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Okt '07

Govt asked to ease pain of oil prices

With world crude oil prices now hovering above US$90 per barrel, Indonesia must resort to efficiency to maintain its competitiveness, says the Indonesian Employers’ Association (Apindo).

Apindo chairman Sofyan Wanandi said last Saturday that employers had no choice but to be more efficient and cut back on imported raw materials.

However, he said the government could help by improving the investment climate — such as eliminating the high-cost economy so as not to further erode the country’s industrial competitiveness.

“With the current hike in oil prices, manufacturing industries will probably have to raise their product prices by up to 10 percent and rationalize their labor in January to minimize the negative impacts of the soaring the oil prices,” he said after the official opening of Apindo’s offices in Banda Aceh on Saturday.

While the government subsidizes fuel used by households, no such breaks are offered to industry.

Sofyan said employers were still committed to raising workers’ monthly minimum wages in January, as reported earlier, but would demand more understanding from workers and labor unions over the trouble the country’s industries are currently in.

Last year, the minimum wage was raised by an average of 11 percent around the country.

Djimanto, Apindo secretary general, called on the government to continue eliminating the high-cost economy, while also remaining committed to improving damaged infrastructure as a way of reducing the burden on the business community.

“Despite some progress in the ongoing reviews of taxes and investment and export-import permits, complaints persist over the red tape and illegal fees still imposed on them and a bigger part of the infrastructure, like road networks, remain poor.”

Djimanto added that labor-intensive manufacturing industries such as leather and chemical products were the worst hit by the high oil price as most were still importing their raw materials.

He said that at the moment, labor issues were no longer the main hurdles for foreign investors, thanks in part to the recent agreement made by employers, workers and the government on dealing with dismissals.

“The three-party forum has agreed with the draft regulation on severance funds that will be managed and provided by the state-owned insurance company, PT Jamsostek.

“The new scheme will assure dismissed workers’ rights to receive severance payments while employers are required to prepare the reserve funds.”

Meanwhile, chairman of the Confederation of Indonesian Prosperous Labor Unions, Rekson Silaban, called on small- and medium-scale firms to uphold transparency to develop a sustainable business and avoid industrial disputes with workers.

“Workers and labor unions are open to dialogs to create industrial harmony, provided employers are also transparent in their financial reports. Their decisions and policies will then gain support from the workers,” he told The Jakarta Post.

Sumber : (Ridwan Max Sijabat) The Jakarta Post, Banda Aceh

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