Jobless in Jakarta

With traffic at the Port of Tanjung Priok slowing to a crawl, 31-year-old Hadi doesn’t figure that his life will improve any time soon. Since the start of the year, his trucker’s salary has been cut in half while the cost of fuel and food has soared by nearly 40%.

Tajuddin Umar’s employer has promised to find him another job after the video game parlor where he worked was looted and burned in the riots that erupted here two weeks ago.

Both men feel lucky to have jobs, given the fiscal crisis that has brought one of Asia’s fastest-growing economies to a virtual halt. As Indonesia slips deeper into recession, more men like Hadi and Tajuddin are being forced back down the economic ladder.

“If it gets worse, I’ll go back to my village and try to find work there,” said Hadi, who supports a wife and two children.

There’s a good chance that will happen. By year-end, 15 million more people here could lose their jobs, according to the Jakarta-based Centre for Strategic and International Studies.

With the strong threat of further destabilization, it is one of the most urgent problems inherited by President B.J. Habibie, who took control of the giant archipelago last week after former President Suharto was forced out of office.

Just two weeks ago, Indonesians unhappy with rising fuel and electricity costs turned violent, sparking riots that cost 500 lives and more than $500 million in damages. The primary targets of that urban violence were ethnic Chinese, whose dominance of the Indonesian economy is widely resented by those near the bottom.

“There is going to be a lot of hardship for people at very low levels,” said one Indonesian economist. “And that doesn’t even count the recent riots.”

Although economic reform is the top demand of the International Monetary Fund as it ponders the resumption of its $43-billion aid package to Indonesia, even top IMF officials agree they must strengthen the nation’s social safety net for its most vulnerable citizens.

Indeed, some IMF demands--such as the removal of subsidies on fuel and food--have had the harshest impact on the poor.

Wimar Witoelar, an Indonesian political commentator, said the IMF could help ease social tensions by relaxing its demand that the Indonesian government remove subsidies on fuel and food.

“If you follow the IMF agreement to the letter, you will have a hungry nation with no resilience for political change,” he said.

Indonesia has tough laws protecting employees against unfair dismissal and requiring companies with more than 10 workers to pay termination benefits.

But labor activists claim those laws are rarely followed, particularly in the chaos resulting from last summer’s fiscal crisis. An antiquated bankruptcy law also makes it tough to get companies declared insolvent, increasing the chances that employees will be left in the lurch.

Workers generally try to negotiate with their employers to get some of their termination benefits, according to Teten Masduki, the head of labor relations at the Indonesian Legal Aid Foundation. But he said frustrated workers are turning to the courts. A group of employees laid off by Sempati Airlines recently filed a lawsuit in hopes of collecting their termination benefits.

If the Habibie government fails to address these problems quickly, it risks a repeat of the violence that turned Jakarta into a battleground, according to wary Indonesians.

* SUHARTO RELATIVES OUT: A son and son-in-law of former President Suharto have resigned from the board of a large Indonesian company. A1