Who needs new malls?<\/p>\n
M. Taufiqurrahman, The Jakarta Post, Jakarta<\/p>\n
Shopping malls are booming. Developers vie to build new malls on
\noptimism that consumption, which has become the main driver of
\nthe economy over the past several years, will remain strong. But,
\nhow many malls do Jakartans really need? This week's cover story
\nhighlights the issue.<\/p>\n
Aside from its perennial traffic congestion, Jakarta now -- or
\nat least since its recovery from the economic crisis of the late
\n1990s -- has a new feature; the aggressive construction of new
\nshopping malls.<\/p>\n
As if the existing malls were not enough to appease Jakartans'
\nhunger for frittering away their money, in almost every corner of
\nthe crowded metropolitan area one can find heavy machinery
\nworking around the clock to build what is going to be the steel-
\nand-class construction called a mall.<\/p>\n
Along with the construction frenzy, developers are looking for
\nnew ways to hype their products by creating brands such as World
\nTrade Center (WTC), International Trade Center (ITC), Plaza,
\nPiazza, Shopping Junction and other names that come to mind, when
\nin fact there is nothing to indicate that one is all that
\ndifferent from the other.<\/p>\n
If one mall succeeds in finding new ways of luring leisure-
\nseeking Jakartans, other developers soon make a carbon copy of
\nthe concept in other locations.<\/p>\n
Drive around the city and many parts of greater Jakarta and
\nyou can easily spot dozens of malls currently under construction
\n-- including some in the most improbable of locations, such as
\nCibubur and Bumi Serpong Damai -- that took their template from
\nthe first \"town square\" mall in Cilandak, South Jakarta.<\/p>\n
While there has not yet been a comprehensive study about
\nexactly how many malls are actually needed for the twelve-million
\nodd Jakartans, developers always base their ventures on the
\nassumption that the capital is still in need of shopping space.<\/p>\n
The construction of new malls was at full-throttle in the wake
\nof the economic crisis that hit the country in the late 1990s.<\/p>\n
The intensified construction of malls is now capitalizing on
\nthe consumption-driven economy, in which lenders believe that
\ninjecting their money into the financing of new malls would
\nquickly generate profits, rather than engaging in more risky
\nproduction-side activities such as the construction of new
\nfactories.<\/p>\n
The construction frenzy also relies on the rise in consumption
\nby the public. Statistics produced by Bank Indonesia (BI) show
\nthat retail sales increased by 18 percent in July this year from
\nthe same period last year.<\/p>\n
Statistics also show that the construction of new malls in the
\ncapital and its surrounding regions has reached an alarming pace.<\/p>\n
The supply of shopping space over the past five years in
\nJakarta and its surrounding regions in fact surpassed the
\ncombined figure of shopping space constructed between 1975 and
\n2000.<\/p>\n
Between 1975 and 2000, the total amount of shopping space
\nconstructed was 3.2 million square meters with a market value of
\nRp 46 trillion (US$4.5 billion). The figure doubled only in a
\nfive-year period between 2001 and 2005 and is projected to reach
\n5.2 million square meters with a market value of Rp 90 trillion.<\/p>\n
From a business point of view, a property expert warned in
\nlate 2004 that although the supply of shopping space was still at
\na healthy level, an oversupply would materialize in 2005 or 2006.<\/p>\n
Meanwhile, an urban planner balked at developers' arguments
\nthat the ultimate objective for the construction of new malls was
\nto turn Jakarta into a city of commerce or service just like
\nSingapore.<\/p>\n
Architect Yayat Supriatna of Trisakti University said that the
\nargument was baseless that served as a subterfuge for their rent-
\nseeking motives.<\/p>\n
\"The fact is that it is only traders from countries in Africa
\nwho are willing to shop here. And they don't go to those plush
\nshopping malls, but to the less glamorous Tanah Abang market,\" he
\ntold The Jakarta Post.<\/p>\n
He also said that the argument that Jakarta was still in need
\nof new malls was implausible as according to a healthy ratio
\nbetween the population and the available shopping spaces, the
\nmetropolitan area would only need one or two new malls.<\/p>\n
\"My estimation is that Pondok Indah Mall in South Jakarta at
\nsix hectares can accommodate 1.5 million people. The figure is
\nequal to the 20 percent of middle to upper class residents who
\nare targeted by such a mall,\" he said.<\/p>\n
Most plush shopping malls in Jakarta sell foreign branded
\nitems or are franchises of foreign companies whose price tags are
\nbeyond the reach of ordinary Jakartans.<\/p>\n
Yayat also warned that the unchecked construction of new malls
\nhas taken its toll and is degrading the quality of Jakarta as a
\nlivable metropolitan city.<\/p>\n
He said that apart from encroaching on the city's green areas,
\nthe construction of new malls would also sap future fuel
\nreserves.<\/p>\n
\"Shopping malls need a huge quantity of energy to keep their
\nair conditioning machines running, which in turn will also
\nproduce more gasses that contribute to the greenhouse effect,\" he
\nsaid.<\/p>",
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