'Move labor-intensive industries out of Jakarta'
'Move labor-intensive industries out of Jakarta'
JAKARTA (JP): President Soeharto wants labor intensive industries moved out of Jakarta and its surrounding towns and has asked Minister of Manpower Abdul Latief to look into the matter.
The proposal was disclosed by Latief yesterday following his meeting with the head of state at the Merdeka Palace.
The minister said the proposal calls for the relocation of labor intensive industries from Greater Jakarta to other provinces in Indonesia where wages are lower.
Such relocation would also resolve the current problem whereby most industries, labor and capital intensive, are concentrated in Jakarta and West Java, according to the President. It would also stem the flow of rural migrants to the Indonesian capital.
Soeharto, according to Latief, suggested that industries be encouraged to relocate in places like Central Java, Yogyakarta and East Java.
Latief said his office plans to launch a study to look into the President's proposal, and will ask provincial administrations about their capability to accommodate these labor intensive industries.
Most investors choose Jakarta, or the surrounding Tangerang and Bekasi cities, and to a lesser extend Bandung, for the location of their manufacturing plants largely because these cities have the necessary infrastructure, such as access roads and electricity supplies.
Soeharto's proposal, if implemented, will call on labor intensive industries such as textiles to find a new location where wages are relatively lower than in Jakarta.
The government sets minimum wage levels for each province in Indonesia in accordance with the standard cost of living. For Jakarta and West Java, the minimum wage level is set at Rp 3,800 a day. Yogyakarta has still one of the lowest minimum wage levels in the country with Rp 2,200 a day. The daily minimum wage level in East Java is Rp 3,000 and in Central Java it is Rp 2,700.
The minimum wage levels will be increased by between 11 and 34 percent beginning in April. In Jakarta and West Java, the new level will be Rp 4,600.
The President yesterday also asked Latief to monitor the implementation of the increases of the minimum wages which in the past has often caused labor unrest because of companies' refusals to comply.
The President also wanted a close watch kept on the payment of the extra-month salary workers are entitled in connection with the Idul Fitri Moslem holiday, Latief said.
The minister said so far he did not foresee any problem on both fronts.
On a separate occasion, Director General for Industrial Relations and Labor Standards Suwarto said at a hearing with the House of Representatives yesterday that the Ministry of Manpower has launched a campaign to disseminate information about the minimum wage hikes.
"We want to make sure that employers and workers know of their rights and obligations," Suwarto told the House's Commission VI which deals with labor affairs.
The government has said that companies unable to pay the new minimum wages could apply for exemption but that means their books would be checked by the government. (rms)