The Indonesian Retailers Association (Aprindo) has hailed a presidential decree on the retail sector as a breakthrough in the perceived disharmony between traditional and modern retail markets
Aprindo chairman Handaka Santosa said Tuesday the decree covered the interests of both sides, allowing them to compete side by side without hurting each other.
"The purpose of the decree is to create conducive trading conditions, in which modern markets can keep growing while traditional markets can improve their trading zones and physical conditions so they won't lose their customers in the retail sector competition," he told a media conference.
Traditional market operators, he said, could learn from modern market developers in how to conduct business through, among other things, venue mixing.
"Many developers of modern retail markets combine the retail trade with shopping centers, apartments or hotels. Traditional markets should also take this as an example, combining traditional markets with, maybe, high-rises," Handaka said.
According to the new decree, local administrations are authorized to arrange the trading zones of modern and traditional markets.
The decree demands traditional markets to comprise clean, hygienic and safe public places.
On modern markets, the decree separates them into five categories, with total foreign ownership allowed for minimarkets, department stores and supermarkets with more than 400 square meters of trading area, and more than 5,000 square meters for hypermarkets and trading centers.
Handaka said that in addition to improvements in traditional markets' physical appearance, another way for them to survive the retail market competition was by cooperating and establishing businesses together.
Though satisfied with the decree, Handaka expects faster issuance of the accompanying ministerial regulations necessary for the decree's implementation.
In contrast to Aprindo, the Indonesian Cooperatives Council (Dekopin) asked the government on Monday to review the types of retail businesses open to foreign investment, fearing a negative impact for small businesses.
"This regulation seems to legitimize modern retailers to operate on an equal footing with traditional markets, while in fact the two are incomparable in terms of capital," Dekopin chairman Adi Sasono said.
Adi said that in Jakarta, modern retailers had been growing by about 31 percent each year, while traditional and local retailers had been decreasing by about 8 percent every year.
"The government should have a clear social orientation in opening the domestic market. The government should be brave enough to limit the involvement of foreign investors in public sectors," Dekopin executive director Bambang Suharto said.
Dekopin groups 134,000 cooperatives with about 30 million members in the country's 33 provinces. The cooperatives operate in various sectors, including saving and lending, distribution, farming, transportation and manpower.(ndr)