Indonesia's Next Crisis: Workers on Barricades

With 40 percent of people facing poverty, workers' protests rise, alarming the military.

A 15 percent increase in the minimum wage might seem like a gratifying result for striking workers.

But this is Indonesia, example of Asia's financial crisis at its extreme. Here in the country's second-largest city, many businesses do not pay the minimum 4,400 rupiahs per day - about 29 cents - labor activists say. The increase will make little difference when it goes into effect on Aug. 1.

Since former President Suharto's departure six weeks ago, the highly charged political atmosphere of student protests that led to his resignation has wound down. But despite some new freedoms, many fear that labor protests triggered by increasing poverty are even more likely to end in violence than the demonstrations that sparked riots and resulted in an estimated 1,188 deaths in Indonesia in May.

Raden Mas Buchary, administrator of the Tanjung Perak port here, is far from happy with the fresh breeze of democracy that has swept his country.

"All these people calling for reform, all these demonstrations, they only got the workers excited," he grumbles, raising his hands to mimic a tidal wave. "It used to be nice and quiet here. Now there is one strike after another."

At Tanjung Perak, some 5,000 dock workers refused to load ships for five days to demand a pay raise last month, and they won. Taxi drivers are complaining of worker marches blocking their path the way they used to complain about traffic jams. Nobody in Indonesia complained about an excess of protests before.

Mr. Suharto's authoritarian regime used to allow only one docile union and cracked down hard on independent labor activists, killing some, and sending others to jail for up to 13 years.

Protests were rarely allowed outside factory gates. "At every strike there were more military than workers," says Suliam, who prides herself on being fired four times for organizing protests. "Many intelligence agents posed as workers."

In the weeks following Suharto's resignation, however, his successor, B.J. Habibie, has signed international labor agreements, allowed the free formation of labor unions, and encouraged the powerful military not to crack down on public protests and strikes. Police now watch calmly as thousands of workers march through Surabaya almost daily, converging on city hall, where their chosen representatives meet with company directors and local officials to work out a compromise.

"Now we can breathe a little - just a little," says Irul, a woman who was fired for organizing a strike in 1993. "It used to be ... whoever got organized got fired or arrested. We're still not sure if this is real."

The dock workers of Tanjung Perak are now paid about 63 cents per day, up from 47 cents. That is more than twice as much as Surabaya's largest employer pays, but it is not enough to buy even a pound of dry milk powder.

In the most severe economic crisis in 30 years, inflation of more than 50 percent so far this year has eaten away at the purchasing power of millions of Indonesians. While the World Bank warned last month that a quarter of the country's 200 million people face acute poverty, on Wednesday Indonesia's food minister raised the number to 40 percent.

Mr. Buchary fears that ships will dock at competing ports, and notes that business has fallen by 30 percent. "The ones who lose are the workers," he says.

Instead of demanding a raise, many workers are reduced to fighting for severance pay they are owed, and often they lose because their employer has already gone bankrupt. Many enterprises opt to suspend without pay rather than dismiss, just to avoid severance fees.

WORKERS throughout Asia are facing the ax. South Korea said last month that its unemployment had almost tripled, while Malaysia's rate will triple this year. Japan posted a record 4.1 percent jobless rate, and Hong Kong a 15-year high of 4.2 percent.

But the worst hit by far is Indonesia. The World Bank last month predicted Indonesia's unemployment would quadruple to 20 million this year, not counting more than 50 million underemployed.

In contrast to the students whose protests demanded democracy, most of the labor activists in Surabaya say they have little interest in politics, and will focus on organizing and improving labor conditions even if wages cannot be raised.

"We just worry about the workers," says Sofi, a member of the Worker's Group of East Java, which hopes to register a labor union soon. "Politics is too far away."

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