Rizal urges action to prevent industries from leaving RI
Rizal urges action to prevent industries from leaving RI
JAKARTA (JP): Coordinating Minister for the Economy Rizal
Ramli has asked the related ministries to take immediate action
to prevent foreign electronics and shoe manufacturers from
leaving the country.
Rizal said on Tuesday that he had instructed Minister for
Industry and Trade Luhut Pandjaitan and Minister for Manpower and
Transmigration Alhilal Hamdi to address the problem.
"I have asked the minister for manpower to meet with the heads
of labor organizations to come to an understanding that will
satisfy both investors and labor unions," Rizal said following a
meeting with the House of Representatives' special committee for
the amendment to the central bank law.
Rizal was responding to newspaper reports that a number of
major shoe and electronics manufacturers were considering moving
their operations out of Indonesia on fears of labor disputes.
Fifty textile companies were reported to have already moved
part of their production activities to Vietnam and Cambodia.
Secretary-general of the Indonesian Footwear Association
(Aprisindo) Djimanto said that most of the foreign shoe
manufacturers were no longer interested in establishing new
investments here.
He said foreign investors feared they would be unable to meet
orders because of the uncertainty in deliveries.
Aside from the frequent labor conflicts, political instability
has caused several large companies to stop expanding in
Indonesia.
According to him, because of their more disciplined workers,
Thailand, China and Vietnam are currently favored for investment.
He criticized the Indonesian labor movement as too unruly.
Since the reform era in 1998, local labor organizations have
instigated numerous strikes and demonstrations against local and
foreign companies.
When negotiations falter, most labor unions resort to strikes
to force the management to bow to their demands.
Before they would have risked confronting the police who were
less tolerant of protesters.
But Rizal added that the workers would suffer the most if
strikes and demonstrations prompted foreign industries to abandon
Indonesia.
"If investors leave Indonesia, the ones loosing their jobs are
the workers," he said.
Rizal said that some foreign investors preferred to move their
operations out of Indonesia because their companies here still
depended heavily on imported material for production.
The shoe industry, he said, provided Indonesia with an added
value of only between 5 percent and 10 percent because of its
high dependence on imported raw material.
"So even with a minor labor problem, they (investors) prefer
to reallocate," he explained.
Rizal also said that locally made spare parts should be made
more attractive to investors in order to reduce the country's
dependence on imported ones.
According to him, improving the quality of locally made spare
parts would help encourage investors to retain their operations
here. (bkm)