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Jakarta Post

Exports slow, but service sector remains promising

Greater Jakarta could start to suffer the impact from the global financial turmoil by the first semester next year, with manufacturers likely to downsize, an official at the Indonesian Chamber of Commerce and Industry (Kadin) said Tuesday

Tifa Asrianti and Olivia Dameria (The Jakarta Post)
Jakarta
Wed, November 19, 2008

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Exports slow, but service  sector remains promising

Greater Jakarta could start to suffer the impact from the global financial turmoil by the first semester next year, with manufacturers likely to downsize, an official at the Indonesian Chamber of Commerce and Industry (Kadin) said Tuesday.

“The crisis has affected the export sector since November,” said Sofian Pane, chairman of Kadin’s Jakarta office, on the sidelines of a meeting to elect the chamber’s new chairperson.

“Many exports were rejected. More companies might be forced to stop production, leading to layoffs.”

He said three shoe factories in Bekasi had closed down recently.

Sofian suggested Indonesia seek non-traditional export markets, with the Middle East as a viable alternative. However, the service sector, Jakarta’s main revenue generator, has yet to feel the pinch of the global downturn, although players are bracing in the face of a bleak outlook.

“The crisis has not yet affected shopping malls significantly,” said Sutoto Soerjadi, secretary-general of the Indonesian Shopping Center Association (APPBI).

“Our occupancy rates for this year still stand at between 83 and 92 percent.”

He said malls had recorded a slight drop in visitor numbers since the global downturn, but he did not name an exact number.

For 2009, Sutoto went on, mall occupancy rates would depend on energy costs, purchasing capacity, and the rupiah’s depreciation.

“We cannot maintain mall occupancy rates if the electricity rate keeps increasing,” he said.

He warned malls could see a further downturn in visitor numbers if the crisis continued into next year and the rupiah kept depreciating, thus dragging purchasing power down.

To counter the downturn, Sutoto said the APPBI was promoting energy efficiency programs for malls.

Karla Parengkuan, executive director of the Indonesian Hotel and Restaurant Association (PHRI), said hotels had yet to show a drastic drop in occupancy rates, with Jakarta hotels averaging 60 percent occupancy.

“We cannot predict what will happen, but I assume we will recover from the crisis faster than in 1998,” Karla said.

She added that to cushion the blow next year, PHRI members would slash costs and improve service quality.

“Besides renovating hotels, we will also pay more attention to service and human resources by conducting training for best results,” she said.

Mara Oloan Siregar, assistant to the city secretary for economic affairs, said the administration would try to mitigate the crisis by strictly monitoring illegal imports and boosting interprovincial trade.

“We will empower small and medium enterprises and ease credit disbursements for them,” he said.

“We will also establish micro-financial institutions in 267 subdistricts.”

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