Companies employing youth get incentives

JAKARTA (JP): Several provincial administrations are now giving incentives to companies in industrial estates which employ and offer part-ownership to young people.

Minister of Industry and Trade, Tunky Ariwibowo, and State Minister of Youth Affairs and Sports, Hayono Isman, said yesterday the incentives were provided by the local governments of Semarang, Central Java, and Medan, North Sumatra.

A special youth program is to begin in Medan's Industrial estate. Semarang will soon have a similar estate.

Yesterday, Tunky and Hayono signed a joint ministerial decree to encourage companies to participate in the "industrial estate for youths" program.

Tunky said the program was aimed at recruiting young people to be entrepreneurs and workers in industrial estates. Those eligible are young people who have taken up training and apprenticeship programs in Indonesia or overseas.

The first stage of the program will involve Taiwanese investors that have relocated their operations from Taiwan to Indonesia. These companies either operate in Medan's industrial estate or will soon invest in Semarang's.

So far some 30 Taiwanese companies had proposed joining the program, he said.

"All the companies are small and medium-sized. Most of them produce parts and components for the automotive, agriculture and electronic industries, among others," he said.

Hayono said that apart from the incentives provided by the Investment Coordinating Board, the companies would also receive incentives from provincial administrations. These would include local tax exemptions and simplified administrative procedures.

Hayono said that in the long run, the youths were expected to become shareholders in the companies.

"They can form joint ventures with foreign firms and at the same time, occupy the industrial estates," he said.

He said that in the beginning, the youths were expected to have a 2.5 percent stake in the company while the investor owned the remaining 97.5 percent.

"They can get the money from their savings or from the apprenticeship programs they have joined, or they can get a loan from the firm they work for," he said, adding that the 2.5 percent share was expected to gradually increase.

Hayono said the program was aimed particularly at youths from middle and low-income families. (pwn)