Business

Indonesia sees nationwide strike on salary hikes

  • 31 October 2013
  • From the section Business
Protesters attempt to dismantle barbed wire barricades during a protest demanding higher wages on 31 October 2013 in Surabaya
Image caption The unions are angry over what they say is poor pay for workers and are demanding an end to the government's attempts to cap wages

Workers across Indonesia have begun a two-day strike demanding higher salaries, the latest industrial action to hit the South East Asian economy.

The workers say their cost of living has gone up amid rising inflation and a hike in fuel prices.

According to unions' estimates, almost three million workers will take part in the industrial action.

However, the actual numbers have come in lower than their forecasts in previous nationwide strikes.

"All factories in Java's industrial hubs have stopped," Said Iqbal, chairman of the Confederation of Indonesian Workers Union, was quoted as saying by the AFP news agency.

"Many workers who could not afford their rents have had to move out of their homes and live under bridges and in sewers. They are eating instant noodles instead of rice," he added.

Fuel prices in Indonesia have jumped after the government cut a huge fuel subsidy earlier this year. The move was implemented after months of political haggling and continues to remain unpopular.

Higher fuel prices have also led to a rise in consumer prices, which have grown at an annual rate of more than 8% in each of the past three months.

Growing strikes

Indonesia has been one of the fastest growing economies in the region.

Image caption Union leaders said that two million took part in the strike action across the Indonesian archipelago
Image caption Correspondents say that Indonesian factory workers are among the lowest-paid in Asia, often earning less than their counterparts in China or India
Image caption The unions are calling for big pay rises as the cost of living spirals because of rising inflation, which in turn has been driven up by unpopular fuel price rises
Image caption Security was tight with more than 17,000 police mobilised in the cites of Surabaya and Jakarta
Image caption Correspondents say that the number of strikes in Indonesia has risen as workers demand more proceeds from the country's booming economy
Image caption Male and female workers in factories producing everything from clothes to electronics stopped work

The success of its manufacturing and mining sectors, powered by a low-cost labour force, has been a key driving force behind its expansion.

However, as its economy has grown so have the strike actions by Indonesian unions who have been demanding higher wages and a greater share of the country's prosperity.

The actions have seen minimum wages rise in the country.

Workers in Jakarta this year received a 44% jump in minimum salaries to 2.2 million rupiah ($200; £123) per month, and there have been hikes in other parts of the country as well.

However, there are growing concerns that as workers demand even higher wages, profits at manufacturing facilities in the country may be hurt.

The worry among some is that a decline in profits, coupled with increasing strikes and a recent slowdown in Indonesia's economy, may see foreign investors stay away and further hurt the country's growth.

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