JAKARTA (ILO News) - Two out of three surveyed enterprises in Indonesia suspended business operations temporally or permanently. Revenues of enterprises are slashed. Over a quarter of the enterprises reported having lost more than a half of their revenue, says a new enterprise survey issued by International Labour Organization (ILO).

The research brief, titled “The clock is ticking for survival of Indonesian enterprises, jobs at risk”, reveals that 90 per cent of enterprises already see financial problems, requiring urgent government support with cash flow for survival. In addition, about 63 per cent of surveyed enterprises have already shed workers and more enterprises plan to do so.

The survey was conducted by the ILO’s Sustaining Competitive and Responsible Enterprises (SCORE) Programme Indonesia in collaboration with its constituents and implementing partners, covering 571 enterprises in April 2020. The initiative was to understand the impact of the COVID-19 outbreak on enterprises and their assistance needs in Indonesia.

“As workers are furloughed or laid off, the pandemic has deprived millions of households of income, threatening their welfare. We need consorted tripartite actions to help cushion the impact of the pandemic on enterprises, workers and their families,” says Michiko Miyamoto, ILO Country Director for Indonesia.

Enterprises make every attempt to survive but they require support. “Some enterprises diversify products and services and others shift their businesses to the cyber space. Enterprises need support with adapting business models and operations to ‘after-corona’,” explains Januar Rustandie, SCORE programme manager.

As the economy will eventually re-open, protection of workers is an urgent task. Currently, less than 40 per cent of enterprises conduct temperature check. More than 30 per cent of enterprises cannot secure necessary physical distance among workers. “Until remedies and vaccination become available, preventing the spread of COVID-19 and protecting workers from infection at workplaces remain an important issue. A clear guidance is necessary,” the report says.

If the demand continue plummeted, enterprises risk their survival without adequate support, potentially leaving lingering consequences on the labour market. Therefore, among its recommendations, the report highlights the need for current economic stimulus package to focus on small- and medium-sized enterprises, the need for assuring access to cash and short-term financing and support for businesses to adapt their business models and operations to the era of social distancing through the enhancement of their online capabilities.

For further information, please contact:

Januar Rustandie
ILO’s SCORE programme manager
Email: januar@ilo.org

Tendy Gunawan
Programme officer for enterprise development
Email: gunawan@ilo.org

Gita Lingga
Communications officer
Email: gita@ilo.org