Indonesia Vice President Boediono has thrown his support behind wage
increase demands by labour unions, which have intensified in the last few
weeks.
"Improvement in the welfare
of our working population is one of the government's top priorities,"
Boediono said in his keynote speech during the first Indonesia Investment
Summit in Jakarta yesterday.
At least six provinces in the
country have agreed to increase the regional minimum wage for 2013, with 27
others expected to follow suit, following strikes and protests by labour unions
throughout the country.
Boediono urged businessmen and
prospective investors to understand the labour movement's demands for better
pay and work conditions, which he argued as the fruit of the country's maturing
democracy.
"We all should respect it
[the labour movement] accordingly," he said.
Boediono described investors and
businessmen in the country as "the goose laying the golden eggs",
heaping praise on them for the important role they play in Indonesia's economic
performance and who must be protected for the sake of the economy.
However, he argued that the
"goose" should not be the only one enjoying the benefits of the
golden eggs.
"Let us also make sure that
the benefits are shared fairly among those who have contributed to the laying
of the golden eggs," the vice president said.
"It is in the best interest
of all to strike an appropriate balance between ensuring business activities
prosper and enhancing the welfare of the working population — one cannot have
one without having the other," he added.
Speaking to investors attending
the summit, Boediono reaffirmed the government commitment to
"systematically improve the business and investment environment" in
Indonesia, a country that has recently become the new darling of overseas
investors due to its stable economic growth, growing middle class and young
demographic workforce.
The two-day summit, held by the
Investment Coordinating Board (BKPM) and the first event of its kind in the
nation's 67-year history, attracted more than 500 participants from 29
countries, exceeding the board's initial target of 300 participants.
"The response is well beyond
our expectations," BKPM Chairman M. Chatib Basri told reporters on the
sidelines of the summit.
"It really reflects the
enthusiasm of investors toward Indonesia — this shows that Indonesia is back on
the radar screen."
Besides holding closed-door
meetings with prospective investors, the BKPM also held panel discussions, with
invitations to top government officials as well as analysts from international
organisations such as the World Bank, McKinsey & Company and Moody's Investors
Service. The meetings gave insights on investment opportunities in the country
and the medium-run forecast of Indonesia's economic sustainability.
Analysts agreed that, despite
slowing down to 6.17 per cent in the third quarter, Indonesia's economy would
retain its six-plus per cent of economic growth in the medium- and long-term
due to strong investment growth, as well as its consumption-driven economic
model, which has proven resilient against the global downturn.
To ensure Indonesia remains the
best bet for investments, they also said that Southeast Asia's largest economy
needed to resolve the ongoing dispute between workers and businessmen, which
may prompt concerns among investors about the safety of establishing business
in the country, among other issues such as improving its infrastructure and
eliminating the burden some fuel subsidies.
"I believe that labour
issues have recently become more prominent it is important to settle the labour
issue because obviously it will affect the investment climate," said
Stefan G. Koeberle, World Bank country director for Indonesia.
Business Desk
Business & Investment Opportunities
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