The Crisis in Indonesia: Stories From the Field.

Credit in crisis

In March 1998, the International Fund for Agricultural Development (IFAD), a United Nations specialized agency, undertook two rapid assessments of the Asian financial crisis and its impact on the rural poor. The assessments revealed that among the worst hit were the populations of the marginal areas, those living in the uplands, hills and mountains of the continent. IFAD concluded that their increasing exclusion and desperation was likely to impact heavily on the stability and continuing prosperity of the region.

Sukanya Mohan Das, a consultant with IFAD, insited the Income Generating Project for Small Farmers and Landless in Indonesia and spoke to women who received credit from the Fund.

Like other members of the Tiga Serangkai Association, I am a trader and sell cloth, cooking pots, plates and other household goods which I buy from the market. Each day after I complete my other work, I walk around the village with my basket of things to sell. Before I joined the group and received loans, it was difficult for me to make ends meet. Even though I worked in other people's fields and grew rice on my grandmother's tiny paddy plot during the rainy season, my business selling household goods was not very successful, as there was never enough money to buy things from the market.

So when I received the 50,000 rupiah loan, I was really relieved. With it, I was able to buy more goods from the market, which I sold here in the village. There were no problems with food. I also joined in the activities carried out by the Association, like making lelur asin (salted/preserved eggs) and working in the Association's store. I also took part in the literacy classes organized by the Association.

Now, the price of sembako (the nine basic necessities) such as rice and cooking oil have shot up. So it is difficult to feed myself, my mother and grandmother, and buy enough things for my business. The drought has made things worse. My grandmother's paddy plot could not even give us a tonne of paddy this harvest and there is also a shortage of eggs, as chickens and ducks have not been laying. Still, we have managed to get by; the people I work for often tell me to take home some of their vegetables and we try to share our rice with families that have none.

We can no longer afford voluntary savings. The monthly lottery we used to organize for Association members has also stopped, as no one can contribute 30,000 rupiah for the prize money. These days, all we discuss in our monthly meetings is ways to improve the sales of our products, for instance, by thoroughly cleaning the eggs, as well as packaging them in a wrapper with the Association's logo. Lately, with the reduced supply and high cost of eggs, we switched to re-selling rice instead. The Association has arranged to buy subsidized rice, which we re-sell here for a small profit of 100 rupiah per kilogramme.

We hope that our village can get assistance to improve basic things like the village water supply and sanitation. Our drinking water comes from the school well and although the water is alright, the rough footpath to the well does not make carrying water very easy. The water itself is often contaminated, spreading sickness and disease. If we could get help to improve the footpath to the well and for better sanitation, our lives would be much better.

I have been making tepeh since I was 15 years old, when I was still living with my parents who used to be labourers. As the youngest child, I was responsible for supporting my parents. At present, all members of my family are involved in tepeh-making and we sell tepeh each day in the market. To make the tepeh I have to buy cassava from my cousins who live near Gunung Sari. Before my group was able to take loans, I could never buy enough cassava to meet the demand for nay tepeh. So when our group began to get loans, I used the money to buy more cassava and increase production of tepeh. But the loans stopped two years ago and now, the price of cassava has increased, while its supply has reduced, because farmers have started to eat cassava themselves as a substitute for rice. With these problems, I have had to cut back on production of tepeh. The portion of tepeh in each packet is now less than half a kilogramme, but we still sell each packet at the old selling price of 250 rupiah. As I now sell less packets of tepeh each day, my earnings per day have gone down from 7,500 rupiah to 5,000 rupiah. This situation is really sad, as demand for my tepeh is still just as strong, and there are days when customers have to go home empty-handed because they came to my stall too late.

To make matters worse, the prices of staple foods like rice, sugar and cooking oil have all gone up. For example, the price of rice has increased from 1,000 rupiah per kilogramme to 3,500 rupiah; cooking oil from 1,000 rupiah per kilogramme to 10,000 rupiah; and sugar, from 1,500 rupiah per kilogramme to 4,500 rupiah. If it were not for the money we receive from our two daughters who work in Malaysia, we would not be able to eat three meals a day. Last month, my second daughter had to return home because she lost her job there and now we only get money from our eldest daughter. Most of the others in the group and in our village are facing the same difficulties.

Most people can only afford to send their children to elementary school and not many people visit the PUSKESMAS (community health centre) these days, as the price of medicines has also increased sharply.

We feel that only two things can make our situation better: our first hope is that the prices of sembako return to their old levels, and second, that we can once again receive loans to increase production of tepeh.

Most of the people in my village are farmers. Whilst the men in the village also work as labourers, the women weave clothes to increase their families' earnings. During the rainy season, almost everyone works in the paddy fields, and weaving and sewing are done in the evenings, after we have finished with our other chores. I usually wake up at five in the morning, pray and fetch water from our well, and then go to the forest to collect firewood from seven to nine in the morning. In the dry season, when I do not need to work in the paddy field, I spend the rest of the day at the showroom area and only star start my sewing after evening prayers, at around six in the evening. I usually sew late at night after my son and parents have gone to bed.

