A victory for the family's main earner, achieved without fanfare

Debnath Guharoy ,  Consultant   |  Tue, 03/18/2008 1:15 AM  |  Business

When the government announces GDP growth rates of 6 percent or more, there is cause for one in three Indonesians, at best, to feel good. It has little meaning for the rest.

To the overwhelming majority, a spike in the price of rice or soybeans creates an even greater stress on the family's meager budget.

For more than two years, the main wage earner in most homes was not able to cover the household's monthly expenses single-handedly. In a culture where most women are housewives and the man of the house is the breadwinner, this has been a source of shame for most men.

Income and expenditure were not in synch for quite a while, even though the amount in question may have been small for Indonesia's privileged few. The break-even point for the average family budget today is Rp 1 million.

Earn it, spend it and there is no more pain over and above the usual struggle. That's a little over a hundred U.S. dollars a month to spend on the normal monthly bills, groceries and the like. It does not take into account the cost of building a home, or repaying the loan for a motorcycle.

Without knowing it, the average Indonesian main earner scored a major victory for the nation collectively, when the break-even point for the family budget was positively breached for the first time in more than two years.

While the struggle continues, anybody interested in the welfare of the average family has reason to celebrate. This achievement will take many pundits, including activists, journalists, bureaucrats and consumer market watchers, by surprise.

The traditional bonus of a month's wages at Lebaran would have contributed. Many sympathetic employers may have done what they have always done in moments of economic stress, paying a little extra to ease the pain at the pasar.

But those explanations are inadequate.

Rational analysis of the facts will lead to the only possible conclusion. The average main earner is earning the extra Rp 100,000 each month simply by working harder. Many have taken on additional work, doing two jobs or more.

The effort is worthy of both respect and sympathy. Tough as it is, life in Indonesia, as in many developing countries, has the innate ability of going back to normal. The proof of the national mood is reflected in the Roy Morgan Consumer Confidence index climbing another two points for the October-December quarter, taking it well into positive territory at 115.

These conclusions are based on Roy Morgan Single Source, the country's largest syndicated survey with more than 27,000 Indonesian respondents annually, projected to reflect almost 90 percent of the population over the age of 14, or 140 million people.

The results are updated every 90 days.

The opinions expressed here are my own.

To expect this state of relative calm to continue unabated would be wishful thinking. In a world buffeted by spiraling oil prices, with a global credit crunch affecting further growth, the ebb and flow of Indonesia's fortunes are as much in question as any other country. Food prices continue to rise without any signs of a plateau.

Having failed to win any energy security from the adventure in Iraq, an embattled U.S. administration is encouraging the diversion of corn to ethanol. It is barely a secret their entire corn production can only meet 7 percent of their annual fuel needs, with no real reduction in fossil fuels used to produce and convert the corn.

In the meantime, the resulting shortage of corn is affecting the price of food, not just animal feed, and not just in the U.S.

In contrast, Al Gore's Alliance for Climate Protection contends that U.S. requirement for energy could be met by covering a portion of the Mojave Desert with solar panels. This view is being met with scorn.

Does anybody remember Copernicus, Galileo or Da Vinci or any of the other visionaries ridiculed and condemned in their time?

In a borderless world, there can be no stability for anyone if major economies shake at their firmament, fueled with self-inflicted folly. There can be no social justice anywhere if a mortgage holder is refused help but Bear Stearns is bailed out by the taxpayer.

At our own doorsteps, the corrupt roam free.

If greed goes unpunished so blatantly, if the blame and the burden can so easily be shifted to the common man, who is paying the price of GDP growth?

For as long as the privileged few fail to act, not just flinch at the sights of misery we witness every day, there will be no real progress and we will thoughtlessly chant the tired old mantras of yesterday.

The writer can be contacted at Debnath.Guharoy*roymorgan.com

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