Jamsostek Faces Higher Payouts As Layoffs Rise, Jakarta Globe, Rabu 29 Juli 2009 -
The country's biggest state-owned social security provider, PT Jamsostek, says it will have to allocate as much as an additional Rp 2 trillion ($202 million) to cover unemployment insurance payouts this year after layoffs in the first half of 2009 ate up almost 80 percent of its annual allocation for that purpose.
Hotbonar Sinaga, Jamsostek's president director, said on Tuesday that Rp 3.2 trillion, or about 79 percent of the total allocated by the fund for unemployment claims this year, had already been paid out to policyholders, showing that unemployment had risen markedly in the first half.
"The unemployment fund has seen payouts amounting to more than [its normal level of] 50 percent of our budget allocation since the beginning of the year," Hotbonar said.
"This clearly shows the extent to which the global financial crisis has forced employers to cut their workforce."
However, he predicted that the trend had bottomed out and would improve over the remainder of the year on the back of the anticipated economic rebound.
"And even if claims exceed the allocation, we will increase it to up to Rp 6 trillion," he said.
Jamsostek increased its unemployment allocation to Rp 4.08 trillion in February, in anticipation of rising unemployment on the back of an expected deepening of the financial crisis.
"Our usual annual allocation for unemployment claims is between Rp 3 trillion and Rp 3.5 trillion," Hotbonar said. "However, we decided to increase it because so many of our policyholders were cashing in their policies."
The Finance Ministry estimates that open unemployment this year could reach 8.87 percent. However, lawmakers are hopeful that the Rp 73.3 trillion stimulus package approved by the House of Representatives in March will help lower joblessness to about 8.34 percent by year's end.
Since the start of the downturn, the country's exporters alone had laid off 24,790 workers by the end of January, and are believed to have laid off another 25,000 in subsequent months, according to ministry data.
Hotbonar said about two million people may cash in their social insurance policies by the end of the year, mostly because of layoffs. "That would be more than double last year’s figure of between 700,000 and 800,000," he added.
The Finance Ministry has forecast that the economy will grow by about 4.3 percent this year, down from an earlier estimate of 6 percent. Meanwhile, the Trade Ministry has upwardly revised its predicted drop in exports from 30 percent to 15 percent.
Currently, eight million workers are active members of Jamsostek schemes.The Indonesian Employers Association (Apindo) earlier said that its member companies had laid off 200,000 to 300,000 workers in the first quarter. (Janeman Latul)