Foreign-funded projects to be labor-intensive

JAKARTA (JP): State Minister of National Development Planning Ginandjar Kartasasmita said yesterday that most foreign-funded projects in the 1998/199 fiscal year would be designed to help cope with the unemployment problems caused by the economic crisis.

Ginandjar, who is also the chairman of the National Development Planning Board, said the World Bank and the Asian Development Bank had agreed to the government's request for a labor-intensive approach to projects funded by the two institutions.

"The World Bank usually won't make any changes in its TOR (terms of reference)," he said, adding that the revision would focus on using masses of labor and keeping a very low import content.

He explained that the government would try to absorb as much labor as possible through its labor-intensive projects to minimize unemployment resulting from the financial turmoil.

He was speaking at a seminar commemorating the 30th anniversary of the ruling Golkar faction of the House of Representatives.

Manpower Minister Abdul Latief has estimated 8.5 million people will be out of work by the end of this year.

Ginandjar said the labor-intensive projects would be prioritized for seasonal laborers who migrate to the big cities, especially Jakarta, and poorer people both in cities and rural areas.

He said that blue-collar workers who had recently lost their jobs because of the crisis would be a second priority because they had received three months severance pay.

This is at odds with a recent statement by Latief that announced the priority would be given to white-collar workers.

The government has allocated Rp 1.8 trillion in its 1998/1999 draft budget to finance the labor intensive projects. The World Bank has pledged US$1 billion.

Some of the projects have already started. They include clearing the country's filthy drainage systems.

"But once all these are in place," Ginandjar said, the project would be directed at the blue-collar workers.

He, however, said that for this type of worker the funds would be focused on providing entrepreneurial training and capital, so they could develop new businesses.

Meanwhile, former economic and environment minister Emil Salim criticized the House, especially the majority Golkar faction, for failing to oversee the government's executive function during the last 30 years.

Other speakers and participants also agreed that such a lack of control, especially during the last five years, had partly caused the current crisis.

Emil urged the House to be more active in articulating the interests of marginalized people, especially in protecting them from the hazards of the painful IMF economic reforms, which the government had agreed upon in return for a US$43 billion bailout.

He stressed, however, that since President Soeharto had given his commitment it was important for the House to support the reforms. (08)