THE GAP GROWS, WIDENS, DEEPENS - THREATENS

 TRADE UP, BUT TRICKLES DOWN   

            

Pic: Oxfam: "Growing inequality is undermining the fight against poverty, putting a brake on economic growth and threatening social cohesion."

The disparity is vast and immoral.  Emotional language touches souls, but in  Indonesia it should also grab economics and politics.  The new government could demand reform.  It wont.

We’ll call her Siti. Real name usage might threaten the uni graduate’s fragile job as an English teacher at a government school. She earns less than  Rp 400,000 a month for working three days a week and being on call - with other time spent on higher study. For rough Oz dollar conversion divide by 10,000.  

Survival is by living with her parents though she's in her mid-20s. She could get more in a private school - though not much - but farewell  pension entitlements

Every year the national government lists basic wages for more than 500 cities.  The monthly rate in Malang where Siti teaches is supposed to be a slither above Rp 3.1 million.  That’s AUD 330.

Being a woman doesn’t help:  The UN Gender Development Index reports the average Indonesian guy gets almost double the pay of his female colleagues even though rates are for humans whatever their sex.  

Bureau of Statistics figures show women's workforce participation rate is 53 per cent, compared to 82 for men. In parliament only 21 per cent of elected members are women.

Experience with Indonesian stats reveal official and unofficial figures jostle for inaccuracies. One marginally more reputable source reckons grads start at around Rp 5 million in Jakarta.  Just across the 16 km Singapore Strait their mates pull in at least ten times more.

The published under-24 unemployment rate is above 14 per cent.  Over-supplied markets keep wages down unless the worker is in medicine, IT or management.  

Teachers are treated seriously in Europe where salaries can reach AUD 6,000 a month - and now chalkies are striking for more.  

The Jakarta Post says that the Republic holds sixth place in the world for inequality and that the four richest men have more dosh than the combined total of the poorest 100 million:

 ‘An excessive concentration of wealth is considered a risk for democracy as those at the top have too much bargaining power to influence the course of public policies. Even though extreme poverty in the country has declined, income disparity last year was the worst in the last five years.’

When independence from Dutch colonial control was declared in 1945 the expectation was for a Republic of equals in a 'Unitary State'.  Constitutionally the kampong battler has rights equal to the idle oligarch but in fact the gulf in government support is unbridgeable.

One gets next to nothing, and the other tax breaks, concessions, business opportunities, special dealings and often the chance for a hand in the till.

The issue briefly surfaced during the Presidential election campaign in February. However none of the three major contenders treated inequality as a priority to be fixed for the sake of the people, the economy and security.

Last year new employment laws seemed to give workers more rights like overtime pay, maternity leave and social service benefits.  But exercising these isn’t easy away from international corporates with HR teams and watchful shareholders.

Stirring isn't recommended in a culture where open dissent is only for the grimly determined backed by many of the like-minded.

Universities and unions have traditionally been where anger ferments into action.  However, only 50,000 students and workers in and around Jakarta bothered to march on 1 May (International Labour Day),  a number too small to bother politicians in a nation of 275 million.

Will anything change?  That's unlikely.  The poor and poorly paid will remain - along with coal and mineral exports - as the source of the Indonesian economy.

The well is flooding at the top (5.05 growth last year) but little overflow is trickling down.

Despite being mega-rich (a declared AUD 240 million) the new president-elect, disgraced former general  and current Defence Minister Prabowo Subianto knows how to kill but not nurture.

He’ll have to rely on the public service for financial advice and his colleagues in the upcoming right-wing government for direction.  

There’s also no charismatic leader fronting any opposition. Three years ago the Partai Buruh (Workers’ Party) surfaced but has struggled to stay afloat.

Some losers in the last general election have already decided pragmatism trumps ideology.

Media mogul Surya Paloh and head of  NasDem (National Democratic) Party endorsed  academic Dr Anies Baswedan as a presidential candidate.

The former Jakarta Governor scored second place behind Prabowo and his populist Gerindra (Great Indonesia Movement) Party. Surya has now kicked out Anies and wants to nestle with  the winner.

If this goes ahead opposition will be further reduced leaving dissent to the NGOs and maybe the PDI-P (Democratic Party of Struggle)   led by fourth president Megawati Soekarnoputri (2001-04).

Personal animosities are currently keeping her out of the coalition - though that may change as the magnetic pull of status and money intensifies.

So far there’s no indication that workers’ needs will be addressed when the Prabowo administration is sworn in come October.

Teacher Siti has a limited career future. Foremost is staying at the blackboard and hoping to slowly climb the promotion and reward ladder.

Alternatively she can use her language talents to get into an international trader hoping it might apply the standards it has to follow overseas.

But that would negate the advantage of a company investing in a country where wages are a minor cost of doing business.

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First published in Pearls & Irritations 13 May 2024: https://johnmenadue.com/vast-inequality-threatens-democracylink-b/

CSR - A FAIR DIVISION OF THE SPOILS?

