miscintntl JAKARTA, March 4 (Reuters) - Jailed Indonesian labour leader Muchtar Pakpahan said on Wednesday he had told a senior U.S. official that Washington should not give aid to Jakarta until President Suharto implements reforms. Pakpahan told reporters at a hospital where he is being treated that he held a meeting on Tuesday with Stanley Roth, assistant secretary of state for East Asian and Pacific Affairs. ``I told him: Without reforms do not give aid. In this I include political, social, economic...all types of reform,'' Pakpahan said. Roth was in Jakarta along with presidential envoy Walter Mondale, who told Suharto on Tuesday that implementing reforms prescribed by the International Monetary Fund was the only way out of Indonesia's deepening economic crisis. Mondale, a former vice president, did not say if he had raised concerns Washington has about the political situation in Indonesia. But Pakpahan said Roth had told him Washington had demanded that he be released, that his illegal SBSI labour union be recognised and his trial on subversion charges be held speedily. Pakpahan, 43, is serving a four-year sentence for inciting riots but was admitted to hospital last March suffering a number of ailments. He also faces charges of subversion in connection with riots in Jakarta in July 1996 which erupted in the aftermath of the government-sponsored ouster of opposition leader Megawati Sukarnoputri from the leadership of the minority Indonesian Democratic Party. Subversion carries the death penalty in Indonesia. Pakpahan also said he had requested the permission of the government to be allowed to travel overseas for the removal of a tumour in his lung. ``I fear for my safety if I am operated here,'' he said. ``Very important people in Indonesia do not like me.'' He added that if permission was refused he would have to return to his prison cell by the end of the month. The government has so far refused to allow him to leave the country, saying his illness was not fatal. On Wednesday, Pakpahan looked weary but walked unaided from his room to a hospital cafeteria to address reporters. He spoke firmly but appeared to have tired after about half-an-hour. Pakpahan also demanded that minimum wages be raised to cover the sharp increases in prices. Indonesia said on Monday that inflation in February was at its highest in over three decades. He said something needed to speedily done to resolve the economic crisis. ``If there is no help within two months, Indonesia will be bankrupt, it will collapse,'' he said. ^REUTERS@ Copyright 1998 Reuters Limited. All rights reserved. ========================================= Brazilian unemployment soars to 13-year high 07:16 p.m Mar 04, 1998 Eastern By William Schomberg BRASILIA, March 4 (Reuters) - Brazil on Wednesday announced a sharp rise in unemployment, to 7.25 percent in January from 4.84 percent in December, that fueled fears the economy is slipping fast into a slump. The government's National Statistics Institute (IBGE) said January's official unemployment rate was the highest for the month since 1985. The numbers surprised economists who had expected a more gradual increase in unemployment. They said the Brazilian economy now appeared to be paying the full cost of austerity measures introduced during Asia's financial crisis late last year. ``We were expecting unemployment to rise but not at this kind of pace,'' said Mauro Schneider, head of research at investment bank ING Barings in Sao Paulo. He said that while the government might yet turn the economy around, principally by cutting sky-high interest rates, any further job losses might hurt President Fernando Henrique Cardoso's expected reelection bid in October. ``Most of the population still support the government because of its success in keeping inflation low. But if there is a strong increase in unemployment, a mood of insecurity will grow and that would have an impact on the election,'' Schneider said. Brazil's three-year economic recovery stumbled at the end of October when shockwaves from Asia forced the government to double interest rates, raise taxes and cut public spending. Economists said at the time they feared a recession.Automakers, the first in line for the expected slump in sales, slashed thousands of jobs. January's unemployment figures and a smaller-than-expected trade deficit of $214 million in February, announced Monday, suggested that the downturn was now in full effect, financial analysts said. ``These are factors which indicate that the economy really is in recession,'' said Joao Marcos Marinho Nunes, a partner in MCM Consultores. ``Perhaps the slowdown will be deeper than had been previously thought.'' Sao Paulo, Brazil's industrial heartland and key to Cardoso's reelection hopes, was worst hit by January's job losses. Unemployment in the city reached 8.51 percent, the highest rate since the IBGE began its surveys in 1982. The IBGE figures differ from those of the trade union-funded Labor Union Statistics Institute, which estimates unemployment in Sao Paulo at about 17 percent. Schneider of ING Barings said the IBGE's figures might add pressure on the Central Bank to reduce interest rates at its monthly rate-setting meeting later Wednesday. The Brazilian benchmark interest rate, the TBC, stands at a towering 34.5 percent, lower than 43 percent at the height of Asia's crisis last year but still enough to throttle growth. ``You can be sure that the unemployment figures will be in the headlines tomorrow. The Central Bank has serious criteria for interest rate policy but they might also be wanting to come up with some good news to share the front pages,'' Schneider said. ^REUTERS@ Copyright 1998 Reuters Limited. All rights reserved. ==================================== March 4, 1998 Strikes by German City Workers Frame Political Battle to Come By ALAN COWELL BONN, Germany -- As Germany's political titans squared off for national elections later this year, Wilfried Klumski and about 130,000 other municipal workers gave them a hint Tuesday of what the winner's prize -- or burden -- will be. Klumski, 45, is a bus driver in