8,000 state banks employees face dismissal

8,000 state banks employees face dismissal

JAKARTA (JP): The government plans to dismiss some 8,000 of
the 26,000 employees of four state banks to be merged into the
newly established Bank Mandiri, the bank's president Robby Djohan
said on Saturday.

Robby said the government would provide Rp 800 billion (US$94
million) in severance pay to compensate the 8,000 employees of
Bank Dagang Negara, Bank Bumi Daya, Bank Exim and Bank
Pembangunan Indonesia (Bapindo) facing dismissal.

"We only need 18,000 workers out of the 26,000," he said on
the sidelines of a seminar on economy and technology held by the
German-Indonesian Forum here.

Previously, the government had expected to dismiss over 10,000
employees from the four banks.

He made assurances that there would be enough money to finance
the redundancy payments.

The merger process of the four banks into Bank Mandiri, set up
last year to take over the four banks' assets, will be completed
in two years.

Robby also said that the government expected to issue a
regulation regarding the transfer of nonperforming assets of the
four banks into the Asset Management Unit of the Indonesian Bank
Restructuring Agency (IBRA) by Monday.

The government had initially planned to announce the transfer
of the nonperforming loans to IBRA on Friday, but the
announcement was delayed.

The government also delayed its plan to disclose on Saturday
the private banks which are eligible to join the government-
sponsored recapitalization program and those facing closure. The
announcement will be made in two weeks.

Bank Indonesia Governor Sjahril Sabirin said that the number
of banks which do not qualify for recapitalization and are
therefore facing closure could reach about 40.

The newly formed Association of Banking and Finance Workers
Union estimated early last week that at least 25,000 workers
could be affected by the closures.

This figure excluded the employees of state banks, the
association said.

It also estimated that dismissed managerial-level employees
could live on their severance pay for 18 months, but lower-level
workers would find their compensation adequate for only six
months.

Last week, IBRA Chairman Glenn Yusuf said that nine banks had
confirmed their commitment to acquire 500 branch offices,
including some 10,000 employees of the insolvent banks, expected
to be closed down in two weeks by the government.

Business opportunity

Meanwhile, business consultant Amir Karamoy called on the
government to provide "business opportunity schemes" to help the
thousands of employees in the banking and financial sectors
facing job dismissal.

Amir, a senior consultant of the AK & Partners franchise
consulting firm, said the move was urgent to anticipate a boom in
the number of unemployed trained and skilled personnel.

"The business opportunity scheme is basically a business
partnership between large, medium and small companies including
cooperatives, or between individuals or groups of entrepreneurs,"
he said.

The scheme could be applied to franchise and nonfranchised
businesses, he said.

"Those who lost their jobs could use their severance pay as
capital to form franchisees, and with the help of their
franchisers run new businesses."

They could also become involved in nonfranchised businesses on
a range of levels: as distributor or dealer, business partner,
multilevel marketing person, license holder of small retail
chain, or run a "coin-operated business" such as a
telecommunications kiosk.

The government could involve state firms like oil and gas
company, Pertamina, or telecommunications operator PT Telkom to
provide business opportunities as distributors, he suggested.

For example, Pertamina could provide schemes for people to
distribute its oil and gas products, while Telkom could offer
opportunities for people to invest in telecommunications kiosks
or coin telephones in revenue-sharing schemes, he said.

"In the United States, similar business schemes have existed
since the 1970s. Institutions such as the U.S. Federal Trade
Commission and the Small Business Administration played a central
role in their development," he said. (rei/das)