Govt urged to curb corruption prior to fuel price increase

Govt urged to curb corruption prior to fuel price increase

Rendi A. Witular, The Jakarta Post, Jakarta

As corruption in the provision of public services and a high-cost
economy continue to burden the business community, the
government's plan to hike the prices of oil-based fuels was the
last thing that business people needed.

Higher fuel prices will only place new burdens on both
employers and workers, said the Indonesian Employers Association
(Apindo) secretary-general Djimanto.

"We are tired of the government's repeated pledges to combat
corruption. Smuggling and illegal fees are still rampant and have
gradually undermined our existence. We don't want higher fuel
prices to add to the list of our woes," he said on Friday.

The employers' objections to the higher fuel prices were
expressed during a meeting between the representatives of workers
and employers and the five economic ministers -- Coordinating
Minister for the Economy Aburizal Bakrie, Minister of Trade Mari
Elka Pangestu, Minister of Industry Andung Nitimihardja, Minister
of Transportation Hatta Radjasa and Minister of Manpower and
Transmigration Fahmi Idris.

President Susilo Bambang Yudhoyono confirmed on Friday that
fuel prices would go up on Oct. 1, with State Minister of
National Development Planning Sri Mulyani Indrawati saying
earlier that the hike would likely be in the range of 50 percent
in order to ensure budget sustainability.

Aburizal said that apart from the government's efforts to root
out corruption, it would also provide tax incentives to the
business community and workers under draft amendments to the tax
legislation being deliberated by lawmakers.

During the meeting, the labor representatives also urged the
government to raise their minimum wage before or immediately
after the fuel price hike to enable people to cope with higher
food prices and transportation costs.

They also urged the government to ensure that "there will be
no massive layoffs after the hike" by companies trying to cut production
costs.

"If this happens, we will stage strikes and demonstrations,"
said Ruslan, representing the workers' side, adding that the
unions also urged the government to improve public
transportation.

Responding to the submissions, Fahmi said the government was
planning to raise the minimum wage next year by between 10 percent
and 15 percent.

"We cannot immediately raise wages right after the fuel price
hikes as this would worsen inflation. We plan to raise them
starting on Jan. 1, 2006." he said, adding that the government
had issued a ruling to allow workers' wages keep pace with the
standard human needs (KHL) index.