized by the international Muslim missionary group Tablighi Jamaat, Retno said.

“Indonesia continues to communicate with the Indian government regarding the handling of Indonesian Tablighi Jamaat members in India,” Retno told reporters.

Retno said attempts to bring the Indonesians home had been hampered by the ongoing lockdown that has been in force in India since March 24.

The leader of Tablighi Jamaat, Muhammad Saad Khandalvi, has been charged with manslaughter after a meeting it held in New Delhi in March was linked to 1,023 COVID-19 cases across 17 states, BBC News reported on Thursday.

Delhi police said that Saad had been charged with “culpable homicide,” the legal term for the death of a person without intention to kill. Prosecutors said he ignored two notices to end the event at a mosque in the capital, the BBC said.

Tia Asmara in Jakarta contributed to this report.