Fewer workers laid off in Q1, but risks loom<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Due primarily to a more conducive business environment and higher
\neconomic growth, the number of local workers losing their jobs in
\nthe formal sector declined sharply in the first quarter of this
\nyear, as compared to the same period last year.<\/p>\n
However, while praising the current administration on the
\nprogress, experts warn that the full-year number could surpass
\nlast year's figure unless the government takes necessary steps to
\naddress prolonged problems faced by the business community.<\/p>\n
Based on a report obtained by The Jakarta Post from the
\nMinistry of Manpower and Transmigration, 22,647 workers lost
\ntheir jobs in the January-March period, mostly due to company
\nclosures and downsizing.<\/p>\n
It is 50 percent of the 44,350 workers laid off in the
\ncorresponding period last year.<\/p>\n
\"The decline is primarily attributable to a better economic
\ncondition and higher economic growth,\" said Musni Tambusai,
\ndirector general of industrial relations at the Ministry of
\nManpower and Transmigration.<\/p>\n
Based on the report, 85 percent of the laid-off workers, or
\n234 cases involving 19,287 workers, was due to a decision by
\ncompanies to improve their operational efficiency to cope with
\nthe high-cost economy.<\/p>\n
Twelve percent of the figure, or eight cases involving 2,616
\nworkers, was due to bankruptcy, while only 3 percent of the
\nfigure, or 574 cases involving 744 workers, was for personal
\nreasons.<\/p>\n
Musni, however, warned that layoffs could be much higher for
\nthe full year with, for example, firms engaged in the forestry-
\nbase business experiencing a business downturn due to a lack of
\nraw materials.<\/p>\n
\"The forestry and textile sectors account for the lion's share
\nof last year's layoffs. However, during the first quarter, the
\nforestry business was in the doldrums and is likely to account
\nfor most of the layoffs this year,\" said Musni.<\/p>\n
He said the government should take immediate steps to address
\nthe problems faced by forestry businesses in order to prevent
\nfuture massive layoffs similar to last year.<\/p>\n
The layoff figures were collected by the Committee for the
\nSettlement of Labor Disputes in the regions and in Jakarta.
\nPrevailing regulations stipulate that any company's layoff plan
\nshould first be registered with the committee for approval.<\/p>\n
The committee is under the auspices of the Ministry of
\nManpower and Transmigration.<\/p>\n
Meanwhile, while acknowledging that the lower layoff figure
\nmay reflect improvement in the country's business climate,
\neconomist Sri Adiningsih of Gadjah Mada University said it would
\nstill worsen the problem of open unemployment in the country.<\/p>\n
\"Reducing unemployment is the government's most daunting task
\nto address. We hope in the immediate future the government can
\njust prevent existing firms from closing down or downsizing their
\nbusinesses to prevent more layoffs,\" said Sri.<\/p>\n
She suggested that the government boost the role of small and
\nmedium enterprises to help absorb the unemployed in the immediate
\nfuture, while preparing for the construction of massive
\ngovernment infrastructure projects.<\/p>\n
The projects are expected to absorb at least 500,000 workers
\nthis year alone. The figure is far from enough to help reduce
\nthis year's open unemployment, which is estimated to reach around
\n10.5 million.<\/p>\n
The government estimates economic growth this year will reach
\n5.5 percent, higher than the 5.13 percent last year. A 1 percent
\ngrowth in the economy is estimated to provide up to 400,000 new
\njobs.<\/p>",
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"sponsor": "Okusi Associates",
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