The Impact of the Crisis on Rural Java
Evidence from a recent workshop
From 7 to 9 January 1999 a workshop on the impact of the Indonesian crisis on rural communities and urban settlements was held in Berg-en-Dal, The Netherlands. The workshop was organized by the Dutch Universities of Nijmegen and Amsterdam, together with Gadjah Mada Univeristy in Yogyakarta, as part of a joint research project on 'Social Security and Social Policy in Java'. The workshop presented a large number of case studies on recent developments in rural Java.
By Henry Sandee
Villagers in Java have been through periods of economic hardship before. There are many similarities in the adjustment strategies adopted by the village population today in comparison to those employed in previous periods of hardship. Rural households now adjust wages rather than employment levels to accommodate workers who have been dismissed in the cities. Boomgaard argued that this crisis will again lead to more landless villagers which as in the past will cause invasions of land and encroachment on forest land. He discovered that in the 1930's rich households in rural areas helped out the poorer segments of the village economy to cope with the economic adversities.Historical perspectives are also useful in searching for a methodology to assess the impact of the crisis on village economies. Timing of fieldwork is crucial. Some suggested that it is too early to assess the total impact of the crisis as changes in the national and urban economy have not yet fully trickled down to the rural areas. In general, the current crisis needs to be viewed as part of an ongoing process of change that has been transforming the countryside in Java. Getting down to brass tacks, the workshop arrived at the following working definition of a crisis: it is a sudden shock to which conventional adjustment strategies do not apply. This crisis comes after 25 years of economic growth during which many households were able to save and prepare a buffer for bad times ahead. Vel argued that the economic crisis needs to be seen in conjunction with ecological problems (El Niņo, La Niņa) and the current social and political crisis. Consequently, this crisis may be referred to as kristal (krisis total).
Diverse impact of the crisis
In general the workshop concluded that the impact of the crisis on rural Java has been diverse. This diversity concerns the impact on various groups, strata, or classes in the village economy. Landowners appear to be faring better than others. Households with no access to land, which are firmly embedded in the cash economy, appear to be most hit. Another aspect of diversity is the evidence on the rural non-farm sector tends to present different pictures. Wiradi reports that rural brickmaking in West Java has been severely hit and wages have been cut substantially to accommodate more workers. Sandee found that small-scale tile and brass handicrafts enterprises working largely for the rural markets appear to do better than their counterparts that concentrate on urban markets. Thirdly, there is diversity among villages. Breman, Wiradi, and Wolters underlined the fact that rural communities are in disarray while White, Agus Dwiyanto, Hüsken, and Koning pointed out that the crisis has, so far, had only a limited impact on the developments in the villages that they studied. Various factors were discussed that might explain this diversity in impact such as the location and cropping patterns of the village, the characteristics of its non-farm activities, and the importance of migrant labour. The degree of monetization of the village economy seems to matter in determining the local capacity to adjust to the changes in the economic environment. The issue of returning migrants was debated repeatedly. In her overview paper on social security, Saptari stressed that most social relations in rural Java are directly reciprocal by nature and returns are expected in a well-defined period in time. It is argued that this is also true for migrants for whom it is important to pay their remittances (as a social premium) in good time to secure their access to the social safety nets in their rural communities in time of economic distress. Evidence on the re-integration of returnees is mixed. On the one hand, there are reports that rural wage rates have been adjusted downwards to accommodate more workers in the village labour markets. There are reports that fewer workdays are available per worker during harvest, as more workers need to have a share of the jobs available. On the other hand, there are return migrants who are neither willing nor able to work in agriculture and look for opportunities to go back to the cities. Prior to the crisis there was increasing evidence that access to land is no longer the sole indicator of economic and social status. Commuting and migration are nowadays very important sources of income for rural households. It is very common to find that more than 40 per cent of the working population of villages in Java are economically active outside their rural communities. The current period of rapid inflation and declining wage employment opportunities have made land once more a crucial asset and an important source for social security. Irwan Abdullah and Hüsken found declining landsales in the villages that they studied. More labour appears to be employed in agriculture than in previous years albeit at lower wages.
Financial relieve
Finally, two other issues that needed to be highlighted were the impact of the crisis on rotating savings and credit associations (arisan) and government programmes to develop a social safety net in the villages. Lont and Marianti found that there are no substantial withdrawals from arisan. It appears that arisan are more than just a way to save money; they also provide households with access to networks of assistance and information that are sorely needed during the crisis. Dwiyanto mentions some problems created by the implementation of social safety net programmes (Jaringan Pengamanan Sosial). Local government agencies are suddenly confronted with large sums of money that need to be disbursed within a strait jacket of tight time schedules. This has given rise to a rural construction boom as building activities can easily absorb large sums of money. In her paper Koning mentions that villagers sensed that there was a crisis going on because the village was being supplied with such an amount of aid programmes in such a short time
Henry Sandee, Department of Development Economics, Free University Amsterdam, can be reached at e-mail: hsandee@econ.vu.nl.