President Susilo Bambang Yudhoyono has asked national industries to reign in spending in a bid to avoid mass layoffs when the economic downturn takes effect.

The president also ordered local administrations to temporarily accommodate sacked informal sector workers to reduce the impact of the global recession.  Yudhoyono said the ongoing financial crisis had led to domestic industries dismissing around 250,000 workers so far.

“The Indonesian government has been working hard to save the real sector and our business world. We have provided various incentives, including tax cuts and excise discounts, so that businesses will survive,” the president said Thursday during a visit to the Japanese-based printer manufacturer PT Indonesia Epson in Cikarang, Bekasi.

“Therefore I hope businesses can take the appropriate measures and strive for efficiency so they need not dismiss workers,” he said.

Earlier in the day, the President visited the factory of local tea beverage producer PT Sinar Sosro in Cibitung, also in Bekasi.

Accompanying the President were several cabinet members, including Industry Minister Fahmi Idris and Trade Minister Mari Elka Pangestu.

Yudhoyono said the government was committed to helping the business sector survive the crisis and prevent mass dismissals, despite the economic slowdown.

Fahmi and Mari assisted the President in choosing which companies they would visit, deciding on both domestic and foreign business.

Sosro and Epson were selected because despite the hardship, the labor-intensive companies continue to grow without laying off their workers. There are around 8,500 and 10,000 workers, respectively in each of the companies.    

“I know this is a hard time. We must do our best to help the business community and ensure it does not go into bankruptcy.

“Cutting taxes may result in declining government revenue, and our budget is indeed thinning. But that’s better than if the industry collapses and mass layoffs occur,” he said.

Yudhoyono, accompanied also by West Java Governor Ahmad Heryawan, told the heads of local administrations to treat informal sector workers in their respective areas with sensitivity and respect.

Before sweeping street vendors from public places, local administrations should think about solutions for the evicted traders to ensure they can continue supporting themselves, he said.

“Many of the 250,000 workers laid off now work in the informal sector. So, please, before giving chasing to these vendors, understand the current situation and perhaps assist them with some solutions. In the future when conditions are back to normal, you can commence sweeping the streets once more,” the President said.

Besides speaking briefly with the executives of the two firms Thursday, Yudhoyono also met with workers.

Visiting factories has become a common move for SBY, who has declared he is ready and willing to compete in the July presidential elections.

A recent survey conducted by a workers union found Yudhoyono is highly unpopular among laborers, who instead lean toward former president Megawati Soekarnoputri or the incumbent Vice President Jusuf Kalla.

The Indonesian Employers Association (Apindo) said most businesses may wait until after elections before deciding whether to lay off workers permanently, to minimize potential social unrest.

Companies will start to temporarily dismiss permanent employees in April during the general

election, Apindo chairman Sofjan Wanandi said.

“Then we will observe the economic situation after the elections. If things do not get any better, then there will be layoffs, unfortunately,” he said.

Apindo data showed that in Jakarta alone, around 4,000 employees had been sacked in December, with another 6,000 workers by the end of January.

On a national scale, almost 28,000 workers have been laid off since last September, with more in the tens of thousands expected to follow.

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