(IPS) feature The local officials of Indonesia's premier province may have wanted to win workers' support by imposing a higher minimum monthly wage, but businessmen say the Jakarta administration is not really doing the labourers any favour with the new policy.

They say that instead of forcing businesses to raise salaries, bureaucrats should stop asking for ''meal money'' under the table when approached for document processing, or imposing all sorts of fees whose purposes are vague.

''They know (what goes on),'' says local businessman Budi Otto. ''They know it (dubious charges) adds a great deal to our production costs and reduces (what we give to workers).''

Even Arief Minardi, chair of the Labour Forum of the state-owned Indonesian Aerospace Company (PTDI), blames continuing corruption and other irregularities committed by ''greedy executives'' for the dismal performance of his company and the low morale of the company's workers.

Otto says that government officials seem to think that labour cost is low and that employers ''have big margins''. But, he says, labour expenses on average now make up more than 30 percent of production costs.

More expensive

Most of the Indonesia's labour-intensive companies are export-oriented. As businessmen see it, higher wages would only make their products more expensive and therefore less competitive overseas.

Some businessmen like Otto blame the decentralisation of administration for the imposition of policies that they say are detrimental to the already flagging economy.

Otto complains, ''They charge us various forms of levies, increase expenses the companies should pay and impose by themselves the rate of wage.''

Other businessmen say that if the Jakarta provincial government insists on raising the minimum salary to 591,266 rupiah (US$59) a month, many companies would probably have to retrench or close shop altogether, leaving even more workers without jobs.

But workers' groups say government policy should not be profit or business-oriented and recognise the economic needs of people trying to cope with hard times at a time of rising prices and removal of subsidies on items they no longer have today.

Indeed, the debates over wages in the country show the difficulty of balancing the often conflicting needs of businessmen and workers when the economy remains in crisis.

''It's impossible for us to pay salaries of our workers 38 percent higher,'' says local businessman Haryadi Sukamdi. ''Unless we put a halt to our businesses.''

Adds Association of Indonesian Toy Businessmen chairperson Widjonarko Tjokroadisumarto: ''Indonesia is the only country in this planet that increases workers' wage four times of its inflation rate. This policy is suicide.''

Galopping inflation rate

In fact, officials had cited Indonesia's galloping inflation rate of 12.55 percent as one of the reasons why they decided to raise the minimum wage.

The previous provincial minimum wage in the Jakarta area, which includes the Indonesian capital, was 426,000 rupiah (US$42) a month. The new rate came into effect on Jan 1.

Businessmen, however, have obviously not been falling over themselves trying to comply with the new rates. Says Djimanto, spokesman of the Association of the Indonesian Businessmen (Jakarta branch): ''They decided it without proper studies and survey. We have decided to reject it.''

On Dec 13, the Jakarta State Administration Court apparently agreed with the association, and ruled against the Jakarta provincial government. The association had filed the case, alleging that the provincial government's new wage policy would have businesses collapsing.

''As good citizens we will abide by the rule and so we will not pay the newly-imposed minimum wage,'' said Djimanto.

But should the government try to force the wage policy, he warns, some 294 companies are set to lay off 30 percent of their workers, which means another 210,000 people will be unemployed in Jakarta alone. ''And if it does not enough, we will stop our production,'' Djimanto says.

Bad precedent

Around 40 million people are already unemployed in Indonesia, a country of more than 200 million people, according to Manpower Ministry. In West Java alone, some 5,000 textile companies are poised to reduce the number of their workers due to lower exports and high production costs.

But the National Front for the Indonesia Labour Struggle (FNBI) says the Jakarta State Administration Court's Dec 13 decision sets a bad precedent for workers. Says FNBI chairperson Dita Indah Sari: ''In the future, businessmen would just go to court when there's anything that harm their business interests.''

She adds that if companies continue to ignore the new wage policy, labour will stage a huge demonstration and strike nationwide.

Many businessmen are daring the FNBI to do just that, saying more companies closing would mean even harder times.

Businessmen also say that workers are already getting the wages they deserve. In the Greater Jakarta area that covers Jakarta, Bekasi, Tangerang and Bogor, a new worker can have a gross monthly income of around one million rupiah (US$100), or almost double the new minimum salary.

PTDI employee Suprayogi himself says that although he has already set aside plans to renovate his house, he would be willing to make do with his present salary if only he would start hearing good news for a change.

He says, ''If we don't hear about huge scales of corruption, illegal levies and the government is able to control prices of daily necessities, things would be much better.''