Closures in manufacturing sector on the rise: BPS

Rendi A. Witular, The Jakarta Post, Jakarta

As many as 650 large and medium-size manufacturing companies closed down last year, while another 673 decided to downsize their activities or merge with other companies, to cope with the lingering economic crisis, according to government data.

A total of 226 firms merged last year, while 447 downsized, the data stated.

Data from the Central Bureau of Statistics (BPS), made available exclusively to The Jakarta Post, stated that in 2000, the number of "inactive" firms reached 1,149.

The agency uses the term "inactive" to refer to companies that close down, merge with other companies or downsize.

The data has painted a clearer picture of the grim situation in the country's manufacturing sector, which has suffered the brunt of the economic crisis.

The agency estimated that at least 100,000 workers were laid off in the manufacturing sector last year, up from the estimated 87,370 the previous year.

The agency recently stated the country's full and part unemployment had reached at least 38 million, while independent analysts put the figure higher, at 40 million to 45 million.

The agency defines a large company as one that employs 100 or more workers, while a medium firm has 20 workers to 99 workers.

Head of the BPS industrial statistical subsection Rifa Rufiadi said that, based on the preliminary data collected by the agency, the number of large and medium-size companies that became inactive this year would likely be surpassed this year.

However, she declined to make an estimate, saying the agency was still calculating it.

However, an official at the agency reckoned the likely total to be 1,700 to 2,000 firms.

Labor-intensive sectors, such as textiles, garments and leather goods topped the "inactive" list last year, at 349 companies, followed by food, beverage and tobacco (346), and the wood, bamboo, rattan and willow sectors (236).

The report was based on a survey of more than 20,000 manufacturing firms across the country in 2001.

"We distributed questionnaires to all manufacturing firms. If a firm did not return its questionnaire, we asked BPS personnel to check whether the firm was still operating or not," Rifa said by way of explanation.