Analysis: Indonesia sets world record in Consumer Confidence
Or so I think, I have no way of being absolutely certain. But having scoured the web, I know of no other index in any other country that has ever touched 145, let alone cross the mark. The KADIN-Roy Morgan Consumer Confidence index is at 146.8, an all-time high. In just a single month, September saw a jump of 4 points. The index is now 14.5 points higher than it was a year ago. We are not alone. The Bank Indonesia index also hit its highest level ever, up by the same 4 points in the month of September.
There was more confidence in almost all components of the survey. In terms of the economy, now 84 percent, up 5 percent, expect Indonesia will have ‘good times’ financially during the next 12 months. This is also a new record high. In contrast, 16 percent, down 5 percent, say that we’ll have ‘bad times’ financially. This is the lowest level for this indicator since the April–June quarter of 2005. A record majority of 91 percent, up 3 percent, expect Indonesia will have ‘good times’ economically over the next five years compared to only 8 percent, down 4 percent, who expect ‘bad times’ economically. Again, this is the lowest level seen since the April–June 2005 quarter.
In terms of personal finances another all-time high of 56 percent, up 2 percent, expect their family to be ‘better off’ financially this time next year. Polarized as a tiny fraction, only 3 percent, down 3 percent, now expect to be ‘worse off’ financially. This is yet another new record low.
The good news doesn’t stop there. A robust 36 percent, unchanged, say their family is ‘better off’ financially than a year ago compared to just 12 percent, down 2 percent, who say their family is ‘worse off’ than a year ago. A majority of 51 percent, down 2 percent, still say ‘now is a good time to buy’ major household items compared to 45 percent, up 2 percent, who say ‘now is a bad time to buy’ big-ticket items. This is the only indicator that has shown a dip in September, small as it is.
No wonder, the Indonesian Chambers of Commerce and Industry (Kadin) chairman Bambang Suryo Sulisto said, “September was another record breaking month for our consumer confidence index. It is probably higher than any other such measurement in the world. The Indonesian consumer is ignoring the negative signals so visible in both the global economy as well as local politics. Their ever-growing self-confidence is shrugging off the fears emanating from a sluggish Europe and a stagnating America. Indonesians are telling the local government that they do not really care what goes on in the corridors of power, they are carrying on with their daily business with more enthusiasm than ever before. From a Kadin perspective, we are depending on Bank Indonesia to keep a firm hand on all their levers. And on OPEC to keep oil prices reined in. If these two organisations maintain the delicate balance of internal and external factors, Indonesia will remain a strong contender among BRICIS with an investment climate second to none.”
“Remarkable Indonesia”, as the Investment Coordinating Board (BKPM) would say. Or “Wonderful Indonesia”, as the tourism board proclaims. You can take your pick of either slogan, they are both appropriate to the national mood today. But the question everybody is inclined to ask is for how long will these good times roll. Bank Indonesia and OPEC are two big factors for ongoing stability. But each of us also has a role to play, in keeping the mood buoyant. Anybody who is listening to the pundits and the talking heads opine will know that most are clueless.
Everyday, you can see stock exchanges seesaw around the world, more often in different directions than in unison. That’s just because of knee-jerk reactions by interested parties to different stimuli in different parts of the world, with the rest following like sheep. As usual in times like these, the chatter more than ground realities will hang over our heads as dark clouds. Indonesia and Asia are where the action is, for the whole world today.
We need to remain vigilant, and deny the doomsayers the predictions they are prone to make. The best way to do that is to pay due respect to the Indonesian consumer. If we just do more of what we are doing, buoyed by their confidence, we will serve each other well. The one thing to remember is those in the millions who may get left behind. We can only hope that Indonesia’s growing numbers of millionaires will reinvest some of their fortunes right back in the country of their good fortune. They need to acknowledge the “Occupy Wall Street” phenomenon that is sweeping across the world, not just the US.
The oppressed in the West are beginning to say they have had enough of the inequality, disgusted by the ugly nexus between big business and politics. For too long, the poor of the East have lived in hope and little else. More jobs and better wages are the cornerstones of a continuing success story, creating new consumers for the world to give and take from, in equal measure. Old ideologies, old social structures, old ways of doing business are being challenged now, more than ever before. The dictators who ignored the first light of the Arab Spring are paying for their bravado with more than their empty chairs. In Indonesia, remarkable and wonderful, we have nothing to fear but ourselves.
The monthly KADIN-Roy Morgan Indonesian Consumer Confidence Rating is based on 2,020 face-to-face interviews conducted throughout Indonesia, not just a handful of cities. The survey includes the Top 21 cities, smaller cities and towns as well as many more villages in the rural hinterland, reflecting all of Indonesia. Men and women aged 14 and over were randomly selected during the month of September 2011.
The writer can be contacted at [email protected]
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