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Jakarta Post

Urban Chat: Bustling businesses on the urban fringe

Many people have talked about Indonesia’s rising middle class, which some mockingly call the consumer class, and about the bustling businesses coming from its strengthened purchasing power

Lynda Ibrahim (The Jakarta Post)
Jakarta
Sat, November 29, 2014

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Urban Chat:  Bustling businesses on the urban fringe

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any people have talked about Indonesia'€™s rising middle class, which some mockingly call the consumer class, and about the bustling businesses coming from its strengthened purchasing power.

Illustrations have invariably included lifestyle choices like mode of transportation, handheld devices, personal care and entertainment. Glorified mall rats.

That the layer of middle class referenced there were mostly the upper crust, few have cared to underline.

As the World Bank is still defining middle class as having US$2 to 20 daily expenses, what about the other layer, the lower middle class?

Back again at the mall, they would be the shop assistants, security guards, dining staff, janitors, receptionists '€” pretty much everyone else beyond the consuming mall rats.

As most don'€™t originally hail from neighborhoods near the glam downtown malls they work in, their choices are left between commuting on Jakarta'€™s infamously inconvenient public transportation, finding a cheap lodging nearby and saving up for a motorbike.

Each of these options has led to bustling businesses in their own merits, right behind the pretty walls of the malls.

If you head to Senayan City through Simprug, you'€™ll pass a slum-like alley, a narrow patch sandwiched between fancy residential complexes for over two decades but which had never got around to being bought up, even after the ring road and swanky mall were built halfway through the period.

When the mall had just opened, the most prominent property on that patch, a 2-story semi-permanent shack, was peddling ugly frames and even uglier landscape paintings downstairs. Yet over time it has gradually turned into a motorbike parking spot for mall staff and less-endowed visitors.

At any given time its ground floor could fit in 40 to 45 motorbikes whose drivers pay about Rp 3,000-5,000 (25-41 US cent) for a few hours or Rp 10,000 for day-long parking, a total steal compared to the mall'€™s official Rp 5,000 per hour rate.

That'€™s revenue up to Rp 500,000 daily, while if rented out the property might not fetch more than
Rp 4 million monthly. After paying utilities and a couple of men running it I figured the owner might
still make about Rp 10 million monthly.

Beats selling ugly paintings any day and twice on Sundays, quite literally.

Across the intersection there'€™s another parking spot stretched entirely out on the muddy sidewalk of a mansion currently in major renovation.

Again, at any given time the spot could fit about 30 motorbikes, though due to its outdoor location, at the mercy of weather, I learned that they'€™d charge a bit less. Neighborhood teens man the spot and revenue goes to communal petty cash.

The rest of the neighborhood has also been getting the windfall, I further discovered.

Mall staff who cannot afford a motorbike can find simple boarding among the rickety shacks, often sharing a small room with others, for no more than Rp 500,000 monthly. Commuters may use ojek (motorbike taxis) to the nearest train station or bus stops offered by the neighborhood'€™s young men who come to the mall'€™s side entrance at closing time.

Food? Plenty. Suddenly the neighborhood ladies found that they had a knack of whipping up standard meals on the ground floor of their modest residence, which are always inundated not just by mall staff but also drivers waiting for their employers roaming the mall.

Roadside stalls are also a fixture that so far no Foke, Jokowi or Ahok as governor has been able to permanently clean up.

All of these aren'€™t unique to Senayan City by any means.

Lurk behind and around any upscale Jakarta mall, even in suburbia like Puri Indah in West Jakarta or Pondok Indah in South Jakarta, and you'€™re bound to find a bustling downscale business made out of possibly half of the workforce that gets a mall running yet can'€™t afford the amenities provided inside.

You may now roar at this grave injustice and demand the mall'€™s food court and parking slash their prices '€” or you can marvel at how it instead creates opportunities just a stone'€™s throw off the mall'€™s tall walls.

On the fringes they may be, creating traffic jams and trash, yet they'€™re genuine businesses. Genuinely profitable, organically coming from demand crossing supply, conveniently serving target markets, ultimately making all stakeholders happy '€” except the tax office they typically allude.

It has all the makings of an informal economy, which you may just miss if you blink while passing it inside your air-conditioned ride.

Life always finds a way; the famous quote from Jurassic Park goes.

I believe commerce is organic. What, you forgot cavemen already bartered off bearskins and grains millenniums ago? You can always try to regulate and tax it, but you can'€™t effectively kill it off as long as a demand is being met. Business will find a way.

Which means if you reread the controversial plan of Jakarta'€™s recently sworn '€” in governor to ban motorbikes along main thoroughfares in exchange for free buses, you may now imagine that the points dotting the barriers will quickly turn into makeshift parking and lots whatnot.

While we let the governor rethink his plan, let'€™s scour the areas for cheap spots to turn into future fringe businesses before the residents discover their entrepreneurial bones.

Wear your flip-flops, darlings, it may get muddy.

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Lynda Ibrahim is a Jakarta-based writer and consultant, with a penchant for purple, pussycats and pop culture.

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