Old Policies of Repression Linger

The government of Indonesia may have changed recently, but the old policies of repression and top-down decision-making remain in place. That’s the message of labor activist Muchtar Pakpahan as he goes around Washington this week. Pakpahan places little faith in new President B.J. Habibie and his Cabinet, and he’s urging federal officials not to direct assistance solely through them.

Despite the promise of Habibie, Suharto’s handpicked successor, to distance himself from the intimidation tactics of the past, Pakpahan tells of the Indonesian military’s threat last month to “cripple” his labor movement. Pakpahan, after being jailed for union activities for more than four years, was thwarted in an attempt to call workers to a meeting in Jakarta.

What’s more, Habibie issued a decree last week that limits protests and gatherings to only 50 people, and those must be nowhere near the parliament, the president’s palace or military offices. Pakpahan says that under these rules it will be all but impossible to organize a political meeting or protest. And, while Pakpahan chooses his words carefully when talking about the military, it clearly troubles him that troops fired rubber bullets into an angry crowd of protesting shoe workers several weeks ago.

Many common people lost respect for the military over the past decade because Suharto misused the troops. Soldiers were routinely called on to evict farmers from land at the behest of private developers, military units were assigned to strike-breaking duty and constant pressure was exerted by the armed forces on democracy activists, environmentalists and legal assistance teams. Any Indonesian who presented any sort of threat to the rapacious Suharto clan could count on being at odds with the military. As a result, the military today is required to use more force to quell disturbances and employs harsher rhetoric to intimidate perceived troublemakers.

There is striking evidence that Suharto’s overreliance on thuggish military operations was due to the demands of the foreign investment community and even from the World Bank. While at the bank in 1993, Lawrence Summers, currently deputy Treasury secretary, commissioned a study published as a set of political prescriptions that, among other things, encouraged government officials to “insulate” themselves from pluralist pressures and to suppress trade unions. “The East Asian Miracle” became a blueprint for developing nations eager to emulate the remarkable economic growth rates of the Asian “tigers.” The book sketches how the suppression of worker rights in countries like Singapore and Korea was a key component of their success and embraces what it calls the “labor trade-off.” One of the advantages derived from the suppression of labor unions, the authors explain, is the freeing of government bureaucracies to implement the economic austerity measures and wrenching structural adjustments that open the doors to private investment.

How much of the blame should we ascribe to foreign investors? When Korea and Taiwan started to democratize in the late 1980s and independent trade unions began to get organized, companies like Nike and Reebok pointed their contractors in the direction of Indonesia, which had been in the grip of the Suharto regime since 1967. These contractors, who were from Taiwan and Korea, had become accustomed to the merciless suppression of worker upheavals by troops back home; they brought their “system” with them.

The stakes were incredibly high, since other countries were also desperate to attract the shoe companies. Indonesia grabbed a huge share, increasing shoe exports from $40 million a year to $2 billion a year in only five years. But while U.S.-based shoe companies may have been making Indonesia’s trade and investment numbers look great, the young, overwhelmingly female work force continued to struggle for basic rights and livable wages.

The ground is shifting in Indonesia, albeit slowly and painfully. At the same time that the army is violently crushing labor protests, the government has agreed to sign Convention 87 of the International Labor Organization, guaranteeing the right to freedom of association. American companies, however, are still trying to conduct business as usual; U.S.-based corporations are making it clear that they are not ready to tip the scales in the direction of reform.

Both Reebok and Nike, for example, are members of the San Francisco-based group Business for Social Responsibility, and both had representatives at a meeting in Jakarta just before Suharto was booted from office. In all, 12 major U.S.-based garment and footwear producers met in Jakarta under the aegis of the group. But the company representatives refused to meet with an Indonesian trade union delegation to discuss the desperate conditions of more than 2 million young Indonesians making clothes and shoes. These minimum-wage workers have experienced a 50% decline in real earnings over the past 10 months, receiving 55 cents a day, less than a quarter of what they were paid before the Indonesian rupiah crashed.

It’s time to level the playing field so workers have a fighting chance to better conditions. This could lead to a truly sustainable stability model built on mutual respect instead of relying on soldiers and intimidation.