'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)