Bonn with 20 years' experience. Tuesday at 4 a.m., he and his colleagues went on strike for five hours to reinforce union demands in wage talks under way in Stuttgart, as did tens of thousands of German public service workers elsewhere. All told, Klumski said, 160 buses and 80 streetcars stayed in his depot in the Friesdorf district. In Berlin, union officials like Klumski reckoned, a million commuters got snarled in traffic or were late for work. In Nuremberg, garbage collectors surrounded city hall with their trucks. Elsewhere, for brief but disruptive periods, streetcars stopped, clerks refused to type, schools did not open and airline flights were canceled or delayed. The timing of the strikes -- which started on Monday, the day Germany's opposition Social Democrats nominated Gerhard Schroder to run against Chancellor Helmut Kohl in September -- was a coincidence. But the question, however unintentional, was equally clear for both contenders. Both Kohl and Schroder talk of reform of the economic system that provides people like Klumski with an array of benefits that are the envy of many in Europe. And so, as Germany faces pressure to cut back on its welfare state, how much will people like Klumski accept when the bosses start talking about less sick pay and more costly retirement pensions? "We know that things can't be like in the past, what with globalization and the pressure from Europe," Klumski said. "But we don't want things to go too far." Sensing growing pressure on his union, which represents public service and city transit workers, Klumski saw a broader point, too. "Things that start in the United States get here 10 or 15 years later," he said. "And we saw what happened in Britain under Margaret Thatcher when the unions were smashed. Now they want to achieve that here." Indeed there is a broader point. Germany, Europe's ponderous economic powerhouse, is facing the rigors of global competition just as pressure increases to cut public spending in the name of the planned single currency in Europe. Employers and others maintain that unless the high cost of hiring people is cut, Germany will not be flexible enough to meet those challenges and still reduce its record unemployment level of 12 per cent of the workforce, or 4.8 million people. What that comes down to for people like Klumski is marks and pfennigs and security. In current negotiations with his union, the government side is pressing for a reduction in sick pay to 80 percent of salary, from 100 percent, and the phasing out of a program that provides 3.2 million municipal workers with free pensions. The union, by contrast, wants a package of pay hikes and job security measures that it estimates would increase overall labor costs by 4.5 percent. The union is also pressing for the 40-hour workweek of its members in eastern Germany to be shortened to match the 38.5 hours of the west, reductions in working hours and overtime, and the introduction of part-time work for retirees. What is really at issue, though, is the costly system of all-embracing social guarantees that post-war Germans have long taken for granted. Take, for instance, a bus driver with 16 years' service, Klumski said: Gross pay before stoppages, 4,067 marks ($2,260) a month (plus a 13th month's salary paid as a bonus); six weeks' paid vacation, and 10 days as paid public holidays. But the real value of the bus-driver's job lies in sums withholded that are matched 100 percent by the employer. That combined amount finances the health care, schooling, social security, sick pay, old-age care and unemployment benefits at the core of what modern Germans call the "social market economy." The sense that history's tide may be running against all that makes people like Klumski uneasy. "They have been trying to cut our benefits for 20 years," he said. "It was easier in the past to hold on to them. Now the pressure is more difficult to resist." Copyright 1998 The New York Times Company ======================================== Kenyan general strike called by unions 4 March 1998 Web posted at: 20:06 SAT, Johannesburg time (18:06 GMT) NAIROBI, Kenya (Reuters) - Kenyan union leaders Wednesday called a general strike in sympathy with thousands of bank staff fired after protesting tax rises, officials at the main trade union grouping said. "A general strike is the decision reached by the labor movement in this country," said Central Organization of Trade Unions (COTU) assistant secretary-general George Odiko. He said COTU had called a workers' rally in Nairobi Thursday to seek public endorsement for the action and announce a strike date. The bank workers action has paralyzed banking countrywide. The general strike call was the first major challenge to veteran President Daniel arap Moi since he won a final five-year term as president of the East African nation of 28 million people in December. The new strike is seen likely to undermine economic growth, already hit by heavy rains linked to the El Nino weather phenomenon. Last week, the International Monetary Fund said Kenya faced a grim year, with gross domestic product (GDP) growth declining, budget deficit rising, inflation climbing and the currency easing. Moi, aged 73 and in power since August 1978, has made no comments on either the IMF statement or the COTU call. Odiko said secretaries-general of all major workers' groups affiliated to COTU had agreed to call the strike, and their decision had been endorsed by some 5,000 workers camping outside COTU offices and loudly calling for a nationwide protest. Some 12,000 bank workers in 42 banks across the country, representing at least 400 bank branches, went on strike Friday to protest an increase in the tax on soft loans and said they would not return to work until it was scrapped. Their employers reacted by dismissing them. COTU's hand appeared strengthened by employees of state utility Kenya Posts & Telecommunications Corporation (KPTC) and the pension agency National Social Security Fund (NSSF), who said they were joining the strike in sympathy with bank staff. f. Copyright 1998 Reuters Limited. All rights reserved.