Scrimping, saving in the recession<\/p>\n
The writing is on the wall. The economy is slowing down,
\nprices are going up and people are being laid off. Hard economic
\ntimes lie ahead as analysts warn of a deep recession. The Jakarta
\nPost reporters Achmad Junaidi, Ati Nurbaiti, Arief Suhardiman,
\nBenget Simbolon, Emmy Fitri, Kornelius Purba and Riyadi talked to
\na cross-section of society to find out how they are coping with
\nthat not-so-secure feeling. Related stories are on Page 9.<\/p>\n
JAKARTA (JP): In times of crisis, some people still find
\nopportunities in others' misfortune.<\/p>\n
Intan recounted a staff meeting at the East Jakarta employment
\nservice bureau where she works.<\/p>\n
"These times are a challenge for us," the boss said.<\/p>\n
"Unemployment will increase, and many people who are laid off
\nwill come to us."<\/p>\n
He noted that as job vacancies were declining, "we need to be
\nmore aggressive and send more proposals to other companies".<\/p>\n
For many of us, it is hard keeping a cool head amid mounting
\nworries.<\/p>\n
In Cilandak, South Jakarta, Sita is afraid of losing her job
\nin a prestigious company.<\/p>\n
As a member of the firm's environmental impact analysis team,
\nshe fears she and her colleagues could go "anytime".<\/p>\n
"Projects are being shelved or delayed, so who wants an
\nenvironmental analysis?"<\/p>\n
Five months pregnant, she has been hemorrhaging and confined
\nto her house, worried sick over her job, and about paying her
\nhouse mortgage.<\/p>\n
Others are cutting back. A housewife says she has scaled down
\nher shopping, from three shopping carts to just one, in her
\nmonthly supermarket trips because prices have gone up in recent
\nmonths.<\/p>\n
Indonesia has not felt the pinch as severely as Thailand,
\nwhere the economic downturn in the region began, and where the
\nwoes have taken their toll in suicides.<\/p>\n
Between July 15, when the monetary crisis began, and Oct. 1,
\nno fewer than 13 suicides attributed to financial woes were
\nreported in that nation.<\/p>\n
Indonesia may be better off for now, but that is hardly
\ngrounds for complacency. There is no doubt the recession will
\neventually hit here just as hard.<\/p>\n
While it will be toughest on the poor, it may be no less
\ndamaging to Indonesia's burgeoning middle class, who have grown
\naccustomed to the good life in the last decade.<\/p>\n
"We're really feeling the crunch," an architect's wife says.
\n"Luckily, I've got my mother-in-law, who I can turn to when I
\nneed to borrow money."<\/p>\n
Rather than wallow in stress and self-pity, she says the
\nfamily escapes by going to the movies.<\/p>\n
Shops in Jakarta's sprawling malls are virtually deserted,
\ndespite alluring discounts, she notes. "But cinemas are full --
\nwith people like us, I bet."<\/p>\n
Companies are closing down and laying off their workers.
\nOthers have begun tightening their belts, cutting down on
\nexpenses and delaying payments to suppliers and contractors
\nwhenever possible.<\/p>\n
The situation harks back to earlier recessions, including
\nsevere downturns in the early 1980s and beginning of this decade.<\/p>\n
Gary Nagari Munthe, director of Business Chronicle
\npublication, recalls that in the 1970s "poor people, particularly
\nthose paid a daily wage, suffered the most.<\/p>\n
"'It's very hard to earn money now', was a sentence that I
\nheard very often on the streets or other places I visited in
\nthose days...People who were previously generous to me became
\nthrifty during the recession," Gary recalled of his days as a cub
\nreporter on The Indonesia Times.<\/p>\n
Although there were not many layoffs, "I noticed people found
\nit hard to get new jobs".<\/p>\n
Big government projects were also postponed and canceled, as
\nhas happened this year, but Gary thinks the current recession
\nwill be harder.<\/p>\n
Companies have more offshore debts, making them vulnerable to
\nthe plunge in the rupiah's value.<\/p>\n
Many analysts blame the credit crunch imposed by the monetary
\nauthority, and ensuing soaring interest rates, for being the kiss
\nof death for firms battered in an already reeling economy.<\/p>\n
Masyhud Ali, president of Bank Putera, terms the policy
\n"fatal" in driving companies into bankruptcy and banks into
\ninsolvency.<\/p>\n
"That was a grave mistake...We're paying very dearly for it."<\/p>\n
In this vicious cycle of misfortune, when heavily indebted
\ncompanies fold, they bring banks down with them, in turn leading
\nto more bankruptcies.<\/p>\n
Senior economist and former finance minister Frans Seda
\nrecommends prudence, especially in cash flow management, as the
\nbest course of action for the current situation.<\/p>\n
Efficiency can be achieved through effective use of all
\navailable resources and not necessarily through layoffs, Frans
\nsays.<\/p>\n
"Businesses should focus on products that can be absorbed by
\nthe market. We have no choice during these lean times.<\/p>\n
"We should also be careful because we don't know when this
\nwill end. We hope it will be sooner than expected."<\/p>\n
A positive and determined attitude is important.<\/p>\n
"At least, they (hard times) make us realize that the economy
\nis subject to booms and recessions," Frans says.<\/p>\n
There is no doubt the biggest fear in these bleak times is
\nreceiving the pink slip of redundancy.<\/p>\n
Minister of Manpower Abdul Latief, a successful businessman
\nwho built the ALatief Corporation in malls and property before he
\njoined the cabinet in 1993, has appealed to employers not to
\ndismiss their workers.<\/p>\n
"As I have often stated in the case of 16 banks recently
\nclosed by the government, employees should not be victimized
\nbecause this is not their fault. I also ask workers to remain
\ncalm...<\/p>\n
"You have my word that my ministry will do its best to protect
\nworkers' interests..."<\/p>\n
His ministry said last week it had received applications from
\n50 companies to lay off around 10,000 workers due to the economic
\ndownturn. The number could swell if the situation worsens.<\/p>\n
The government is banking on small and middle-sized companies
\nto absorb as many workers as possible.<\/p>\n
Latief said he had received President Soeharto's approval to
\nrequest that PT Jamsostek, the state-company which manages
\nworkers' social security funds, inject Rp 2 trillion into state-
\nowned banks for loans to the firms.<\/p>\n
"We must encourage these companies to continue developing,
\nespecially during the hard times," he says. (team)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/scrimping-saving-in-the-recession-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}