Can souvenirs become a major forex earner?

By Robert Sinuhaji

JAKARTA (JP): In a bid to focus the development of the tourist industry, the Ministry of Tourism, Post and Telecommunications set minimum and maximum targets for the growth in the number of tourist arrivals during the Sixth Five-Year Development Program (Pelita VI from 1989-1994). These rates were 11 percent and 13 percent respectively. And average tourist expenses were projected at US$1.37 per person per day.

The ministry also projected a maximum figure of 3.95 million foreign tourist arrivals for the year 1994 and foreign exchange earnings from the tourist industry of $5.4 billion. A minimum target of 3.88 million tourist arrivals along with foreign exchange earnings of $5.3 billion was projected for the same year.

In 1995, the maximum goal for arrivals was 4.6 million people spending $6.3 billion. The minimum target was 4.3 million foreign tourists spending $5.9 billion.

Data released by the ministry says 4 million tourists visited Indonesia in 1994, a 17.72 percent increase compared with the previous year. The figure has proved that tourism development programs have, above all expectations, exceeded their targets.

Results did not match projected foreign exchange earnings however. These were only $4.7 billion. Even though this was a 20.03 percent increase on the previous year, it was still not close to the target.

And what about the figures for 1995? In that year, 4,318,057 foreign tourist arrivals were recorded, a 7.78 percent increase on the number the year before. This figure surpassed the projected minimum target.

The 1995 foreign exchange earnings, similar to those of 1994, did not meet the projected target. Foreign exchange earnings from tourism in 1995 were only $5.2 billion. Though this was an increase of 9.35 percent it still fell short of the ministry's expectations.

It cannot be denied, that reaching the projected tourist arrivals target is a spectacular achievement. Equally high hopes however were pinned on reaping huge sums of foreign exchange besides attracting vast numbers of tourists. In 1994-1995 not only was the foreign exchange maximum target not achieved, results were also below the minimum earnings objective.

Souvenirs

One of the tourism products expected to bolster the country's foreign exchange earnings is the souvenir sector. Tourist destinations throughout the country, have their own particular specialities. Bali, for instance, is known for its paintings and woodcarvings. Yogyakarta is renown for handmade batik, and Irian Jaya for the Asmat tribe's handicrafts.

But, according to Prof. Dorodjatun Kuntjoro-Jakti, of the University of Indonesia's School of Economics, the country's souvenir industry could be expanded further. In his opinion, Thailand has developed a noticeable edge over Indonesia in its souvenir industry.

Tourism honey pots are concentrated in Bali and Central Java. Hence, the widest variety of souvenirs is found in those regions.

Viewed from the standpoint of international requirements, only Bali has succeeded in meeting tourists' demands for an acceptable standard of products. Yogyakarta souvenirs are often considered to fall short of ideal standards.

The question is, can souvenirs be developed into a major foreign exchange earner?

In the tourist sector, souvenirs are the second largest foreign exchange earner after hotel accommodation. Data from the Ministry of Tourism, Post and Telecommunication reveals that over a period of five years (1990 to 1994), tourists' expenditure on souvenirs increased steady.

In 1991, foreign exchange earnings from souvenirs totaled $442.36 million, an increase of 4.90 percent on the previous year. In 1992 it climbed by 19.02 percent. And a huge jump of more than 100 percent was recorded in 1993. The figure for that year was $1.05 billion, or 26.40 percent of the total amount generated by the tourist industry. It should be noted that this figure nearly topped total foreign exchange earnings from accommodation.

In 1994 the growth in sales of tourism products was a scant 10 percent, well below its 1993 figure.

From the above information it can be observed that foreign exchange growth in the tourist industry is still precariously unstable. It is high time that more attention was focussed on the subject.

There are several fundamental problems. Funding is a case in point. Souvenir making is what economists call a cottage or home industry. Producers are usually not solvent enough to expand their business regularly, either through the procurement of new equipment or the recruitment of additional personnel.

An example is the ulos and uis gara cloth weaving industries in Sumatra's northern highlands (Tapanuli and Karo), a region teeming with popular tourist locations. These industries would probably blossom if given sufficient funds and personnel.

It is hoped that credit funding, when made available by banks (less collateral or securities), would provide individual cottage industries with more leeway for expansion. And funding could also be extended by large business concerns. Owners of such companies could be made "foster fathers", by becoming suppliers to these cottage industries.

Many Japanese businessmen have launched successful ventures with cottage industries. Such cooperation has made the Japanese industrial sector the economic giant it is today.

A second problem is the quality of standards.

Prof. Ronald Clapham, from Siegen University in Germany, has commented that poor skills in Indonesian cottage industries are still very evident, resulting in many souvenirs being of inferior quality. An example is the low quality batik on sale in Yogyakarta. Much of it fades quickly and tears easily.

Sellers, however, proclaim that their merchandise is of the highest quality. Buyers, on the other hand, are mostly ignorant of how to assess the quality of any product they plan to buy. Low quality products leave a bad impression of the country on visiting tourists.

But how do we discern good quality souvenirs?

A souvenir could be described as being of good quality if it meets several common standards, including its initial attractiveness, how typical it is of the region, its artistic design and its durability. A batik piece made of choice material and bearing a distinctively local design would be a good example.

It might be of help if the Ministry of Tourism, Post and Telecommunications, or any related institution, introduced a scheme to brand better quality souvenirs, to be a quality guarantee to help erase doubts from tourists' minds about an object's durability.

The third, and equally important, factor concerns guidance. Guidance is necessary to instill a high sense of responsibility in souvenir makers, and so prevent them from continuing to sell low quality keepsakes. Furthermore basic information should be made available to souvenir makers to stimulate them into designing new creations. The range of souvenirs would then finally be released from the monotony that often plagues it. There would hopefully be more creations and designs.

I am of the opinion that Singapore has made enormous achievements in this respect. An example is their lion symbol, which has inspired numerous souvenir makers in the island state. The symbol can be found in many accessories, ranging from key chains to pins and ashtrays.

With an appropriate application of effort, encompassing all aspects of the souvenir industry simultaneously, we should ultimately be able to raise foreign exchange earnings from tourism.