With many industries resorting to production cuts amid weakened demand, hurting their revenue, layoffs next year could reach far more than 1.5 million, business associations are warning.

In addition to estimated dismissals of up to 150,000 workers in the textiles and garments industry next year, as predicted by its association, the footwear as well as food and beverage industries will also be hit hard by lower demand, forcing them to reduce production, which could lead to layoffs.

Eddy Widjanarko, chairman of the Indonesian Footwear Association (Aprisindo), said the industry would see nearly 10,000 layoffs by the end of 2008 and another 30,000 next year.

The footwear industry generated US$1.6 billion from exports in 2007, with $1.7 billion targeted this year.

Franky Sibarani, regulation division head of the Indonesian Food and Beverage Association (Gapmmi), said small and micro food and beverage producers, who worked only based on orders, would be the most severely hit by the crisis.

However, the largest number of layoffs will likely come from the construction sector, amounting to around 1.5 million, according to Sofjan Wanandi, chairman of the Indonesian Employers Association (Apindo).

"The government should start its infrastructure projects, including the development of roads, electricity, piped water and irrigations, as early as Jan. 1."

The government estimates about $65 billion will be needed in new infrastructure investment in the next three years. – Mustaqim Adamrah/Multa Firdaus/Nana Rukmana