Calculating the cost of giving    

                              

A hefty new motorbike van is just the transport needed for the kids of Kalipare, a village between Malang and Java’s south coast. It can climb hills and cope with the rugged roads even with a full load of giggling girls.

The St Yohanes elementary school has 54 students, but almost a third live too far to walk.  Few families can afford their own motorbike.  Reality check: No free transport, no education.

Fortunately a generous person gave Rp 21 million [US$1,650] to buy the machine, which is pleasing news for the school. There are no company logos, so no commitments to commerce.

However the gift didn’t come with money for fuel, maintenance and salary for driver Yulius Katijan .  Consequently these expenses have been lifted from the general school budget.  This means the ‘library’ (right) will remain a junk room until another donor appears to pay for stock and refurbishing.

These are the sort of issues that poor schools in Indonesia have to juggle when government cash is not enough.  They are also encountered daily by Father Bonifasius Hudiono, 53, who heads the Karmel Foundation in East Java.

Karmel supports 7,000 students in 61 village schools and 60 kids in an orphanage.  Some money comes from the Indonesian government, though Father Bonifasius alleged that local officials cut 20 per cent off the grants.

He committed himself as a man of God after completing theological studies 25 years ago. Although he insists that thumbing a calculator hasn’t replaced his commitment to the cross, his days are spent wondering when the next rupiah will arrive.

 “Deus providebit” [God will provide], he said, and to test his faith checked Karmel’s bank balance on his smart phone. Lo and behold, Rp 10 million [US$770] had just been deposited.

Didn’t he want to know the source?  He knows the person, but not how they got their cash.  So if it was from trading stocks in companies that make cigarettes, alcohol or weapons would he accept?

“These are ethical questions that we haven’t started to think about in Indonesia,” he said. “I have taken money from a tobacco company’s education foundation, but thought that to be OK because it wasn’t directly associated with smoking. We won’t promote the company’s products.”

Taking a principled stand on moral issues is easier in countries where governments fund compulsory education and no-one is denied schooling for want of money.  But in Indonesia there’s little space to debate such niceties when the needs are raw and urgent.

Only three pupils at St Yohanes are Muslim, according to principal Wuryanto. But down the road at St Antonius junior high school the majority are Muslim.

 “We are not seeking to Christianise students – that’s a lie,” said Father Bonifasius. (below) “We are trying to provide high quality education and care so children in isolated areas get a chance to succeed. Parents who appreciate what we’re doing will eventually make the schools self sufficient.

“Attracting business donations is becoming difficult as the government gets more efficient in taxing companies, which are now less interested in Corporate Social Responsibility [CSR]. [See breakout]

“We’ve had money from Europe and Japan but these donations tend to be for one-off projects.

“People give for a variety of reasons.  Maybe a few think they are buying a ticket to heaven.  But most are genuine, giving thanks for the church’s help or because they’d like to share their blessings.  We want people to give with a good heart.

“I don’t sell poverty.  When people ask what they can do to help the poor I just direct them to a specific need at a school.”

Endang Haryani (above) doesn’t get to follow her training as an engineer.  Instead, like Father Bonifasius, she spends her time hunting rupiah for Malang’s non-denominational Foundation for Educating the Handicapped [YPAC], supporting and training about 140 young people.

She’s also had to look overseas. Recently she got a direct donation from the New Zealand Embassy and a rehabilitation charity in NZ to upgrade facilities at the school.

“We’ve been operating for 60 years and the government allows us use of the building,” she said. “We need Rp 1.5 billion [US$ 115,000] a year for running costs – we get Rp 45 million [US$3,500] from the government.

“The rest comes from donors.  Although we’ve put up many proposals for CSR funding we’ve had only one response – from a bank. Not all donors want to be involved with the handicapped.  It’s definitely getting harder to raise money.”   

Need for reform

The Corporate Social Responsibility system, where companies pay for community services, can be thinly disguised advertising.  Users of a small recreation park in Malang promoting good health are left in no doubt that a tobacco company has funded the equipment.

In 2012 the national government enacted a 2007 law requiring companies that manage or use natural resources to bear a social and environmental responsibility.  The original legislation applied to all corporates, but strong objections from business whittled application down to extractive industries.

Dr Dwi Budi Santoso ( right), vice director of Brawijaya University’s Development Economics and Society Study Center agreed that the CSR system was unfair because it depended on a company’s location, size and interests, and the skills and contacts of fundraisers.

“I was an advisor to a local government in East Java in its negotiations with a gold mining company,” he said. “We wanted CSR to be built into the agreement but the company refused because it would have diluted profit. So the permit was refused.

“Companies can play favorites with CSR, and it’s difficult to enforce. There’s not much trust between government and business and there’s a lack of accurate data. The whole tax system in Indonesia needs to be reformed to make sure the disadvantaged who need funds get State support wherever they are.”

(First published in The Jakarta Post 22 March 2015)