Wages and efficiency

On April 1 regional minimum wages for all Indonesian workers will be increased by an average of 10.07 percent. The increase was given a rather cool welcome by the All-Indonesia Workers Union (SPSI), which had hoped for an increase of at least 15 percent. SPSI chapters in the provinces also appear to be disappointed after hoping for a 20 percent increase. The SPSI's federation chairman, Bomer Pasaribu, said the increase was small considering last year's inflation rate of 6.5 percent.

Little has been heard from our nation's businesspeople. They probably realize that the decision was not only based on economic considerations, but also political ones. To balance the increase, businesses will hopefully attempt to improve efficiency and persuade their workers to step up productivity.

Another helpful measure would be for the government to eliminate hidden extra costs, which arise from an inefficient government bureaucracy. These costs are much more burdensome to businesses than any wage increases.

An attempt to eliminate these extra costs would help our entrepreneurs improve operating efficiency and boost our national exports.

-- Bisnis Indonesia, Jakarta