The portion of labor
intensive industry in GDP was constantly contracting as investors were more
inclined to use machines instead of manual ways. Benny Soetrisno, Vice Chairman
of KADIN Indonesia, Labor Division stated in Jakarta on Tuesday [2/12] that
today labor intensive industry in GDP constituted only 40% of total industry.
This figure could even continue to contract to 30%. Benny said that automation
in many industry lines was inevitable in industries where manual ways normally
needed like textile, leatherwork, footwear, tobacco, and F&B. high business
competition forced businesspeople to go the efficient way.
Benny rated that application of technology ensured high
efficiency compared to manual ways. Automation might axe half of production
cost. The raw material factor constituted around 60% of total cost. The two
factors separated, there would be 40% left for electricity cost, manpower, and
automation. Benny further stated that in labor intensive industry, energy
saving could be half the cost but in labor intensive industry 30% - 40% would
be spent on labor.
He disclosed that the Ministry of Industry set target of
employing 400,000 to 500,000 workers in industry each year. Benny said that it
was not impossible to meet the target provided investment was jack up. Now the
ratio was : for every one percent of economy growth only 200,000 workers were
employed against the previous 400,000 workers. Through January-September
investment in manufacturing was Rp.148 trillion originating from domestic and
foreign investment. The Coordinating Board of investment [BKPM] posted domestic
investment at USD 10.1 billion.
Total investment targeted today was Rp.210 trillion and
for the next year set at Rp.270 trillion, this investment increase was
Government assumption basis that there would be employment of 500,000 workers
next year. The Ministry of Industry set target for labor next year at 15,44
million people. Over the year the number was projected at 14,88 million people
which was not easy to realize due to automation.
The same opinion was set forth by Arryanto Sagala of
BPKIMI of the Ministry of Industry. According to Arryanto labor intensive
industry must not be seen from the viewpoint of labor but also productivity. He
showed as an example the textile industry in Vietnam posted higher productivity
than Indonesia. In Vietnam the industry could produce 8 trousers per day with 44
hours per week. In Indonesia 6 trousers per day with 40 hours of working hours
per week.
Under the circumstances the Ministry of industry wished
to show that workers should not merely demand high wages. When company’s
productivity was high, workers’ salary would be high. BPKMI noted that increase
of production cost had always posed as obstacle. The cost was for labor and
electricity. Arriyantio said that the labor intensive sectors. Minimum wages in
Indonesia was one of the Top Three Highest in Asean. In Vietnam USD 113, Cambodia
USD 80 and Indonesia USD 226 per month. (SS)
Business News - December 5, 2014
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