Govt urged to help staffs of closed banks
Govt urged to help staffs of closed banks
JAKARTA (JP): Legislators and economists have urged the
government to provide a financial package and technical
assistance to workers of insolvent banks facing closure next
week.
Paskah Suzetta of the House of Representatives' Commission
VIII for state budget and finance said on Saturday the move must
be effected immediately through the issuance of a presidential
decree stipulating a fund allocation to help employees of the
closed banks.
"So far the government has only focused its attention on the
assets of the banks which will be liquidated and the
recapitalization program of surviving banks," Paskah said on the
sidelines of an economics seminar held by the Indonesian
Financial Sector Union (IFSU).
"Its concern is mainly to save public funds and the government
money that has been spent on those insolvent banks," he said.
The welfare of the dismissed bank workers so far remains
uncertain, he said.
The government plans to announce late next week the name of
banks qualified to join its recapitalization program, and those
which would be closed down due to insolvency.
The announcement was initially scheduled on Feb. 27, but a
last minute decision delayed the plan.
Bank Indonesia governor Syahril Sabirin has said that the
number of insolvent banks which would be closed down could reach
40.
IFSU has estimated earlier that 25,000 workers in the private
banks might face lay off if the government closes down 40 of
them.
The government has also announced its plan to lay off some
8,000 of the 26,000 employees of four state banks which would be
merged into the newly established Bank Mandiri.
Several other legislators and business analysts have expressed
a similar concern. They said a special assistance package should
be created to help the dismissed workers.
Economist Hartojo Wignjowijoto decried the government's
seeming lack of anticipation of potential labor disputes arising
from the massive lay-off after the closures.
"The government should provide funds to retrain those who lost
their jobs to help them find jobs in other countries," he said,
adding, "there are many countries like Vietnam, where demands for
financial industry workers are high."
Meanwhile, the state-owned social insurance company PT
Jamsostek said on Thursday it would pay out at least Rp 200
billion (about US$23 million) in old-age benefits to tens of
thousands of laid-off casualties of the private and state-owned
banks.
"We have allocated about Rp 50 billion for staff of the state-
owned banks, and the remaining Rp 150 billion for employees of
the private banks which are to be closed down," Jamsostek
Director Bambang Purwoko was quoted by Bisnis Indonesia daily as
saying.
Every company employing more than six people is required to
contribute to Jamsostek 5.7 percent of its worker's basic salary
as old-age savings. The employee provides 2 percent of the
amount, and the employer the remaining 3.7 percent.
The funds can be disbursed when the employee reaches the age
of 55, dies, or is laid off.
IFSU vice Chairman Estian Adrianto said many of the government
moves since it began restructuring the banking sector in 1997 had
not taken into consideration the welfare of bank employees.
He cited bank mergers, closures and management take-overs by
the government.
Since the government first liquidated 16 ailing private banks
in late 1997, some 8,000 of the bank employees who lost their
jobs had not received sufficient compensation, he said
"The employees were never involved or informed in taking a
decisions that affect their lives, either by the government or
the management," Estian said.
Last year the government closed down 10 more insolvent private
banks and nationalized four ailing private banks. (das)