Fate of employees of liquidated banks
Fate of employees of liquidated banks
From Media Indonesia
In the last few days the media have reported that thousands of employees of private banks closed on March 13, 1999, have staged demonstrations at Bank Indonesia (BI) on Jl. Thamrin, the office of the Indonesian Bank Restructuring Agency (IBRA) on Jl. Sudirman and the office of the National Development Planning Board on Jl. Diponegoro.
In the meantime, some 8,000 employees of state banks, which also have received Bank Indonesia liquidity aid amounting to trillions of rupiah, have been vying with one another to be laid off because of the large amount of severance pay they would receive (the highest amount is Rp 700 million for a Class I Branch Manager). These two events are really ironic because they reflect the condition of social justice in Indonesia.
What will be the fate of the some 17,000 employees of the liquidated banks? How will they feed their families? Many lives obviously are at stake now. Besides these employees of liquidated banks, the victim of the bank liquidations is the entire Indonesian population because the liquidity aid from Bank Indonesia, trillions of rupiah, is actually the Indonesian people's money. If this amount were used to eliminate poverty, it would considerably alleviate poor people's suffering. It is deplorable that this huge amount of money, extended to both state and private banks as liquidity aid from Bank Indonesia, only has enriched business tycoons.
The major mistakes committed by Bank Indonesia as this country's monetary authority are as follows:
1. Extending liquidity aid to banks managed by irresponsible bankers.
2. Fully guaranteeing the money of bank customers but not the fate of some 17,000 employees of liquidated banks. Guaranteeing the deposits of customers will lead to negative spread, meaning that the deposit interest rate will be higher than the loan interest rate. If this condition persists, it will have adverse impacts on the capital of banks and in turn the capital adequacy ratio of the banks will become minus. (Both BRI and BNI feel uneasy receiving the transferred funds from customers of liquidated banks).
3. No speedy and serious effort has been made to take to court the owners/management of liquidated banks or miscreant debtors who have deliberately turned their debts into backlog debts or gone abroad with the liquidity aid.
Allow me now to call on the government to assume a fair attitude toward the dismissed bank employees. At least the government can fulfill 50 percent of their demand; i.e. giving them five times as much severance pay as stipulated in Article 25 subarticle 1 of Minister of Manpower Regulation No. 3/1996. Indeed, BI and IBRA are responsible for the consequences of bank liquidations. If the closed banks had not previously been given Bank Indonesia liquidity aid they would have gone out of business naturally without interference from the International Monetary Fund.
HARRY S. HARYONO
Jakarta