There's no such thing as a free lunch...Or is there?

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It's official. The next president of Indonesia is former army general Prabowo Subianto. Quite how the next five years will pan out is anyone's guess but hopefully the foreign pundits who always bring up his dodgy human rights record will be proven wrong. Nonetheless, on policy making, Prabowo's popularist move to literally offer the poor 'a free lunch' every day of the week does not augur well for the future. Such a policy - if it ever came to fruition - would cost a phenomenal amount of money and likely lead to huge inefficiencies (food waste) and poor incentives (make people lazy). Another concern is Prabowo's strong nationalist bent. Thus, in the possible event that he finds himself with his back against the proverbial wall in the face of stern economic challenges, there is a big chance that he will simply scapegoat foreigners. But he will have to be careful. Construction of the new capital city, Nusantara, for example, is highly dependent on foreign in
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Labor Day in Jakarta

Indonesia doesn’t celebrate Labor Day. But I guess that’s not surprising really. Cos lurking there somewhere, in the darkest recesses of the Indonesian mind, is the fear of that most awful of political ideologies: communism. And those godless monsters are a dangerous bunch indeed. Especially in a country where it would take a worker earning the monthly minimum wage an incredible 86 years to buy the cheapest Mercedes model even if they saved their entire income over that time! 

Slave wages 
In fact, the minimum monthly wage is set at such a low level in Indonesia it is not even enough to allow workers to meet their basic minimum needs. And foreign companies, which have built factories in industrial estates on the outskirts of the city, are more than happy to take advantage of the situation, citing low productivity as the main obstacle to higher wages. 

 But is this a fair argument? Of course productivity is low - after all, what is the incentive to work harder, if you can barely afford to eat and clothe yourself? And some companies like U.S. footwear producer Nike are really taking the mick. Because rather than actually produce the footwear itself in its own factories, Nike instead subcontracts all its production to local companies. 

As such, Nike is able to absolve itself of any responsibilities since the employment conditions at the factories are then determined by these local companies and not Nike. Crafty huh? So the next time you buy those US$70 Nike sneakers, spare a thought for that Indonesian worker who’s probably getting paid less than US$5/day. Cos would you wanna be in his shoes?

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