Bank workforce vulnerable

JAKARTA (JP): Approximately two-thirds of the banking and financial sector workforce could be laid-off as a result of the economic crisis and reforms which need to be taken, the Federation of All-Indonesia Workers Union (FSPSI) said.

Head of the union's commerce and banking industry sector, Bomer Pasaribu, said here Tuesday that people would continue to lose jobs in the banking sector until only one-third of those originally employed remained.

He added that the cuts were in accordance with reforms stipulated in the letter of intent signed by Indonesia in exchange for assistance from the International Monetary Fund (IMF).

"Indonesia doesn't have any other choice, and neither do the employees," he said, adding that the current predicament was a result of poorly planned development in the banking sector.

Bomer lamented the layoffs in the banking sector because the employees were both skilled and educated.

"About 95 percent of them are educated, so it would be dangerous to leave them unemployed for long," he remarked.

Bomer did not say exactly how many people could eventually lose their jobs. However, he pointed out that the seven banks suspended by the government on Saturday and the seven which are now under state management employed a total of 25,000 workers.

From the banks now under the supervision of the Indonesian Bank Restructuring Agency (IBRA), Bank Danamon, Bank Umum Nasional and Bank Dagang Nasional Indonesia employ the highest number of workers.

Antara quoted Bomer as saying that although the three banks continued to operate, layoffs in response to a decline in business resulting from public loss of confidence would be very likely.

Bank Danamon was in the process of dismissing 700 workers even before Saturday's announcement placed it under state management, he noted.

"And remember that 40 other banks are already under IBRA management and supervision, although the banks have not yet been named," he said. (mds)