Road to recovery: Assessing job risk and the impact on the most vulnerable in Indonesia’s pandemic-hit tourism industry
The tourism sector is a significant driver of Indonesia’s economic growth – so important that the country has been trying to open the doors to international tourists in the midst of the coronavirus pandemic.
But the latest deadly surge of COVID-19 cases and multiple outbreaks has put an abrupt halt to those plans. As this report finds, many vulnerable people who rely on tourism for their livelihoods are affected most by the ongoing, uncertain situation.
Our research shows that women, young people and lower-educated workers have higher job insecurity in the tourism industry and therefore have become even more economically vulnerable in the pandemic. This report also found that while Bali is the country’s prime tourism destination and has been hardest hit by the loss of visitors, the impact of COVID-19 has been severe in four provinces, accounting for 62 percent of all job losses.
To put the current situation in perspective, in 2019, the year before COVID-19 shut the world’s borders, more than 12 million Indonesians were employed in the travel and tourism sectors. This included workers directly employed and also those working in industry supply chains. The nation attracted 16.1 million international visitors who contributed US$15.8 billion (223 trillion rupiah) to the economy. The value of domestic and international tourism was 5.7 percent of national gross domestic product.
The COVID-19 pandemic has brought unprecedented disruption. In the first nine months of 2020 it has been estimated that Indonesia’s tourism industries lost US$14 billion (Rp 202 trillion), leading to a 1.6 percent decline in GDP, a 1.7 percent shortfall in personal income and up to 3.4 million job losses.
Many of those jobs in the tourism industry would have been filled by people from vulnerable and marginalised groups.
Across the archipelago, the collapse of tourism has resulted in 3.1 percent of female workers, 2.7 percent of youth employees, 3.1 percent of lower-educated workers, and 2.3 percent of those in low-income positions facing high levels of job insecurity.
This study provides policymakers with important evidence for making both immediate and long-term strategic decisions on the allocation of government stimulus packages.
The road to recovery requires solidarity and collaboration across the industry and government. This Australia-Indonesia Centre study contributes to this goal by identifying marginalised and vulnerable communities who have been heavily impacted by the tourism decline, so that those who have endured the most economic hardship can be supported and given an opportunity to reclaim their livelihoods.
Ultimately the report makes three key recommendations on government priorities to help policymakers with the recovery from COVID-19:
- Focusing policymaking on the five most affected regions to assist with wage compensation, skills training or job relocation, which will provide much-needed support to ensure the livelihoods of those communities.
- Promoting domestic tourism and community welfare with a national campaign for local travel that incorporates small-scale or niche tourism options.
- Formulating a tourism recovery strategy that brings together all stakeholders that prioritise vulnerable people in their plans for retraining and/or skills building, particularly in the digital economy.