Thu, 20 Feb 2003

Leave workers out of it!

May I suggest Neil Kearney of the International Textile, Garment and Leather Workers Federation (Union blasts fleeing footwear companies, The Jakarta Post, Feb. 14) does his homework on the social and economic realities that exist in the places he is about to visit before embarking on a trip and talking gibberish.

Workers and democracy have very little or nothing to do with the current exodus of footwear (and other) manufacturers form Indonesia. Behind this mass flight is a level of corruption that renders their business unsustainable.

Logistics are a nightmare. Example: To cream even more from importers and exporters, the ministry of finance revoked the pre- shipment inspection system, exposing manufacturers to corrupt customs officials when they import raw materials, and again when they export their goods.

Since Kearney seems to be knowledgeable in matters of countries investing in EPZs (Export Processing Zones) maybe someone should enlighten him that corrupt practices place these zones in Indonesia among the most expensive, albeit worst maintained, in Asia.

Many investors, especially those from Korea, are backed by big corporations that have the financial clout to ride out prolonged economical downturns. They are moving out now after long, elaborate evaluations and the conclusion that Indonesia has become an impossible place to do business. Obviously, they are too polite to say so and cite other "strategic" reasons.

If things were "just a little bit" normal here (there is no need for extra perks such as tax rebates), manufacturers would be able and willing to pay their workers 2.5 times the current minimum wage and still be profitable, as well as globally competitive. Unfortunately, political developments are such that real checks on corruption and a transparent economical environment will remain a wild, elusive dream for a long time to come. As far as factories taking their businesses elsewhere are concerned, the worst is yet to come.

PATRICK SCHWARZ, Amlapura, Bali