10/21/2009, 00.00
INDONESIA

Padang: earthquake strikes economy, putting 200,000 jobs at risk

Mathias Hariyadi
The Indonesian government allocates almost US$ 700 million to reconstruction, but calls on local authorities to collaborate in the rebuilding efforts. Tourist sector is on its knees because of collapsed hotels, stores and shopping malls. Chamber of Commerce chairman wants the earthquake to be declared a “national disasters.”
Jakarta (AsiaNews) – After the devastating earthquake that levelled the city of Padang, residents must face another emergency: unemployment. As a result of last month’s quake houses, hotels, stores and restaurants collapsed. This has badly affected the hospitality industry, the area’s main economic activity, putting about 200,000 jobs at risk.

The central government has presented a financial package worth US$ 689 million to rebuild the city and other areas of West Sumatra. But Jakarta is also urging local authorities to help in the recovery.

National Disaster Management Chief Syamsul Maarif said that the 7.9 magnitude earthquake (not 7.6 as initially reported) destroyed 135,488 buildings, 65,380 homes, 2,164 schools, 51 hospitals and 1,003 mosques and churches. About 30 bridges collapsed and roads in the province suffered damage in 178 locations.

Last week, former Vice President Jusuf Kalla said the government would release hundreds of millions of dollars.

Outgoing Housing Minister Mohammad Yusuf Asy’ari said local governments must do their part. The government gave Aceh’s 2004 tsunami victims quake-resistant homes. “We have a different approach to address the same issue in Padang which needs participation from the local authority,” Asy’ari said.

First of all, reconstruction must jumpstart the area’s economic and commercial life, centred on the hospitality industry.

According to the West Sumatra Tourism Board, 50 per cent of revenues come from tourism, and getting it up and running is a priority.

President Susilo Bambang Yudhoyono’s new government, which was sworn in in parliament yesterday, will have to tackle the issue through good planning and more money. It must also act fast because the plight of hundreds of thousands of people jobless is getting worse.

Last week, thousands of people demonstrated against job cuts, including staff at the Bunda Medical Hospital Center, where at least 200 staff members protested against possible job termination.

Hospital employees, including nursing and support staff, rejected management’s offer of early retirement. The hospital had made the offer because of the financial crunch it now faces, following the earthquake. “We reject the proposal since the management has not yet filed for bankruptcy,” an anonymous employee said.

The Indonesian Business Association (APINDO) promised to take the right steps but said, “The overall picture will be negative” if the worldwide economic crisis does not show any signs of improving. Never the less, “job cuts will be the solution of last resort,’” APINDO Chairman Sofjan Wanandi said.

In the meantime, Padang’s Chamber of Commerce and Industry (KADIN) expects that at least “200,000 people will be out of a job” in retail, hotel and other tourism-related businesses, forced to close their doors.

For instance, what is left of the Bumi Minang Hotel will soon be torn down, leaving 200 people unemployed. The same will happen to about 130 employees at the Ambacang Hotel and another 120 at the Rocky Plaza.

The Ramayana Shopping Mall was able to reassign 76 employees to another location, but has had to let go all temporary employees.

KADIN Chairman Asnawi Bahar said employment will be badly hit over the next few months. This is why he “personally urged the central government to declare the Padang earthquake a national disaster” to speed up “procedures and the funding to reconstruct” the city.

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