The State of the World's Children 2000

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Panel 2 - Indonesia's despair

Rini is a 13-year-old girl who lives in a working class neighbourhood on the outskirts of Jakarta. For many years, Rini's father worked in a printing shop. Money was always tight, but it was enough to support Rini, her mother and her younger brother and sister. Then, in January 1998, the family was dealt a major blow. The printing shop closed without warning and her father was thrown out of work, turning Rini's world suddenly upside down. With the future so uncertain, Rini's parents worried about not being able to afford to send her to school.

Rini's loss and those suffered by millions of other Indonesian children in the Asian economic crisis that began in 1997 reflect the downside of globalization. Such disasters can seem almost unthinkable in countries where financial and legal mechanisms, solid infrastructures and decent living standards buffer people from extreme financial vagaries.

With protections in place, globalization seems benign at worst and beneficial at best, an explosive opportunity for growth, as ideas, technology, goods, services and people criss-cross the planet in search of new markets. More than $1.5 trillion changes hands in the world's currency markets each day - an eightfold increase since 1986. This progressive potential is great, as jobs are created and economic and political barriers fall.

Certainly, Indonesia's encounter with globalization began well. The world's fourth most populous nation, with its rich natural resources and masses of poor people desperate for work, was an attractive port of call as capital began to roam the globe in the 1980s. Overseas investors flocked to Jakarta and, by January 1997, foreign investment in Indonesian stock stood at $59 billion. The average annual income for an Indonesian rose from $50 in 1967 to $650 in 1994.

However, the gains of this 'Asian Tiger' vanished like vapour, as global opportunity yielded to global carnage. In 1997, when the Thai economy collapsed, the dominoes fell rapidly throughout East Asia. Indonesia's currency lost 70 per cent of its value in one year, and by the end of 1997, its stock market had fallen by nearly 40 per cent.

In 1998, the International Monetary Fund (IMF), the World Bank and other international agencies loaned Indonesia more than $50 billion. But the bailout came with stringent restrictions, including high interest rates and the mandated closure of 16 banks. The IMF-imposed austerity measures exacerbated the mushrooming social crisis. Soon, food riots and ethnic violence exploded in the streets. In May 1998, the Government fell.

Suffering the greatest setback of any country in East Asia, Indonesia saw its gross domestic product fall 12.2 per cent in the first half of 1998, compared to the same period in 1997. Between 1997 and 1998, according to the World Bank, the number of Indonesians living in poverty nearly doubled. The 20 million newly poor Indonesians - those earning $1 per day or less-could populate a medium - sized country. The International Labour Organization estimates that nearly two thirds of Indonesia's total population will be living below the poverty line at the start of the new millennium, a reversal that the World Bank has characterized as "the most dramatic economic collapse anywhere in 50 years."    
Copyright© 1999 UNICEF/99-0807/Lemoyne
Indonesian children pick through garbage at a dump in Jakarta.

The human costs of the debacle have been high, particularly for the poorest women and children. Many families, reeling from business failures and the loss of a million jobs nationwide, cut back from three meals per day to just one. The Indonesian Government estimates that 100 million people - nearly half the nation's population - cannot afford adequate food. More than 2 million Indonesian children below the age of five are already malnourished. Some people, in utter desperation, are giving up their children, creating a large population of 'economic orphans'.

With parents unable to afford school fees, about 20 per cent of all girls and 14 per cent of the boys in the poorer areas of Jakarta dropped out of junior secondary school in 1998. The rising number of uneducated children threatens to create a 'lost generation', ensuring that the fallout of the current crisis will endure for generations.

Although the financial crisis appears to be subsiding in East Asia, the human crisis continues. Twelve per cent of the populations of both the Republic of Korea and Thailand have fallen into poverty. Once again, women and children have borne the brunt of the losses: Between April 1997 and April 1998 in the Republic of Korea, employment dropped by 7 per cent among women, compared with a 3.8 per cent job loss for men. Among students, the high school drop-out rate in the Republic of Korea rose 36 per cent, while in Thailand, as many as 130,000 students left school.

As for Rini, the way out of poverty remains uncertain. Her father has been unable to find a steady job as the Indonesian economy continues to teeter. Her mother, Maida, has begun work as a seamstress in order to keep the family clothed and fed. Yet the family has been relatively fortunate: Maida has managed to earn just enough money to pay Rini's school fees.

About 4 million other children in Indonesia have been kept in school by the Aku Anak Sekolah - Back to School - Campaign. A collaborative effort of the Government of Indonesia, the World Bank, the Asian Development Bank and UNICEF, the campaign provides scholarships for students in primary and secondary schools and 130,000 block grants for schools to help maintain enrolment and teaching quality. Because of Aku Anak Sekolah, far fewer than the 6 million children it was feared might end their studies have actually left school. Nevertheless, 2.5 million children are no longer in class.

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