100,000 textile workers may lose jobs in 2002

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Some 100,000 textile workers may lose their jobs next year due to a combination of the global economic slump and unfavorable domestic conditions, according to a top industry executive.

"If the (global and domestic) situation keeps worsening, it is possible that the workforce will be cut by up to 100,000," Benny Sutrisno, chairman of the Indonesian Textile Association (API), said on the sidelines of an industry discussion on Tuesday.

He said that job cuts would be inevitable due to sluggish demand caused by the world recession and as a cost-saving measure amid plans to raise fuel and electricity prices, and shipping costs.

Workers' salaries account for about 12 percent of the industry's production costs, he added.

Citing latest reports, Benny said that about 5,200 workers in the industry had been laid off this year, but he suspected that many other employees had been suspended to minimize costs.

The textile industry employs about 1.2 million people, mainly in Bandung (West Java), Tegal, Pekalongan, Surakarta (Central Java), Mojokerto (East Java) and Bali. Of the total workers, 600,000 people work in textile companies in Bandung.

The global economy slowdown, exacerbated by the Sept. 11 attacks against the U.S., has caused the country's textile orders to drop significantly throughout the year.

The association has said that because of the global slowdown, 2001 textile exports would likely fall by 25 percent to US$6.15 billion in value from $8.2 billion last year.

The export volume is also expected to drop to 1.5 million tons this year from 1.7 million tons in 2000, it said.

It also forecast that 2002 textile exports would fall by 20 percent to a value of $4.96 billion, while volume would decrease by 10 percent to 1.35 million tons.

Meanwhile, Minister of Manpower and Transmigration Jacob Nuwa Wea said that the government was planning measures to try to avoid the massive layoffs predicted by API.

"It's still an estimation ... we'll do our best to help avoid lay offs in the textile industry," he told The Jakarta Post.

But he did not specify the action to be taken.

Jacob urged textile companies to take several steps to avoid job cuts, including reducing work hours and stopping kickbacks to government officials.

Workers should also refrain from doing anything to worsen the situation, such as staging strikes to demand higher pay, he added.