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On Wednesday (07.12.2022) Indonesia Investments released the November 2022 edition of its monthly report. In this report we zoom in on the most important economic, political, and social developments of Indonesia over the past month.
On Monday (06.12.2021) Indonesia Investments released the November 2021 edition of its monthly report. This report discusses a range of subjects - related to political developments, the economy and social matters - that were important and influential issues in Indonesia in the month of November 2021.
Those who follow Indonesian politics and/or the Indonesian economy should know that November is the month in which new minimum wages are determined for the following year. It involves the minimum wages for the provinces (propinsi), districts (kabupaten), and cities (kota).
On Wednesday (7/11) Indonesia Investments released the October 2018 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of October 2018 and also touches upon key international developments that impacted on the Indonesian economy.
Based on a circular that was issued by Indonesia's Manpower Ministry on 15 October 2018, the Indonesian government plans to raise provincial minimum wages by 8.03 percent in 2019. Provincial governors have up to 1 November 2018 to officially determine the local minimum wage for 2019.
Tuesday 1 May 2018 is a public holiday in Indonesia as workers are given a free day to celebrate International Workers' Day (also known as May Day). This day has been a public holiday in Indonesia since 2014. Traditionally, thousands of Indonesian workers take it to the streets in the nation's bigger cities to voice demands for better income and more supportive policies by the government.
Local governments in Indonesia have been announcing their new minimum wages in recent weeks. According to national law, municipal minimum wages have to be announced before 21 November 2017 (and will come into effect on 1 January 2018). Overall, the Indonesian government set a 8.71 percent increase in minimum wages for 2018. This way it allows the Indonesian workers to adjust to continuously rising living costs.
Ceramic sales in Indonesia are projected to decline to IDR 25 trillion (approx. USD $1.8 billion) in 2015 from total sales worth IDR 36 trillion last year. Elisa Sinaga, Chairman of the Indonesian Ceramic Industry Association (ASAKI), said 2015 is a year full of challenges for the domestic ceramic industry due to Indonesia's slowing economic growth (particularly the slowdown of the nation's property sector), high gas prices, higher minimum wages, and the fragile rupiah (having depreciated around 11 percent against the US dollar so far in 2015).
On Thursday (15/10), Indonesian Chief Economics Minister Darmin Nasution unveiled the fourth economic stimulus package with a main focus on boosting labor and employment in Indonesia. A key policy in the new package is the fixed formula that will be applied by the government to determine increases in labor wages across the 34 provinces of the Archipelago. The government said it will allow a wage increase, every year, based on the provincial inflation rate and economic growth pace.
Mirah Sumirat, Chairman of the Indonesian Association of Trade Unions (Asosiasi Serikat Pekerja, abbreviated ASPEK), stated that the tens of thousands of Indonesian workers who participate in the demonstration, organized in Central Jakarta on Tuesday (01/09), are not seeking anarchy or a coup but simply request that the government will make more efforts to protect the interests of the people (as stipulated by the 1945 Constitution; article 27, paragraph 2).
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It is November, again! This means that Indonesia’s provincial governments need to determine the provincial minimum wages for next year (these new minimum wages will kick in per 1 January 2023).
In felt like a real déjà vu. Shortly before writing this introduction, the World Health Organization (WHO) said it added a new variant of concern to its list of COVID-19 mutations. This new variant, which is called Omicron (B.1.1.529), is believed to stem from South Africa or Botswana, and might be more contagious than the Delta variant that has been dominant over the past 12 months or so.
Through Manpower Minister Circular Letter No. M/11/HK.04/X/2020, the central government of Indonesia requests all provincial governors not to raise the minimum wages for 2021 as the impact of the COVID-19 crisis on entrepreneurs and business has been severe. The financial pressure (due to missed income) makes it tough for many entrepreneurs to survive. By not raising the minimum wages in 2021, these business-owners would get some air, which means jobs can be saved.
Discussing minimum wages is always a sensitive issue. Workers long for rapid growth of their monthly wages as many of them encounter difficulties in making ends meet in their daily lives. In fact, those whose salaries are close to the minimum wage tend to be near-poor and uneducated, particularly in developing nations such as Indonesia, and therefore both their present conditions and their future perspectives are far from bright.
Investment in Indonesia's furniture and handicraft industries is expected to slow in 2016 due to subdued global demand and the lower competitiveness of these industries in Indonesia. Local furniture companies are moving away to Vietnam due to issues related to logistics costs, minimum wages and workers' productivity. For example, Taiwan-based Woodworth Wooden Industries Indonesia, the first Taiwanese furniture company that entered Indonesia (with a USD $40 million investment), decided to exit Indonesia, leaving 200 workers unemployed.
