Chief Economic Minister Says No Investor to Leave Country

Bandung, West Java - Chief economic minister Hatta Rajasa has said no foreign investors plan to leave the country following recent labor demonstrations. "I have checked with the head of BKPM (the Investment Coordinating Board) and (found) no investor have said such a thing," he said at a dialog on economic nationalism here on Saturday. Workers have recently held rallies in many parts of the country to demand wage increases. Hatta said the workers¿ demand for an average of Rp2 million per month across the country was reasonable and must be met. "I believe employers could understand it," he said. With regard to companies that could not meet such a raise in wages, he said he would ask the manpower minister to issue a regulation about this. He said the state is ready to reduce its revenues from corporate taxes, if necessary, to allow companies to continue operating their businesses. The minister, meanwhile, emphasized the importance of paying special attention to the garment and shoe industries, with regards to the wage increase issue. He also said the government had to eliminate costs that burden industries and cause inefficiencies, but industries must not make up for such costs at the expense of workers' wages. The minister called for workers to avoid anarchism and harassing those workers who do not want to participate in rallies or vandalism in factories, saying that conducting demonstration is legal, but it must not be done without anarchy. The minister also said what was important was never to reduce workers' rights for business purposes. He added that negotiations must be conducted between Apindo (business association), the government and the workers. "I talked for five hours with labor leaders in my house to discuss the raise," he said. He noted that the role the state would play was in increasing efficiencies, such as eliminating factors that create high cost economies, creating a good business climate, eradicating illegal levies and preventing corruption or collusion. He said if the state failed to play a role, the social cost would be very high.(*)