Traditional market revamp 'very costly'

Novia D. Rulistia ,  The Jakarta Post ,  Jakarta   |  Wed, 06/18/2008 10:44 AM  |  Business

The country needs in excess of Rp 50 trillion (US$5.35 billion) to increase the competitiveness of more than 13,000 traditional markets amid a rapid growth of modern markets, Asparindo says.

The Association of Traditional Market Managers' (Asparindo) chairman Joko Setyanto said Tuesday the sum was unrealistic as annual expenditures on the revitalization of traditional markets amounted to just 5 percent of the proposed figure.

"The money is not available. Local governments now expect help from the central government, which in turn refuses to take all the responsibility amid this decentralization era," he said on the sidelines of Asparindo's national meeting.

He said the funding was usually generated from regional revenue (PAD) and regional budgets.

City-owned market operators, or PD Pasar Jayas (PDs), have a combined yearly renovation budget, generated from either internal cash or third parties, equal to 20 percent of the suggested amount.

According to the state budget, the government this year has allocated Rp 140 billion for the construction and renovation of 100 traditional markets, up from Rp 100 billion in 2007.

There are approximately 13,000 traditional markets throughout the nation, 70 percent of which are in dire condition. There are currently 15 PDs, spread mostly throughout big cities, including Greater Jakarta, Bandung and Surabaya.

During the meeting, Asparindo signed a memorandum of understanding with state lender Bank Rakyat Indonesia (BRI) to soften the requirements for small entrepreneurs and suppliers to get credit.

Trade Minister Mari Elka Pangestu said the central government was considering providing funds to support the industry's development through a special allocation fund (DAK).

DAKs, along with general allocation funds (DAUs), are allocations from the central government's annual state budget for local governments.

The government is developing other measures in addition to providing financial assistance, Mari said.

"Another way to light up traditional markets is by establishing a corridor connecting one market to another so that they form a network and can complement each other via their own specialities, such as art markets, fish markets or handicraft markets," she said.

The ministry's director for market management, Gunaryo, said the ministry had surveyed market potential and had offered data to the Jakarta government in April.

"We have also mapped similar potencies in Pekalongan and Solo in Central Java," he said.

The government issued a presidential regulation in 2007, which, among other things, restricts the expansion of modern retailers, including supermarkets, hypermarkets and convenience stores, in certain zones.

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