APINDO Blames Labor For Limits On Economic Growth

The chairman of the Indonesian Businessmen Association (Apindo), Sofjan Wanandi, blamed labor disputes for turning away foreign investment, a standard talking point from the business community.  Here are his quotes from an article in The Jakarta Post:

“Given this problem, it would be good if we could maintain this year’s growth next year,” he told the The Jakarta Post…The first factor impeding the country’s economic growth and now a major constraint for investments to enter the country, Sofjan said, was legal uncertainty, particularly concerning labor regulations.  “Laborer demonstrations in the country have been getting more extreme recently. The problems appear to be due to uncertainties in regulations on labor such as outsourcing and minimum wages,” he said.  Actually both businessmen and laborers dislike outsourcing, but there is no regulation that ensures the productivity of laborers if they are made permanent employees of companies, he added.  “Once laborers get permanent employment, their productivity sharply declines and we [businessmen] can do nothing about that,” he said.

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