Indonesia bids to protect workers with new stimulus plan

Chief Economics Minister Darmin Nasution announced new rules for determining minimum wage rises, something business has long blamed for denting investor confidence.
Chief Economics Minister Darmin Nasution announced new rules for determining minimum wage rises, something business has long blamed for denting investor confidence.PHOTO: AFP

JAKARTA (AFP) - Indonesia on Thursday (Oct 15) unveiled new measures designed to protect workers from exploitation and provide certainty for business as South-east Asia's biggest economy tries to reverse a sharp slowdown.

It is the fourth time fresh stimulus policies have been revealed in just over a month, as the government seeks to shore up its weak currency and spur the economy, which is growing at its slowest pace in six years.

In the latest instalment, Chief Economics Minister Darmin Nasution announced new rules for determining minimum wage rises, something business has long blamed for denting investor confidence.

As well as sharp variations from year to year, salaries also vary wildly across the country, as wage rises are negotiated from province to province.

Nasution said the new formula would ensure wage rises continue annually but with more predictability for those employing workers.

"The state will ensure labourers don't fall into a cheap wage trap, but businesses will get certainty," he told reporters.

The government will also offer cheap housing and small loans to labourers, including those returning from abroad who may have lost their job and wish to open a business, he added.

The three previous batches of stimulus measures included measures to cut energy prices, slash red tape and attract foreign investment.

There has been some relief recently with the rupiah clawing back some value, after plunging about 20 per cent against the US dollar this year.