Anton warns of problems over minimum wages

JAKARTA (JP): Leading businessman Anton J. Supit warned on Monday of possible industrial disputes when hikes in official minimum wages come into force next month.

While many workers might feel that the increase was insufficient, some employers might also find it hard to increase the wages, Anton, who sits in the National Business Development Council (DPUN), told The Jakarta Post.

He cautioned that worker unrest would damage Indonesia's image overseas. "One of the concerns of foreign investors is the inclination of our laborers toward anarchy," he said.

Anton proposed the establishment of a joint committee -- comprising the council, the Indonesian Chamber of Commerce and Industry (KADIN) and labor organizations -- to address the problem.

The council was established in December to advise President Abdurrahman Wahid on microeconomic matters.

Official minimum wages will increase between 15 and 55 percent beginning April 1. In Jakarta, the monthly minimum wage will increase 24 percent to Rp 286,000 (US$38) from Rp 231,000.

Anton said the wage increase could force some companies to lay off more workers.

He likened the current situation facing many companies as a sinking ship. "We have to save the ship first because if the company is forced to close down, workers will also lose."

Anton, who is also a member of the Indonesian Exporters' Association (GPEI) said exports had hardly improved.

"Logically, if there is a depreciation of the rupiah's value, exports should increase, but they have not," he said.

Exporters faced two major problems: the security situation emanating from the political crisis and trade financing, he said.

While addressing the security situation, the government should also forge ahead with its program to restructure the banking sector, because one without the other would be useless, he said.

Citing the garment and footwear sectors, Anton said the ability of Indonesian exporters to deliver was crucial, especially given the nature of the fashion industry.

"If they miss the season, then they cannot sell." he said, stressing the importance of the government to resolve the security situation in the country.

Indonesian exporters also often lost momentum because they did not get the necessary financing on time, he said.

If they received extra orders, there would be a problem of who should finance them, he added.

Anton said now was the right time for Indonesia to reinvigorate exports, especially following President Abdurrahman's extensive overseas travels.

"This is the right momentum because we have gained the confidence (from abroad)," Anton said. (10)