Government urged to start more labor-intensive schemes

Government urged to start more labor-intensive schemes

YOGYAKARTA (JP): The government is being urged to implement
labor-intensive programs throughout the country to avoid possible
unrest due to the swelling number of unemployed or laid-off
laborers.

Sociologist Nasikun told The Jakarta Post that such projects
should not only focus on Greater Jakarta.

"Have they thought about the conditions in the outer regions?
I can understand that the largest allocation has gone to Jakarta,
but don't neglect the regions," said the Gadjah Mada University
lecturer.

Nasikun warned that labor unrest could spark larger social
unrest.

"In the short-term, the projects are the most appropriate
step, at least till March. The government is of course concerned
about securing everything for the general session of the People's
Consultative Assembly," he said.

To help alleviate the number of unemployed laborers, the
government has initiated labor-intensive programs for unskilled
laborers.

The Rp 33 billion labor-intensive public works project in 30
mayoralties and regencies in Jakarta, and in West, Central and
East Java is aimed at creating temporary jobs for 3.9 million
people. It will run until March.

The local chairman of Yogyakarta's Association of Indonesian
Young Entrepreneurs (HIPMI), Dwiyanto, said about 75 percent of
the branch's 300 members are faced with the threat of closing
their businesses due to the dire economic situation.

Dwiyanto said yesterday that should the situation continue,
many would be driven to bankruptcy.

"The main problem is we don't have enough funds to pay
employees' salary and the bank loan," Dwiyanto told The Post.

Of the 300 members of HIMPI, 80 percent are small enterprises
while the rest are lower-middle enterprises. They include
property, construction, agriculture, education and other service
sectors.

Almost all the businesses are said to funded mainly by bank
loans.

But interest rates have shot up and the number of loans
available are extremely limited.

"In the past three months we could only get a maximum loan of
Rp 50 million with interest of between 24 percent and 27 percent
per year from state banks and up to 34 percent a year from
private ones," he said, adding that most of HIPMI's members were
debtors of the private banks.

Nasikun said that a severe paradox now faced the nation as the
demand for an increase in the minimum wage was critical at a time
when businesses were facing tough economic prospects.

He said that minimum wages at its current level was only
sufficient to sustain daily living, while prices were continuing
to soar.

"In such a crisis situation as we are facing now, I can
imagine the difficulty in their lives," he said.

Nasikun said he therefore supported a recent proposal by
industry associations which suggested that the money companies
have to pay to the state social insurance company PT Jamsostek
for each worker be diverted instead to pay for wage increases.

"During such a crisis situation it could very well be used to
help pay for a wage increase ... It's better than being used to
pay for a meeting of legislators," he said referring to a recent
scandal in which Minister of Manpower Abdul Latief admitted that
billions of PT Jamsostek funds had been used to finance
deliberations of a controversial manpower bill. (swa/44)