Fri, 02 Apr 2010

The Buddha Bar Restaurant in Jakarta, Dec. 4, 2008. Tariffs can create a near 500 percent increase in the cost of alcohol in Indonesia, and much of that cost is passed on to the consumer. (Beawiharta/Reuters)Enlarge Photo

JAKARKTA, Indonesia - Despite the government’s best efforts to curb the consumption of alcohol, the party here is as rollicking as ever.

Hundreds of bars and clubs, ranging from seedy backwaters hidden down narrow alleyways to spectacular high-end discos anchoring upscale malls and hotels, keep Indonesia’s capital open for business all night long.

Wealthy youngsters pour in and out of dance halls well into the morning hours, often stumbling past destitute street-side market vendors and child beggars - a dichotomy not unfamiliar in a city where the exceedingly rich live side by side with the exceedingly needy.

Some say that Jakarta, along with its tropical partner, Bali, has the best nightlife anywhere in Southeast Asia these days - drawing weekend warriors from neighboring counties and beyond.

It’s an incongruous reputation when placed next to its other moniker: the world’s largest Muslim-majority country. And that dissonance between thrashing techno beats and hallowed prayer calls is also playing out among government regulators.

Ever wary of a large Muslim population that largely views drinking alcohol as a sin, the Indonesian government maintains numerous restrictions on the importation and distribution of alcohol - constraints that have at times throttled the country’s tourist industry and given birth to a deadly black market alcohol trade.

In most corners of Indonesia, home-made concoctions are available at roadside shops for cheap but remain unregulated or even monitored by government agencies. Hundreds of Indonesians, and some foreigners, die every year from drinking the sometimes poisonous brews.

“The government seems to be totally blind to this issue,” said Teguh Yudo, an analyst with the centre for Strategic and International Affairs in Jakarta. “Its whole focus is on regulating the legal importation and production. But there are all these local alcoholic drinks the government is ignoring.”

In February, police arrested five people for peddling methanol-laced alcohol that killed 16 on the island of Java. In May of last year, 23 people were killed in Bali after unknowingly drinking similar illicit alcohol. Several foreigners were among those killed, including at least one American.

The victims were all drinking local palm or rice wine mixtures known as Arak in which the brew’s maker had used methanol. Methanol is deadly in even small doses but is commonly used in home brews here because high tariffs make ethanol - the traditional alcoholic ingredient - so expensive.

On top of a 150 percent levy on imported spirits and wine, there are value-added taxes, an excise tax calculated by the alcohol content and regional government levies, according to the Finance Ministry.

There is currently only one company, state-owned, with government permits to import alcohol and in 1990 the government banned altogether the establishment of any new alcohol-producing enterprises domestically. The trade ministry decided earlier this month to give more permits for companies to import alcohol, but the eight that applied are still waiting approval.