Can souvenirs become a major forex earner?

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.