My family does not have very much land, compared to other members of the group. So the loan money was very helpful because I could buy more cloth, thread and dyes and make more money from sewing and weaving. Apart from the loans from the group, we also had training sessions on improving business skills, health and nutrition, which were organized by the field worker who visits our group. This year, with the bad harvests, we have not been able to save more than 2 or 3 sacks of rice to meet our own needs. By selling the clothes I make, I have been able to buy more food for my family, and send my son to school. I would not have been able to do this without the loan from the group. The krismon (crisis) has also affected my business and family in many ways. Not only because of the price rise, but also as there are not so many tourists these days. Although we still eat three meals a day, we mix rice together with cassava, and only eat vegetables and tempeh (fermented soya bean). We no longer have additional savings . While others who own more land or grow chilies may not have the same difficulties I have, my position is by far better compared to the widows and other women-headed families who had decided not to join the group, as they were afraid that they could not repay the loan. My hopes for the future are that the prices of sembako go down, that more tourists will come to Lombok, and that I can send my son to school and, later, university.

Ibu Sahnun is 27, a member of the "Tiga Serangkai" Association of P4K small farmer groups in Montong Ara village, West Lombok, Indonesia. The Association comprises three women's small farmer groups and has a total of 30 members. Apart from savings and credit activities, the Association runs a little provision store which stocks basic household items. Conditions in Montong Ara are difficult, with poor sanitation and inadequate water supply. Whilst the difficulties wrought by the present economic crisis require macroeconomic policy changes, some immediate and relatively less complex measures could be taken to alleviate the everyday hardships facing women such as Ibu Sahnun and other disadvantaged communities in Indonesia.

The Normah, 58, is the leader of the Puncang's farmer group. The main activity of the group is processing tepeh(fermented cassava) its last loan at the end of 1995/early 1996 and although a used to collectively discuss the ways of marketing the tepeh and have monthly meetings, these activities ceased soon after they stopped receiving loans. Each group member and their families would individually process and sell the tepeh they produced.

Ibu, Ayat, 38, is a member of Sadar small farmers groups of weavers and tailors in Desa Rembitan Village. Central Lombok, whose trade depends on foreign tourism. At s small showroom area at the entrance to the village, group members display them traditional kain ikat (weavings) and "ready to wear clothes lbu. Ayat left her husband 14 years ago and now lives with her parents and 13-year-old son. The traditional weavings and cloths are additional source of income for women in the village. Credit is mainly used to buy the inputs, such as cotton, thread and dyes required for their trade. The group thus far has received five loans the last being 250,000 rupiah per member.

Case in Point

Sua is eight years old and attending grade 2 this year. He lives in Nong Khai province, where his grand-mother has been taking care of him since his parents and 13-year-old sister, Pia, had gone to Bangkok two months before to look for work in construction. The people his mother borrowed money from work in Construction. The people his mother borrowed money from will soon take away their house and garden if she cannot pay back.

Pia has had to quit school; she is very bright and receives a scholarship of almost 3,000 baht a year, which is not enough to keep her in school, and her parents need her help to find some-money to pay the money-lender at least the interest. At the end of 1996, Sua's father, a truck driver, was arrested and charged with having drugs in his possession. He was in jail in a province a long way from Nong Khai for more than a year. Her mother, who is a small vendor, could not make ends meet, and sold a small piece of land to cover Sus's and Pia's school expenses and for travelling back and forth to visit her husband in jail. She also borrowed money for a small grocery business that later collapsed, there being more sellers and fewer buyers as the economic situation worsened. When Sua's father was released from jail, the family debts had caught up with them. Last summer, as many others were returning home from Bankkok unemployed, the family was offered a job through a friend with one of the few remaining construct ion companies.

This was wonderful news and the whole family went to Bangkok. The parents were promised 150 and 130 baht a day (US$3.80 and $3.30) and Pia 80 baht a day. After three months, they had not been paid and the loan they had taken from home was depleted. Sua had to help his mother find food money. His chore was to walk around the site and others nearby to collect nails and sell them to junk collectors, which fetched the family about 10 to 30 baht ($0.25-$0.75) extra a day.

They stopped working after three months. Sua remembers being often hungry. He told grandma of his walking in the hot sun looking for nails and coke cans to sell. He had hoped that soon his father would get a real salary, but that time never came. The boss finally disappeared. The family had to sell cooking pots, pans and mats to pay for return transportation to Nong Khai. His parents are in debt even more.

Just before school started, another friend of Sua's father said he and three others had contracted a house construction work for six months. He offered employment to Sua's family. It was at this point that his parents decided that his sister must leave school for good. Sua cried because he did not want to live in a hot tin shack in another construction site. Nor did he want to collect nails again for food. Sua is now at home with grandma, lift with 300 baht allowance for the next six months. Nothing is heard from his mother yet, and Sua does not know when his family will come back or whether they can keep their house after all. Sua misses his mother.