- COVID-19 lockdowns have led to school closures and unemployment.
- Without support, the future of work looks bleak for young people in Indonesia.
- YCAB Foundation provides training and microloans – helping to build skills and livelihoods.
With schools closed, unemployment soaring and households struggling to make ends meet, the COVID-19 pandemic has dealt a devastating blow to the life prospects of young people across the developing world.
Now, more than ever, these youngsters need the right tools to navigate the future and find the jobs that will sustain them and their families in a fast changing global economy. That is why it is essential to double down on efforts to empower both school aged children and, crucially, provide financial support to their mothers to keep them in education.
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For more than 20 years, my organization Yayasan Cinta Anak Bangsa (YCAB Foundation) has been working towards this using a twin-track approach. We have provided vocational training to more than four million youths in Indonesia and supplied microloans to over 200,000 mothers with children in school. This micro-capital provision – typically around $100 to $200 – helps women to grow their small businesses and gives them the financial resources to keep sending their children to classes.
Helping families out of poverty and children into education
The story of Mardiah, a 52-year-old mother of four, shows what is possible. With the help of capital loans from YCAB, she has set up a three-person distribution network in Jakarta for her street food, tripling her daily profits and enabling her to cover her children’s tuition. That has paid handsome dividends for her son Ari, who graduated from a YCAB training scheme in 2014 and now has a good job with Gojek, a multi-service platform and digital payment technology company.
Mardiah and Ari are not alone and their experience is replicated across many other families. Academic research into our work shows that microloans typically increase women’s daily income from under $2 to over $6 – a vital first step on the ladder out of poverty.
Today, the need for this kind of helping hand – rather than a hand-out – is more urgent than ever as the pandemic continues to disrupt swathes of society by cutting off educational and employment opportunities.
Bridging the digital divide
For hundreds of millions of children around the world, COVID-19 has been an educational disaster. Around 200 million learners remain out of school because of lockdown measures – at its peak, the figure was 1.6 billion – risking long-term damage to individuals and threatening years of development progress.
Unfortunately, it is the poorest who are hit hardest. They are ones without the smartphones, tablets and laptops that have transformed schools in the Western world into tech hubs of remote learning. In Indonesia, for example, over one third of students do not have access to a device for online learning. Perhaps even more worrying is the fact that one in four teachers also lack this vital equipment.
A key challenge in the post-COVID-19 world is to make sure that the right infrastructure – from Wi-Fi to affordable computers – is in place to realize the potential of the new digital routes to learning.
Over the last year, YCAB has had to quickly adapt the way it works to ensure students still get the help and assistance they need in the face of pandemic restrictions and the accelerating shift to digital.
Sadly, lockdowns and social distancing have torpedoed many of our vocational courses that require face-to-face teaching, such as electronics and hairdressing.
On the upside, however, moving courses online has allowed us to reach four times as many students at a significantly lower cost per capita. This has helped turbo-charge our programmes, teaching topics like coding and programming. It has also boosted the Mastercard Girls4Tech scheme that educates girls about Science, Technology, Engineering and Math (STEM) subjects, an endeavour that reached 16,000 pupils last year.
Batik training keeps Indonesian culture alive
There are other bright spots too, such as a batik training scheme that combines hands-on teaching with digital capabilities. By teaching batik to underprivileged groups, we are providing employment opportunities and preserving a unique slice of Indonesian culture: the use of wax-resistant dyeing to make beautiful fabrics that are admired around the world. Since the training takes place outdoors in rural areas, it has been largely unaffected by lockdowns.
Importantly, the trainee batik makers are also shown how to sell their wares directly to customers using platforms such as Facebook and Instagram. This cuts out the middleman and can deliver a monthly income at least four times the minimum wage.
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Social innovators address the world’s most serious challenges ranging from inequality to girls’ education and disaster relief that affect all of us, but in particular vulnerable and excluded groups. To achieve maximum impact and start to address root causes, they need greater visibility, credibility, access to finance, favourable policy decisions, and in some cases a better understanding of global affairs and access to decision makers.
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The Schwab Foundation for Social Entrepreneurship’s 2021 Annual Report evaluated the work of its 2019 and 2020 Awardees. It shows that despite challenges presented by the COVID-19 pandemic, the foundation’s community has found new ways to join forces, respond and develop the movement of social innovators.
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Economic recovery through education
Indonesia, like many developing countries, is at a critical juncture. In the 15 years up to the beginning of 2020, the country made remarkable progress in reducing poverty levels to below 10%. Now that progress is in jeopardy because of the pandemic.
For mothers who rely on small businesses to pay the bills, these are extraordinarily difficult times. The economic downturn and the evaporation of the tourist business means many have lost their livelihoods. As a result, 25-30% of our microloans are now non-performing, far above the previous run rate of under 5%.
Extrapolating that to the country as a whole paints a worrying picture because micro, small and medium-sized enterprises (MSMEs) make up 60% of Indonesian GDP. Inevitably, these economic woes will translate into more lost education, since even before the pandemic over two million Indonesian children were dropping out of school each year because their parents could not afford the costs.
Ultimately, Indonesia’s huge population of 275 million and its aspiring middle-class can be an asset or a liability for the nation. The outcome depends on the opportunities offered to its youth. By driving financial inclusion and helping underprivileged families keep their children in education, we can break the generational cycle of poverty decisively, and build long-term economic and societal resilience.