DATE=2/22/2000
TYPE=CORRESPONDENT REPORT
TITLE=INDONESIA / ECON (L-ONLY)
NUMBER=2-259422
BYLINE=PATRICIA NUNAN
DATELINE=JAKARTA
CONTENT=
VOICED AT:
INTRO: The Indonesian government is putting
forward two controversial proposals aimed at
bailing the country out of its economic crisis --
while maintaining political stability. But as
Patricia Nunan reports from Jakarta, the decision
to cut subsidies on fuel and electricity and a
separate proposal to raise the country's
minimum wage is being criticized as insufficient.
TEXT: Indonesia's Ministry of Manpower says the
national minimum wage for unskilled workers will
be increased between 15 and 55 percent --
depending on the province. As of April 1st,
workers living in the capital Jakarta will see
more than a 23 percent rise in their monthly
incomes - an increase of approximately 38 dollars
per month.
In the northern province of Aceh, where
separatists are demanding independence from
Indonesia, workers will receive a 55 percent pay
boost. In Irian Jaya, another region with a
breakaway movement, the raise will be 40 percent.
But the move aimed at appeasing both separatist
groups and Indonesia's growing number of poor has
failed to impress the country's labor unions. The
groups say that with inflation soaring by 78
percent in 1998, the pay increases still will not
meet basic living costs in most regions.
The All Indonesia Workers' Union Federation says
the new minimum wage standards are simply "not
acceptable" and is threatening a nationwide
strike to push for higher pay increases.
At the same time, a special parliamentary
commission is debating whether fuel prices in
Indonesia should be hiked by 10 percent, as
proposed by some legislators, or by the full 20
percent demanded by the International Monetary
Fund.
The I-M-F is providing Indonesia with a 46
billion dollar bailout package intended to rescue
its economy, which has been mired in crisis since
the collapse of the national currency, the
rupiah, in August 1997.
Critics say the price hikes -- caused by the
lifting of government subsidies on fuel -- would
strike Indonesia's poor the hardest.
But the I-M-F and other international aid
organizations say it is time for the subsidies to
go, adding that they are only benefiting large
businessmen. Parliament has already agreed to
raise the cost of electricity by almost 30
percent starting April 1st. But legislators say
there will be no price hike for diesel oil or
kerosene, which is used by many poor families for
cooking.
A 1998 decision to eliminate the fuel subsidies
in line with I-M-F demands, was one of the
factors behind a wave of anti-government protests
that helped force former President Suharto from
office, after 32 years in power.
The violence prompted the I-M-F to postpone the
lifting of the subsidies until Indonesia's
political situation became calm.
The World Bank says almost two-thirds of
Indonesia's 210 million people live below the
poverty line. It describes the crash of one of
Southeast Asia's most vibrant "tiger economies"
in 1997 as "the most dramatic economic collapse
anywhere in 50 years". (SIGNED)
NEB/PN/FC
22-Feb-2000 05:27 AM EDT (22-Feb-2000 1027 UTC)
NNNN
Source: Voice of America
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