Vast inequality threatens democracy

May 13, 2024
Indonesian currency financial money management concept

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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