Thousands of Indonesia Workers Return to Work After 1-Day Strike

Thousands of Indonesian factory workers joined street protests across the country yesterday to demand higher wages and an end to the outsourcing of labor.

Labor unions estimated as many as three million workers walked off the job nationwide, said Koswara, chairman of the Karya Utama workers federation. About 7,000 people rallied peacefully outside regional parliament offices in Jakarta and Bekasi, and 45,000 more joined protests outside the capital, Rikwanto, a Jakarta police spokesman, said by telephone today.

The one-day strike underlines the challenges for international companies operating in Indonesia, where Freeport- McMoRan Copper & Gold Inc. (FCX) was forced to increase wages for workers at its Grasberg mine in December after a three-month strike crippled production.

Japanese companies have scrapped plans to invest as much as $313 million in the nation’s garment industry because of concern that labor protests may hamper production and spill over into violence, the Jakarta Globe reported today, citing Suryadi Sasmita, executive chairman of the Indonesian Association of Garment and Accessories Suppliers.

Indonesia’s growth potential has spurred companies including Toyota Motor Corp. to boost investments in the country and prompted Standard Chartered Plc to predict the nation will join China and India as the engine of the third global “super- cycle.” The country may surpass Germany and the U.K. by 2030 to be the world’s seventh-largest economy, McKinsey & Co. said in a report last month.

To contact the reporter on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net

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