Elly Burhaini Faizal, Jakarta – Labor issues including disputes over minimum wages are not the main issue affecting Indonesian businesses, with political instability, poor governance and corruption pose as the bigger problems.
Graeme Buckley, a senior program analyst with the Geneva-based International Labor Organization (ILO), said that Indonesia could attract more investors if the government maintained political stability.
"Generally speaking, foreign investors are more concerned about violence, instability and issues related with corruption or government inefficiency. Those factors are far more important than the issue of minimum wages," he told The Jakarta Post at the launch of the findings of a survey of 216 workers in Jakarta.
He said that recent economic growth did not necessarily mean an improvement in people's welfare because most businesses did not revolve around unskilled labor. "This is why I think the government has a key role to ensure the economic growth not only benefits the elite," Buckley said.
The survey mapped out Indonesian workers' perception of 17 conditions needed to create a conducive environment for sustainable enterprises. It found that social and political elements were the most influential elements in creating an environment to support sustainable enterprises, particularly when it came to social dialogue and social protection as an instrument for protecting workers' welfare.
In terms of civil liberties, Indonesia performed better than other countries such as Malaysia, Singapore and the Philippines. However, it remained poorer than those countries in terms of political risk indicators.
Mohammed Mwamadzingo, the ILO's senior workers specialist, welcomed Indonesia's respect for universal human rights and international labor standards. But he said that there were issues that need further attention, including social dialogue between workers, employers and the government, where they could work together to plan for the future.
"I read in the papers about [recent worker's protests] as we were coming to Jakarta. There were demonstrations especially in the Bekasi area. We believe that it resulted from the lack of dialogue between employers and workers," he said.
Improving the workers' welfare, especially through minimum wages, could improve productivity. "It's never going to be an obstacle for any investor. We read from many countries that Indonesia has been probably one of countries with the lowest minimum wages in the world. But many investors still go to China and Malaysia, where the minimum wages are far higher than here. So wages are not a determinant fact of investment in Indonesia," he said.
Syafril Arsyad, deputy secretary-general of the All-Indonesian Workers Union Confederation (KSPSI), said that the majority of respondents had negative perceptions of the government's role in facilitating the partnership with workers and employers.
"Most of us think that the government plays its role in implementing international labor standards with less 'fairness', such as in resolving disputes in tripartite dialogue and in deciding proper wages," he said.
Djimanto, deputy chairman of Indonesian Employers Association (Apindo), said that creating conducive climate for sustainable enterprises should involve common logical perceptions between all parties. However, he said revenue or sales resources remained the key thing that could enable enterprises to fulfill those interests.
About 86 percent of survey respondents appreciated the role of the government in creating freedom of association. However, a majority of respondents felt that the government tended to favor employers in dispute settlement.