Bomer breaks ground on Indonesia's labor front

Bomer breaks ground on Indonesia's labor front

JAKARTA (JP): For many years, Indonesia's unemployment rate
has been put officially at less than five percent of its labor
force, now estimated at 100 million. Even during the peak of the
economic crisis in 1998 and 1999, the government still insisted
that unemployment remained low.

But after Bomer Pasaribu assumed the post of minister of
manpower in October, the official unemployment figure jumped to
23 million people, with several million others underemployed.

What happened?

Euphemizing -- a game previous administrations liked to play
-- is behind this discrepancy.

"I use a more realistic definition of unemployment, which is
the number of people who are seeking jobs," Bomer said in a
recent interview.

In the past, the government defined a person as employed if he
or she had worked for at least one hour in the past week.

Such a definition, officials then argued, was more realistic
for Indonesia where 60 percent of the workforce are in rural
areas, when during the low season, many often need to work only a
few hours a week to tend their farms.

But critics believe that the definition had been used more for
political purposes to conceal the severity of the unemployment
situation in Indonesia.

Going by the old definition, the unemployment rate in
Indonesia had always been low, even lower than most advanced and
industrialized countries.

"I used to joke that Indonesia should give aid to Japan and
European countries because we were in a better position," said
the long time union activist.

"So long as we stick to this kind of definition of
unemployment, poverty in this country will remain," he argued.

As minister of manpower, Bomer is building his programs and
policies around the unemployment problem.

"I believe that many problems in this country can be traced to
unemployment," he said, citing the growing crime rate, drug
addiction and trafficking and even violent unrest.

Compared to his predecessors, 56-year-old Bomer was probably
the most familiar with the problems confronting the office when
he assumed his job. Fahmi Idris (1998 to 1999) and Abdul Latief
(1993 to 1998) both came from the business sector.

Bomer had been active with the All Indonesian Workers Union
(SPSI), which for many years was the only government-sanctioned
labor union during the Soeharto regime. He chaired FSPSI, when
the union became a federation.

He has also been an active member of the Golkar Party, and he
owes his Cabinet seat to Golkar chairman Akbar Tandjung.

His union and political background probably explains why he
has moved swiftly to promoting his programs among colleagues.

Bomer said he had won assurances from the International
Monetary Fund (IMF) that the government's macroeconomic policies
in the future would be more "employment-friendly".

In the past, all IMF policies were "pro-efficiency", he said,
recalling the example of the government's decision to close down
dozens of commercial banks in 1997 and 1998 as part of the
conditions for a massive IMF bailout program.

In the future, policies should be directed at attaining both
efficiency and employment, he said, adding that this would be
reflected in the next letter of intent that the new
administration will sign with the IMF later this month.

Bomer said he sits in on meetings led by both the coordinating
minister for economy, finance and industry, and coordinating
minister for people's welfare and poverty eradication. This
allows him the luxury of lobbying many fellow ministers to sell
his ideas and initiatives on employment generation -- one of the
Cabinet's top priorities.

"I can't go it alone," he said.

With the coordinating minister of people's welfare, for
example, he has lobbied that the government's social safety net
programs be tied to employment creation programs, rather than
simply be disbursed to the needy.

"Rp 10 trillion in the social safety net program could
disappear just like that," he said. "Why not spend it on job for
food programs?"

Bomer is also drafting a number of reform proposals.

In the fiscal and monetary sector, for example, he proposed to
reform the credit market, redressing the imbalance in which some
80 percent of all bank loans currently go to big businesses.

He also proposed "land market reforms" to eliminate the
massive concentration of landownership and allow millions of
landless peasants to buy their own land. "How could a person in
Indonesia own land the size of Switzerland? I don't understand."

He was careful in asserting the word "market" in his proposal,
not only because the term "land reform" is still associated with
the traumatic communist proposal of the 1960s, but also because
everything today must be "market driven".

Bomer will not encounter much of a problem in convincing the
Cabinet to implement reforms in industrial relations, because the
previous administration signed and ratified no less than seven
International Labor Organization (ILO) conventions.

Indonesia became the most advanced in Asia in terms of ILO
conventions. "On paper, Indonesia is a heaven for labor," he
said.

He recalled that when he attended this year's ILO congress as
a FSPSI representative "Indonesia received massive applause for
its strong commitment to labor causes".

"But don't ask about implementation," he said, adding that
putting these conventions in practice, which would empower
workers and unions, would be a great challenge for him.

Changes are already occurring, and there are now no less than
21 labor federations and 94 trade unions.

Bomer is also considering the introduction of the employee
share ownership program, a scheme that has become so successful
in Germany and Scandinavian countries that strikes and labor
unrest have become rare.

Indonesia would also have to reform labor laws in compliance
with the ILO conventions, he said, adding that for the first
time, Indonesia would soon have a specific law on labor unions.

Bomer said his office was revamping the way the minimum wages
are calculated, and in keeping with the decentralization
measures, they would now be determined at provincial levels.

The minister also promised to revamp the way social security
is managed, permitting greater private sector involvement.

Ultimately, none of his aggressive proposals will have any
real meaning unless the economy picks up soon to absorb the
millions of people who are currently unemployed.

Bomer said that if a 1 percent economic growth would generate
between 400,000 and 500,000 jobs, the converse was also true,
that a 1 percent economic decline would lead to an equivalent
amount of job losses.

So when Indonesia's economic growth rate dropped from 7
percent to negative 13 percent, that represented a 20 percent
turnaround, or about 10 million lost jobs.

He said that if before the crisis, there were some 2.2 million
young people joining the labor market each year, during the
crisis, the number swelled to 3.2 million, as many young people
dropped out of schools or universities because they could not
afford the tuition fees.

While national unemployment appears to be his greatest worry,
Bomer did not seem bothered by speculations that he too could
soon lose his job in the Cabinet.

Bomer is one of several names that have often cropped up in
the rumor mills after President Abdurrahman Wahid disclosed that
three ministers were being investigated for corruption.

The rumors suggested that Bomer may have been involved in a
scandal at PT Jamsostek, the state-owned social security company.

"I've been asked that question so many times, and each time I
have denied it. I can only keep denying it." (emb)