Indonesia’s capital girded for a potential turnout of millions of protesters asking for a bigger increase in minimum wages in the world’s fourth most-populous nation, a test of President Joko Widodo’s pro-business image.
The two-day national protest, starting Dec. 10, will involve four trade union groups, Muhammad Rusdi, a secretary general at the Indonesian Trade Union Confederation, or KSPI, said by phone in Jakarta yesterday. Workers have seven demands including renegotiating last month’s minimum-wage deal and scrapping outsourcing in state-owned companies, he said.
Jokowi, as the president who took office in October is known, has pursued a two-pronged economic strategy of addressing income inequality and boosting Indonesia’s appeal for investment. Faster wage gains would erode a competitive advantage against China as manufacturers look for alternative production locations and contribute to inflation as Jokowi boosts fuel costs.
“The government and employers are likely to tough it out,” said Keith Loveard, head of political risk at Jakarta-based security company Concord Consulting. “Employers are genuinely squeezed by higher costs and high logistics costs at a time when the market, both domestic and export, is relatively weak.”
The planned strike follows smaller demonstrations against the move to raise gasoline prices about 30 percent last month, with the president’s ability to weather the opposition hinging on convincing the public that billions of dollars in savings will be spent to improve their lives. Minimum wages in Jakarta are set to rise 11 percent next year, less than unions wanted. – Bloomberg