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)