Jakarta, 1st October, 2000

The National Front for Indonesian Worker’ Struggle (FNPBI)

Front Nasional Perjuangan Buruh Indonesia Jl. Tebet Timur III K No.2 - Jakarta Selatan Telp.8296234 - email : fnpbi@iname.com

Together with members of the Forum of Unionists' Solidarity (FSU), the National Front for Indonesian Worker's Struggle (FNPBI) will hold a day action to respond the government policy on subsidy cut. Thousands of workers in Jakarta will street to respond this policy. The two issues to raise are:

1. To refuse the new price of fuel and;
2. to increase the wage by 100%.

As we may know, the Indonesian workers are suffering from the hard situation, receiving only law wage and paying the expensive living cost, due to the deep crisis which hit Indonesia since 1997. However, the crisis itself does not only occur in Indonesia but everywhere in other part of the world. The policy itself does cause the problem to all of us. Therefore, we need to be united. Develop your support for our struggle and together we fight against any kind of exploitation and oppresion directed to the life of workers.

Below is our statement to clear our position toward this issue:

STATEMENT ON

THE REFUSAL of HIKING FUEL PRICE

INCREASING WAGES by 100%

Although, the government had not yet confirmed the deadline, but there is already one absolute thing. No more bargain on the subsidy cut on fuel, which so far has been asking for 42 trillions of rupiah of the national budget. Even the members of Indonesian parliament have agreed on this matter. They argued that the government can save about 800 billions of rupiah, and this amount will be allocated in many ways. Among these are to survive the poor, to encourage the small producers and the creation of jobs in slum areas. The funds therefore will be distributed through the ministry of "Koperasi" and small producers unit, the ministry of community and areas, and the ministry of internal affairs.

On this plan (to allocate the funds), the government would think that it is wise enough increase the fuel price. Moreover, it always argues that only the have and the middle class, since they are the biggest consumers, who benefit from the subsidy. Therefore, the subsidy abolishment is a very just decision, if the view comes from the proportion given to the middle class.

Nobody can argue that we need the amount of money to recover from the deep crisis. The economic depression is not only taking place in Indonesia, but also in other Asia and Africa countries, although there is a significant level of difference. The necessity of the fund then pushes the government to rely on the foreign debt, which is sponsored by IMF, World Bank and The Asia Development Bank. As happening in other third world countries, IMF always introduced the austerity program, which has been believed to be the magic solution for Indonesian economy crisis. The Structural Adjustment Program (SAP) is an economy program introduced by IMF which contents are all the instructions and steps to be taken by the debtor countries. Besides the privatization (of all state enterprises), the market and trade liberalization, the removal of fuel subsidy is also part of this program.

The latter is not only implied in Indonesia but also in other Asia, Africa and Latin America countries which have been suffering from cronic foreign debt. The debt given to these countries is given purposely to pay the interest only to the commercial banks in the western countries. The result then all these banks are benefiting from the debt transferred from the third world countries. This becomes the motivation of government’ plans to cancel the fuel subsidy. However, the total foreign debt, which has been one third of the total national budget, is still limiting our ability to recover from the crisis.

The fuel is a vital resource of economy activities of the society. The daily Kompas (on the 31 of August’ 2,000 issue) reported that the biggest fuel consumption comes from the transportation section, which is 17,82 millions of liter, during the 2,000 national budget. To follow is the industrial section which is 5,536 millions of liter. The rest is going to the domestic usage and the commercial needs.

This condition is a logic tool to create the buying panic among the society. The fact shows that there has been the price increasing as the negative consequent although it remains the plan only. The informer of the electronic private media, SCTV, reported an increasing price of basic needs such as eggs, milk and oil.

Meanwhile, the transportation has increased the ticket and fee per first of September. Although the government has guaranteed that there wouldn’t be any increasing following the hiking fuel price, still the government failed to put control on the transportation service. In addition, the industrial section uses 22% of the total need. This increasing usage will automatically add the cost production, which cause another burden to the consumer due to the increasing price of commodity.

In relation to the wages (Jakarta receives around Rp. 344,500/month, equivalent to US $ 40,5), the fuel hiking will weight the people economically and impact other social problems. It means there is no right argues to say subsidy on fuel only advantage the have.

In accordance to government’ prediction, the subsidy would reach the amount of 60 trillions of rupiah from 43,95 trillions of rupiah if the subsidy were to remove. The rest can be re-allocated to install the foreign debt and the recapitalisation of private banks which have reached hundreds trillions of rupiah.

In response to this situation, the National Front for Indonesian Worker’ Struggle (FNPBI) together with other members of the Forum of Unionists’ Solidarity (FSU) demand:

1. The Refusal of Hiking Fuel Price
2. Increasing Wage by 100%

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