The Coronavirus Disease 2019 (“COVID-19”) has been affecting more than 210 (two hundred and ten) countries for around 4 (four) months since its first outbreak was reported on 31 December 2019 in Wuhan, the capital of Hubei Province in the People's Republic of China. The COVID-19 pandemic has a significant impact on the global economy. Many countries have suffered from the falling of economic activities within the countries and also from the effects of global economic slow-down.
In Indonesia, COVID-I9 was declared as nation non-natural disaster by the President of the Republic of Indonesia on 31 March 2020 based on Presidential Decree No. 11 of 2020 on Determination of Public Health Emergency COVID-19. Therefore, as measures to prevent the spread of COVID-19 pandemic, the Government imposes large-scale social restrictions through the issuance of Government Regulation No. 21 of 2020 on Large-Scale Social Restrictions in the Context of Accelerating Handling of COVID-19.
Such restrictions, has significantly affected business sectors across the nation. News reported that there are already several companies have taken efficiency measures in order to maintain business continuity by: (i) reducing operational time; (ii) reducing salary by reducing working hours or working days; and (iii) termination of employees. Based on data submitted by the Ministry of Manpower of the Republic of Indonesia, there are 1.940.000 (one million nine hundred forty thousand) terminated employee as of the date of this newsletter.
As measures to handle the impact of COVID-19 pandemic on social and economic aspects, the Government provides stimulus to strengthen social protection by increased the budget for Pre-Employment Card Program (Program Kartu Pra Kerja) that was officially launched on 20 March 2020 from Rp 10.000.000.000.000,00 (ten billion Rupiah) to Rp 20.000.000.000.000,00 (twenty billion Rupiah). Therefore, Pre-Employment Card Program could provide Rp 3.550.000,00 (three million five hundred fifty thousand) per person to approximately 5.600.000 (five million six hundred thousand) per person.
Please note that the Government has developed Pre-Employment Card Program since 2019. However, the Government adjusted the implementation of Pre-Employment Card Program with the impact of COVID-19 pandemic in Indonesia.
Pre-Employment Card Program is a program conducted by the Government to develop competency and increase productivity and competitiveness of labor forces as a productive age population who are employed, temporarily unemployed, or unemployed based on Presidential Regulation of the Republic of Indonesia No. 36 of 2020 on Job Competency Development through the Pre-Employment Card Program and Ministry Regulation of the Coordinating Ministry of Economic Affairs of the Republic of Indonesia No. 3 of 2020 on the Implementing Regulation of the Presidential Regulation of the Republic of Indonesia No. 36 of 2020 on Job Competency Development through the Pre-Employment Card Program.
The applicants of the Pre-Employment Card Program are limited to: (i) job seekers; (ii) terminated employees; and (iii) employees that require job competency improvement. Pre-Employment Card Program registration is conducted online through www.prakerja.go.id which will be implemented through approximately 30 (thirty) phases, once in a week, starting from 11 April 2020 until 4 November 2020.
In each phase, the quota of participants of Pre-Employment Card Program is 164.000 (one hundred sixty-four thousand) persons. The first phase of Pre-Employment Card Program registration that has been conducted since 11 April 2020 until 16 April 2020, approximately reached 5.900.000 (five million nine hundred thousand) registered applicants and 2.000.000 (two million) applicants have successfully completed the registration process.
The Government provides the participants of Pre-Employment Card Program with the following benefits: (i) training fee in the form of digital money amounting to Rp 1.000.000,00 (one million Rupiah); (ii) incentive fee for the cost in finding job in the form of digital money amounting to Rp 600.000,00 (six hundred thousand Rupiah) per month for 4 (four) months; and (iii) incentive fee for filling evaluation surveys in the form of digital money amounting to Rp 150.000,00 (six hundred thousand Rupiah).
The provision of the such benefits during this COVID-19 pandemic is one of Government instruments to provide incentives to employees who suffer income decrease or job termination. However, since the utilization of the benefits are limited to skill improvement and job seeking purpose, the relevance of such benefits during this difficult situation is in question since job seekers and terminated employees are currently more in need of financial support to purchase basic needs.
In response to the said criticism, Project Management Office of Pre-Employment Card Program adjusted the implementation of Pre-Employment Card Program by stating that incentives are provided to reduce the burden of living expenses for employees that are affected by COVID-19 pandemic and therefore the participants of Pre-Employment Card Program have the independency to use the incentives that have been provided. However, please note that the training fees could not be used as financial stimulus for living costs and the policy of the Project Management Office in allowing the use of Pre-Employment Card incentives as financial stimulus for living costs needs to be supported by a underlying regulation such as in the form of Decree of the Coordinating Ministry of Economic Affairs of the Republic of Indonesia.
To sum up, unemployment rate must be controlled by the Government since this problem could trigger social turmoil and threaten the stability of the nation. The Pre-Employment Card Program, is expected to not only support the welfare of the job seekers and terminated employees during this difficult time, but also could be optimally utilized by them to improve and/or enrich their skills in order to adapt with different type of jobs from other business sectors that not are affected by the COVID-19 pandemic.