50% of Export Workers Could Lose Jobs in 2009

Businessmen and experts on Wednesday warned of massive layoffs next year, with some saying that as many as half the workers in the country’s export-oriented industries may lose their jobs or be suspended as the global economy crisis drastically reduces export
opportunities.

They said the most vulnerable to layoffs were workers in the textile, furniture, components, electronic assembly and automotive sectors.

“In the first quarter of next year these industries will have already lost many of their export orders, the mainstay of their revenue. And if sellers lose orders, then automatically they will have no revenue and be unable to pay their workers,” said Djimanto, secretary general of the Indonesian Employers Association, or Apindo.

He added that most enterprises had failed to secure fresh orders from overseas for the second quarter of 2009.

“If there’s no response, that means customers may ask sellers to lower their prices or they may cancel their orders. Not only in the first but also in the second quarter,” he said. “Both options are bad.”

Some industry sources have said that in a generally unnoticeable way, many factories were already dismissing workers every month — though not enough to draw attention but still much higher than usual before the crisis.

Djimanto predicted that with no incoming revenue, “Enterprises may have to reduce their number of workers by half” through layoffs or suspensions.

The association, he said, had some 28 million registered workers in formal and informal business enterprises, and as many as to 14 million of them could see their livelihoods go down the drain.

Aviliani, an economic analyst from the Institute for Development of Economics and Finance, agreed that the hardships faced by companies next year may force them to shed half their workforce in order to survive.

“Most of the country’s products are exported to Asian countries, and only 10 percent are exported to the US and countries in the Americas. If countries in Asia are also facing turmoil, then of course Indonesia will be hit by it, too,” Aviliani said.

Businessman Sofyan Wanandi said that although he thought the number of layoffs and suspensions would not be as high as Djimanto’s estimate, it would still be much higher than many have projected.

“The crisis this time is far more serious than in 1998,” Sofyan said, referring to the 1997-98 Asian crisis from which the country has yet to fully recover.

He said that in 1998, only a few countries, including Indonesia, were affected. “This time, it is the heart [of the world economy] that is being hit,” he said, referring to the United States.

He also said that the number of actual job dismissals was already much larger than figures released by the government.

“Currently, there have already been some 100,000 workers laid off from the small-scale sector,” he said.

“Next year, the manufacturing sector will see many more.”

Manpower and Transmigration Minister Erman Suparno said that since October, factories have laid off or suspended some 63,000 workers due to the crisis, and his ministry has been notified of plans to dismiss an additional 23,927, Kompas Online reported.

Aviliani said that layoffs were estimated to peak between January and March.

“Usually, work contracts expire at around that time. And when they expire, they will not be extended,” he said.