Abdul Latief refutes World Bank report<\/p>\n
YOGYAKARTA (JP): Minister of Manpower Abdul Latief said the
\nIndonesian government will review its daily minimum wage
\nstandards annually to maintain workers' well-being and
\nproductivity.<\/p>\n
"The triple hike in the daily minimum wage level in the last
\ndecade has not hurt the flow of foreign investment into
\nIndonesia," he said in an interview with The Jakarta Post on
\nMonday.<\/p>\n
"I have checked on it (with the office of investment
\ncoordinating board) and found that foreign investment in
\nIndonesia has not dropped in the last decade."<\/p>\n
Latief was responding to a recent World Bank warning that the
\ndaily minimum wage levels set by the government were inadequate.<\/p>\n
In its 1996 report, the bank warned the 5.5 percent annual
\nhike between 1970 and 1991 could erode Indonesia's
\ncompetitiveness, lower employment growth, worsen poverty and
\ntrigger labor unrest.<\/p>\n
The report also stated that the minimum wage regulations
\nissued in 1989, made minimum wages on average triple in nominal
\nterms and double in real terms between 1989 and 1995.<\/p>\n
"The government is committed to annually reviewing the daily
\nminimum wage level to improve the welfare of around 40 million
\npaid workers in the country as well as to enhance the
\ncompetitiveness of Indonesian products on the global market,"
\nLatief said.<\/p>\n
Latief was in Yogyakarta for two days to forge cooperation
\nbetween his ministry and local small and mid-sized businesses to
\nencourage employment in the province.<\/p>\n
He said the government could no longer use its cheap-labor
\npolicy to woo foreign investors because, besides immiserating
\nworkers, it would make workers unproductive and Indonesian
\nproducts less competitive.<\/p>\n
"That is why the government has pushed for the increase in
\nminimum wages in the last decade -- to boost the economic growth
\nand to enable workers to improve productivity," he said.<\/p>\n
He said next year the government will raise the daily calorie
\nintake a single worker needs from 2,600 to 3,000. This will
\nincrease wages by at least 8.6 percent.<\/p>\n
He said the increase is based on a recent study by the
\nMinistry of Health. The ministry found a single worker needs at
\nleast 3,000 calories a day.<\/p>\n
Latief, who is also the founder of the ALatief Corporation,
\nclaimed increased minimum wages have improved workers' purchasing
\npower and helped strengthened small and mid-sized businesses,
\nespecially those in the informal economy. (rms)<\/p>",
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