Crisis could 'lead to widespread strikes'
JAKARTA (JP): Unless properly addressed, the current economic crisis could spark widespread strikes that would threaten sociopolitical stability, labor activists warned yesterday.
In a hearing with the House of Representatives, activists of the Center for Labor and Development Studies led by Bomer Pasaribu said unemployment had reached the "red alert level."
"If these (widespread strikes) do happen, it will undoubtedly worsen the situation and scare off potential investors," said Bomer, who is also a deputy chairman of the Federation of All- Indonesia Workers Union.
The center was presenting to House Commission VIII for the state budget, finance and technology its views on reform in a 23- page paper titled Monetary Crisis and Political-Economic Reform.
Bomer said the predicted zero percent economic growth would lead to massive unemployment, weakening purchasing power and, eventually, the closure of factories.
"To solve the economic crisis, the government needs to follow all of the 50-point IMF reform package," he said, referring to the letter of intent signed by the International Monetary Fund and President Soeharto Jan. 15.
He said the reform package, a more "pro-efficiency policy", needed to be implemented in a consistent way, but there should also be a special package that was more "pro-employment" which would facilitate total reform.
"Without the pro-employment policy, the recession (the harsh effect of the IMF-led pro-efficiency policy reform) will push the rate of unemployment even higher," Bomer said, referring to reform policy that would be directed at cutting unemployment.
Bomer reckoned the policy would help cut the number of jobless people this year from 4.6 million to 2.14 million.
Without the policy, the number of totally unemployed people would be 13.5 million this year, or 4.6 million more than last year's 8.8 million.
"However, if pro-employment policy programs are carried out consistently, total unemployment could be brought down to 10.94 million (instead of 13.5 million)," he said.
Bomer said there were two concrete steps which could help lower the unemployment rate.
The first was crash programs -- there were seven of them according to Bomer -- such as the creation of labor-intensive projects which were initiated by the government earlier this year.
Such programs were meant to tackle with unemployment and poverty at the grassroots level, he said.
The second was "structural programs" -- 15 of them are already in progress -- such as reforms of the job market, bank credit schemes, and making the economy more resource-based.
"All these reforms should have two ultimate goals, the creation of employment and products that are market-oriented," Bomer said. (aan)