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32449
Wed, 11/26/2008 - 10:08
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News Focus: INDONESIAN WORKERS FACING MASSIVE LAYOFFS

By Andi Abdussalam
Jakarta, Nov 25 (ANTARA) - Hundreds of thousands of Indonesian workers at home and abroad are facing the threat of losing their jobs as a result of the global financial crisis. At home about 200,000 will likely be laid off shortly. In Malaysia, the main destination of Indonesian migrant workers, at least 300 thousands are facing the same fate, while hundreds of others are waiting repatriation from Kuwait.

"We have to make all-out efforts to prevent massive layoffs," General Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Ms Hidayat said on Monday. He said he had witnessed that the economic recession in the United States had really taken place. Thus, labor intensive industries at home need to make all-out efforts in order to prevent massive layoffs.
In Malaysia about 3,000 Indonesian migrant workers are facing the same fate. According to Indonesian Ambassador to Malaysia Dai Bachtiar, about 300 thousand Indonesian workers (TKIs) would likely face layoffs due to the on-going global economic recession.
"I am concern with Indonesian workers employed in Malaysian companies whose number reaches 300 thousands," the ambassador said. According to him, the impact of the global economic crisis has not yet been felt by most of Indonesian migrant workers who are bound with work contracts. But workers at Malaysian companies will face the impact if demand for the companies' production fall.
Therefore the ambassador expressed concern over Indonesian workers at Malaysian companies. Those working as domestic helpers and are bound by work contracts will not be much affected. "But this all will depend on the policy of the Malaysian government," the ambassador said.
In the meantime, at least 380 Indonesian migrant workers are facing repatriation in Kuwait. They are now placed at the Indonesian embassy. They are among Indonesian problematic workers in that country.
In order to help their repatriation, Moh Jumhur Hidayat, Head of National Workers Protection and Placement Overseas (BNP2TKI), flew to Kuwait to meet the problematic TKIs.
Luckily, the Kuwait Union of Domestic Labor Office (KUODLO) has promised to help repatriate about 380 problematic Indonesian workers now being placed at the Indonesian Embassy.
KUODLO chairman Fadel Mohammed Al Sharaf said it was ready to help. "We are ready to provide assistance," Al Sharaf said in a meeting with Jumhur in Kuwait on Monday night.
In the January-July 2008 period, according to the Indonesian embassy, 12,205 Indonesian workers had been placed in Kuwait, the third biggest after Saudi Arabia which has 75,770, and the United Arab Emirates 14,191 in the same period.
At home, Indonesian companies have begun entering the difficult phase. Kadin chairman for fiscal and monetary affairs Bambang Soesatyo said on Tuesday that about 200,000 workers will be laid off in the coming six months in Indonesia as a result of the financial crisis. Many businesses in December 2008 are likely to announce minus profits.
Kadin General Chairman MS Hidayat said that labor-intensive companies had sent signals of layoffs. "This begins with placing workers at home because demand for products had been declining. This trend will increase next January where labor intensive industries have to be safeguarded," Hidyat said.
Attention must also be given to exporter companies as the main foreign exchange earners so that they would not be affected by the rupiah depreciation and would survive the 2009 crisis.
One of the factors that had begun to affect businesses is the depreciation of the rupiah against foreign currencies, the US dollar in particular. The rupiah has fallen to Rp12,000 per US dollar, even it happened to touch the Rp13,200 level.
The depreciation of the rupiah to the Rp13,200 per US dollar was the weakest one since the 1998 financial crisis when it was recorded at Rp16,800 per US dollar.
On the layoff issue, Bambang said the weakening of the rupiah hampered companies to boost their production. At the same time, demand for goods abroad was also declining.
Bambang said goods purchase contracts were to expire in December and many of them were not likely to be extended. Therefore, the number of trade contracts next year was expected to decline. As a result, production of goods at home would also drop.
The solution that could be made, he sad, was to generate infrastructure development to accommodate workers. The funds for infrastructure development are however taken from the state budget, whose absorption is rather slow.
"Up to November 2008, the absorption of the state budget was only 60 percent. About 90 percent of the state budget is kept in banks," he said.
The other solution, he said, was to increase cuts in the price of premium gasoline from Rp500 per liter to Rp1,500 per liter. The diesel oil price also needed to be cut by Rp1,000 per liter. "A cut to that extent will be significant in raising the purchasing power of the people," he added
Even though many workers are facing layoffs, those working with crude palm oil industries still could breathe fresh wind. Palm oil industry workers could still be safeguarded from layoffs despite the fact that demand for crude palm oil (CPO) has been declining since the second semester of 2008.
"I don't think it is that easy for industries to lay off their workers because it would neither that easy for them to find suitable workers when the economic crisis has recovered," General Chairman of the Indonesian Oil Palm Businessmen Association (Gapki), Akmaluddin Hasibuan said.
He said that industries needed to carry out capital restructuring if they lay off their workers. Over the past few months, CPO industries have been facing difficulties due to the global financial crisis that had spread to various parts of the world.
Hasibuan said that layoffs is possible if the capital structure of industries was not strong. He said that factors in other countries should also be taken into account. "If the composition of the funds is 90 percent from banking credits, the industries concerned will face problems because they would bear a too heavy burden," he said.

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