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).