RI favors undervalued rupiah

RI favors undervalued rupiah

WASHINGTON (Reuter): Indonesia's Finance Minister Mar'ie
Muhammad said that his country would rather have its rupiah be
undervalued than overvalued.

The minister, speaking to a conference sponsored by the
Institute of International Finance, said Sunday that the country
intended to depreciate the currency by five percent per year
against the U.S. dollar.

"We are in favor of having a rupiah slightly undervalued
rather than overvalued," Mar'ie. "Our intention is to have five
percent depreciation."

To continue its recent levels of strong growth, Indonesia
would need massive investment, most of which would need to come
from private sector. "The private sector must be the engine of
growth in the next century," Mar'ie said.

Asked about allegations of labor abuses in Indonesia, the
minister said his government was concerned about the level of
salaries and working conditions in the country's factories.

"We are of course highly concerned and committed to improve
their working conditions," Mar'ie said. "We are concerned about
labor conditions, but we cannot compare conditions to those in
developed countries."

In June, a U.S. lobbying group that monitors manufacturing
practices said that U.S. sporting company Nike Inc used
sweatshops in Indonesia to make its popular Air Jordan basketball
sneaker and other products.

Human rights and labor advocates staged protests in Washington
in July demanding that Nike improve pay and conditions for its
contract workers in Indonesia. They accused the company of
dismissing workers unfairly, paying below the minimum wage and
forcing employees to work overtime.

Nike has said the protesters were citing situations dating
back to 1992 that have been corrected.