Employment Programs

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Emergency job creation measures to provide assistance to those who had

lost their positions in the formal sector as a result of the Crisis became one

of the key planks in the government’s offi cial 1998/99 Social Safety Net

program. However, there was really no single program of this kind, but an

odd assortment of programs that were lumped together under this category

in the offi cial pronouncements of the government’s policies. This collection

of quite disparate programs – some of them were programs that had their

origins before the Crisis erupted, while many more were rapidly brought

into existence in the troubled months of 1998 – nevertheless shared certain

common attributes. In theory, all drew upon labor-intensive methods, widely

referred to in Indonesia by the term padat karya,23 usually to undertake

some small-scale village-based infrastructure or public works projects,

thus providing the maximum opportunities to absorb local unemployed

or underemployed labor.

Some of these labor-intensive programs using the padat karya label

were hastily developed by sectoral or line ministries to absorb recently

retrenched workers, especially in rural areas. According to one estimate,

the total number of programs that fell under this category may have been

as many as 16 in the 1998/99 fi scal year, but by 1999/2000 the number of

padat karya style programs had been reduced to two (Sumarto et al., 2001:

8). However, in the fi rst year of the Social Safety Net program, there were

padat karya programs announced by ministries such as Forestry, Religious

Affairs and Public Works, sections of the national bureaucracy with little

or no previous experience or record of accomplishment in the delivery of

social welfare assistance. It has also been suggested that certain ministries

took the opportunity presented by the government’s announcement of its

intention to introduce a Social Safety Net program to capture a share of

the budget that had been set aside for this form of social expenditure (Daley

and Fane, 2002: 314).

It should therefore come as no surprise that many of these programs were

widely criticized for their poor performance. Many of them did not last

more than a few months before disappearing. There were numerous reports

in the Indonesian press during the fi nal months of 1998 and throughout

1999, instancing examples of poor and hasty planning, inadequate or nonexistent

monitoring and supervision, and unsatisfactory implementation.

Many of the projects were reportedly selected without adequate consultation

with the local community, especially the poor and those who were most in

need of even short-term employment opportunities. As a result, much of

the work on some of these padat karya programs was menial and mindless.

There were also frequent complaints that a large proportion of the funds

were being diverted into materials and equipment rather than being directed

at labor-intensive tasks. This is in addition to widespread allegations of

malfeasance on the part of local offi cials.

We should also bear in mind that during the second half of 1998 and into

1999, some other programs were operating that were not actually intended

to be listed as part of the government’s offi cial Social Safety Net program,

but were nevertheless also applying padat karya principles. Some of these

were development programs of a longer-term nature that had already been

put in place before the Crisis began. This includes the second phase of the

Village Infrastructure Project (VIP/P3DT), a program funded by a World

Bank loan to deliver assistance to 2600 poor rural villages throughout

Java and Sumatra (World Bank, 1996). To a certain extent, this program

was building on the IDT model, but was much more closely supervised

and monitored. During the second half of 1998, and continuing in some

locations into the early months of 1999, an emergency drought relief ‘crash’

program known as the Padat Karya Desa Program (PKDP) was operating

in nearly 2000 villages in four eastern Indonesian provinces. This program

was funded by a World Bank loan package, and directed at those rural

villages that had been seriously affected by the 1997–98 El Niño-related

drought (Swisher, 1999).

Although not a formal part of the Social Safety Net program, both

these programs delivered block grants to fund small-scale infrastructure

projects using labor-intensive methods. Drawing on both geographic

and administrative targeting criteria, the villages selected to receive these

programs were intended to be among the poorest, in the case of VIP, or

suffering serious food shortages in the case of PKDP. It should be kept in

mind that participation in both programs might well have been captured by

the questions about participation in padat karya activities contained in the

1999 SUSENAS Special Module on the Social Safety Net program.

The targeting criteria that were used in many of the Social Safety Net

labor-intensive programs were often poorly formulated. This applies

especially to those schemes that were conceived in haste by the sectoral

ministries in mid-1998. However, one common feature of all the padat karya

type programs was a strong element of self-targeting or self-selection. Wage

rates were supposed to be kept deliberately low, well below prevailing wages

for unskilled agricultural labor in rural areas. This way, only those who

were in real need would consider registering for the work gangs that were

being formed. This was a conscious attempt to attract to the programs only

those members of the village community who really were unemployed and

desperate for some temporary work, rather than those who had suffi cient

resources or who were still gainfully employed. In practice, as with much else

about these padat karya schemes, these rules were reportedly often fl outed,

while supervision and sanctions were usually lax or non-existent.