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Jakarta Post

Govt fears further lay-offs as workers take to streets

  • Haeril Halim

    The Jakarta Post

Jakarta   /   Tue, September 1, 2015   /  01:11 pm

With the economic slump continuing, the government is expecting lay-offs to increase.

The Central Statistics Agency (BPS) recorded that the economy grew 4.67 percent in the second quarter this year, lower than the 5.12 percent growth it saw in the same period last year. The bad news has taken its toll, with several firms dismissing workers.

Manpower Minister Hanif Dhakiri had called on businesses to use termination of employment only as a last resort.

'€œFrom the data we have today [Monday], the number has reached 26,000 [workers], whereas earlier we predicted 30,000. The government is currently working hard to fix the economy and stop more workers being made redundant. We expect companies to use redundancy as a last resort,'€ he said after a ministerial coordination meeting ahead of Tuesday'€™s scheduled mass protest driven by fears of redundancy.

At least 50,000 workers from Greater Jakarta are reported to be preparing to march from the Hotel Indonesia traffic circle to the State Palace to demand swift action from the government to prevent lay-offs.

Coordinating Political, Legal and Security Affairs Minister Luhut Binsar Pandjaitan said that the government welcomed the rally, but would deploy police and military personnel to guard it.

'€œThe government is aware that there are still demands from workers that it cannot accommodate because of existing regulations, but the government wants its workers to be prosperous,'€ Luhut said.

The government, Hanif said, was currently developing community-based programs to facilitate the growing number of laid-off workers in order to keep them '€œeconomically competitive'€.

'€œThe fall-back programs are in the form of labor-intensive and entrepreneurship programs,'€ Hanif added.

Indonesian Coal Mining Association (APBI) chairman Pandu Sjahrir said that at least 3,040 small-scale coal miners in Sumatra and Kalimantan were struggling to maintain operations, as coal prices continued to decline. '€œMost [firms] that have stopped operation are in Sumatra; about 50 percent of mines operating in the region,'€ he said as quoted by Kontan weekly.

In Kalimantan, he added, about 30 percent of total mining companies had ceased operations.

Indonesian Palm Oil Producers Association (Gapki) secretary-general Togar Sitanggang said the palm oil sector had yet to see any lay-offs.

'€œThe effect [of the weakening economy] is more apparent in the declining price of the commodity itself. We haven'€™t heard of any redundancies yet,'€ he said.

Retailers have also felt the pinch of the weakening business climate.

Traders at Glodok City Market in West Jakarta have seen the sales of electronic goods decline as a result of the rupiah'€™s sharp depreciation against the US dollar.

The currency'€™s fall has pushed prices of imported goods up, while public purchasing power is weakening.

Elsa, 24, a trader at the market, said her revenue from the sales of electronic household goods, such as rice cookers, irons and blenders, had declined by 30 percent since June. '€œCustomers appear to be cutting back, while we'€™ve had to raise our selling prices by at least 10 percent.'€

Glodok City Market is the most popular electronics shopping center in the capital. However, last Saturday, the market, which is usually full of customers from inside and outside Jakarta, was quiet, with several blocks entirely desolate. Most of the electronics on sale at the market, Elsa said, were imported from China, Japan, South Korea and the US.

Boseph, another trader, had a similar story. His kiosk, selling cameras and tripods, had seen a month-long decline in customers, causing a revenue slump of 30 percent. '€œI have been a trader here for 12 years and this year is the worst.'€ (foy)

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