Jakarta - Indonesia was preparing various policies aimed at rescuing the national economy and preventing mass layoffs as the world's fourth most-populous nation is battered by the global economic crisis, officials and media reports said Tuesday. Finance Minister Sri Mulyani Indrawati said the government had prepared stimulus policies aimed at helping rescue the national economy.
Among the steps was to immediately allocate a fund of 120 trillion rupiah (9.71 billion dollars) that is currently kept in the country's central bank, Indrawati said at an Investor Summit meeting in Jakarta on Tuesday.
"We will immediately disburse this budget. I have warned Bank Indonesia and national banks that this fund must proceed in the national economic system, not for the speculative action (of buying) US dollars," Indrawati said.
Other steps include a fiscal stimulus to the household sector and a tax subsidy, she added.
"The government will consider seriously all the available possibilities," Indrawati said.
According to the Manpower Ministry, as of late last week more than 42,000 workers were estimated to have lost their jobs.
The global economic turmoil has forced many labour-intensive export industries in the country to shut down, leading to widespread layoffs, said Myra Maria Hanartani, director general at the Manpower Ministry.
Hanartani said the crisis had been felt in Indonesia's garments and textile-related industry, and the mining sectors in Central and West Java, Maluku, North Sumatra and Central Kalimantan, the daily Media Indonesia.
Indonesia's economic growth fell to 6.1 per cent in the latest quarter slowing from 6.4 per cent growth seen in the preceding three months, and economists expect further declines in the new year.
Indrawati said Indonesia's economic growth may ease to as low as 5 per cent next year as the world tilts toward recession.
The chairman of the Indonesian Business Association, Sofyan Wanandi, said the global economic crisis had forced the labour-intensive export industries to reduce their production capacity by up to 30 per cent, leading to at least 500,000 workers expected to be jobless by mid-2009.
