Many of the job losses, said Indonesian Employers Association chairman Sofjan Wanandi, are likely to come from the construction, manufacturing, textile and plantation sectors, though less from the financial sector.

Calling on the government to act fast to stimulate growth, he said: 'We'll be better off if the government can start spending on infrastructure projects this month.'

The Finance Minister had announced plans last month to spend S$10 billion on infrastructure and other projects to boost growth and create more jobs. The global economic crisis has already pushed down growth in South-east Asia's biggest economy, with the figure dropping from 6 per cent last year to an expected 4.5 to 5.5 per cent this year.

Mr Wanandi noted that demand from the domestic market has dropped in line with tumbling commodity prices, and added: 'Many medium and small companies will be out of business.'

The estimated half-million job losses, however, are still conservative in Indonesia, where the unemployment rate has hit 10 per cent.

AGENCE FRANCE-PRESSE