Do workers turn away investment?

Do workers turn away investment?

By Vedi R. Hadiz

SINGAPORE (JP): Like most Indonesians, industrial workers have
expected that reforms instigated after the fall of Soeharto would
be beneficial to all areas of life. But also like most
Indonesians, these workers have become disappointed at the way
the process of reform has proceeded up to this point.

Clearly, the miserable living standards and working conditions
that workers have had to endure have not changed at all. This is
in spite of the periodic rise in minimum wages, which of course
is mainly eaten up by the constantly rising cost of living.

There are no surprises here though. Indonesia's economic
recovery process has stalled and investors still find Indonesia a
difficult and uncertain place to do business.

Unlike the recent claims of some business associations,
however, Indonesia's unattractiveness as a site of production is
not fundamentally due to rising worker demands.

It is connected much more intimately to the fact that
reformasi has not swept aside predatory forms of bureaucratic,
business and political behavior, which in fact have been
replicated ad infinitum at the local level.

From the point of view of the workers' struggle to better
guarantee their social and economic interests, an essential
problem is that the reform process has not produced conditions
that enable them to organize more effectively. It is true that
social and political reforms have greatly loosened the stringent
restrictions previously in place with regard to labor organizing.
Workers are much freer today to form unions.

Indeed, there are dozens of new unions -- though, perhaps,
some less genuine than others -- registered with the Ministry of
Manpower and Transmigration. In theory, workers should be better
placed to effectively protect their interests, for example, in
the process of collective bargaining.

However, the reality is very different. Workers are still
under immense pressure when they attempt to organize in the
workplace and often have to confront better organized gangs of
hired thugs, whether or not working in connivance with the
security apparatus.

Such gangs -- often dressed in the attire of paramilitary
forces linked to some of Indonesia's major political parties --
have apparently replaced local military commands in the role of
quelling labor unrest. During the New Order, it was believed by
some in government that the utilization of brute force would be
sufficient to keep workers "in their place".

Today, industrialists who hire such thugs will soon learn the
same lesson. Rather than suppressing industrial action, this
strategy seems to have contributed to the further proliferation
of worker protests. Thus, many industrialists have complained
that a day does not go by in Indonesia without some form of labor
unrest.

The reason for this is quite simple -- the fundamental sources
of worker grievances have not been properly addressed. In fact,
this is an almost impossible task during such a grave economic
crisis -- though it does not necessarily follow that economic
recovery will see these grievances addressed.

But to make matters worse, there seems to be the belief that
dealing with workers as equals would only encourage them to
constantly "dare" ask for more. In fact, a major problem has
always been that workers do not trust their employers, whom they
believe are selfishly exploiting them -- and whom they regard as
unwilling to seriously treat workers as equals.

Indeed, there is this cultural propensity on the part of more
powerful and wealthy Indonesians -- whether in business or
government -- to adopt a condescendingly paternalistic attitude
toward workers. Thus, unlike some other countries, it has been
very difficult to expect transparency to characterize
negotiations between adversaries in industrial disputes, and
therefore for the emergence of amicable solutions.

But the fault does not only lie with employers, the
government, the security forces, or even the hired hoodlums who
have found a new, lucrative, field of activity in the midst of
the economic (and political) crisis.

Part of the fault lies with workers themselves. Workers have
not been able to capitalize optimally on the new-found freedom to
organize. The labor movement remains badly splintered. There is
little cooperation and coordination among the many different
labor organizations.

Operating under already difficult conditions -- a chronic
labor surplus economy exacerbated by the economic crisis and
global capital mobility in the most labor-intensive of industries
-- workers cannot expect to negotiate from a position of strength
if they are deeply fragmented.

Such fragmentation, in turn, has been made worse by the fact
that political opportunists have taken advantage of the loosened
formal controls over labor organizing by establishing unions with
little grassroots support, but which they envisage might be a
tool in future struggles among the political elite.

Up to now, however, most of the major political actors have
disregarded labor -- considering it a negligible social force.
No major party has a concrete agenda on labor reform -- in spite
of the pervasiveness of populist and egalitarian rhetoric across
the political spectrum -- simply because the interests of labor
are not represented within these parties, many of which merely
harbor old predatory interests in new guises.

Of course, in part, this is the legacy of 30 years of
authoritarian rule, in which labor was systematically
disorganized as a matter of state policy. The only labor union
federation in existence was a mere tool to hinder independent
organizing. It will take much time for workers, at the grassroots
level, to re-learn the skills of organizing effectively (labor
unions played a major role during particular phases of
Indonesia's nationalist struggle). It will also take time for
real labor leaders to emerge from the grassroots.

It is unfortunate that, until then, labor will likely continue
to be ignored or repressed.

The writer teaches at the Department of Sociology, National
University of Singapore. He is the author of Workers and the
State in New Order Indonesia (London, Routledge, 1997).