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Labor conditions likely to worsen in 1999

Jakarta Post - December 29, 1998

Jakarta – Observers predicted on Monday that labor conditions would worsen next year due to the prolonged economic and political crises, warning that an unemployment rate of 38 million out of the total work force of 90 million represented a ticking time bomb.

Datuk Bagindo of the Federation of All Indonesian Workers Union and House of Representatives legislator Ismoe Handoko shared the dire outlook, with Ismoe raising alarms over possible "disintegration and social revolution".

But Minister of Manpower Fahmi Idris was optimistic that the high unemployment rate could be mitigated by increasing the export of labor. Speaking separately, Fahmi said the government would fight to reduce the unemployment rate to "between 10 and 15 million from the current 20 million."

Datuk insisted that around 38 million Indonesians will have lost their jobs by the end of the 1998/1999 fiscal year in March because of continued dismissals by troubled companies. Included in this figure were 5 million new graduates and school dropouts who could not find jobs.

"We are very pessimistic about labor conditions next year because of the poor economic condition this year and the political uncertainty in the coming months before the general election in June," he said.

He linked the economic growth of minus 15 percent and the inflation rate of 75 percent with the dismissal of 15 million workers over 1998. He did not believe there would be changes in the business climate and labor condition next year.

"If the government is honest, the economic growth this year is far below minus 15 percent and the inflation rate has reached 400 percent," he said adding that more than 50 percent, or 110 million, Indonesians are now living in poverty.

High unemployment rates combined with political uncertainty are a time bomb that could explode in the near future, he said. "Violence, looting, robberies and other crimes will be prevalent in all parts of the country, especially in densely-populated Java," he said.

Ismoe also expressed concern over the political situation. "More and more people can no longer eat three times a day because they lost their jobs, while those in the political elite are busy taking care of their own interests, and there are no signs the economic crisis will abate in the coming months," he said.

"Under these negative changes in society, crimes, looting, violence and rioting linked to religious and ethnic group affiliations will likely be rampant. It is probable that the reform movement will turn into a social revolution," he said.

Fahmi expressed his optimism that the labor situation would improve in the coming year because of some expected economic improvements. "Despite poor economic conditions, the government is optimistic that the economy will grow from the current minus 15 percent to minus 5 percent in the coming year and the inflation rate will be maintained at a rate of less than 20 percent," he said.

He said the govrnment is determined to reduce the unemployment rate to between 10 million and 15 million from the current 20 million. Besides "expanding job opportunities at home", the government would encourage the export of labor to ease the unemployment problem. "The labor export program will continue, although it is not now a strategic way to solve the unemployment problem," he said.

Ismoe concurred on this matter, and said Indonesia should accelerate its efforts to promote cooperation with other countries, especially those in the Middle East, so they would be willing to open their markets to Indonesian workers.

"Many countries have opened their labor markets to Indonesian workers but the government has been slow in its response, " he said. He said that he recently visited Kuwait, Qatar United Arab Emirates and Saudi Arabia, and found the countries eager to employ more semi-skilled and skilled workers from Indonesia. He added that the Ministry of Foreign Affairs should also help by using its diplomatic relations to seek more job opportunities for dismissed Indonesian workers.

Both Ismoe and Datuk urged the government to carry out the social safety net program to employ as many dismissed workers as possible. "Workers need no rulings ILO (International Labor Organization) Conventions or advice from the government. They need jobs and money to survive the economic hardships," Ismoe said.

Datuk hailed the government's plan to provide Rp 17 trillion to finance labor-intensive projects to help jobless people in the coming year. "We want the social aid to trickle down to all those who are waiting for it," he said.