Floods a 'national disaster' for business

The Jakarta Post, Jakarta

Following the disruption of economic and commercial activities in the capital and its surrounding areas over the past several days following the floods, businessmen warned on Monday of considerable losses arising from the disaster.

Steve Sondakh, secretary-general of the Indonesian Chamber of Commerce and Industry (Kadin) said that the massive floods had prompted businessmen to postpone trade transactions and negotiations.

Talks on investment were also halted as foreign investors had second thoughts about coming to Jakarta, Steve said.

In addition, he said, companies could not operate fully as their plants were inundated by the floodwaters. Their woes were compounded by the fact that many workers had failed to turn up for work.

"In the macroeconomic sense, this is a national disaster. And the losses will be immense should the floods continue," Steve, who also a director of the Hero supermarket chain, remarked.

Social and economic activities in the capital over the past few days have been virtually paralyzed due to the massive floods, which are considered by many as the worst in Jakarta's history.

While the peak of the flooding occurred last Friday, the Meteorology and Geophysics Agency (BMG) said that rain would continue to fall until the middle of this month.

This has raised fears that the worst of the disaster may yet be to come.

Siswono Yudhohusodo, chairman of the Indonesian Farmers Association, said that the country's rice output could fall by five percent this year due to the floods that had inundated key rice producing areas, such as the north coast of Java island, Bali and Nanggroe Aceh Darussalam.

"I have just received a report that 17,000 hectares of rice fields in Karawang, West Java, have been washed away. We predict that the area of rice fields affected by the floods will actually be greater than this," Siswono said during a hearing with the House of Representatives' Commission III for agriculture and food affairs.

He warned that the government's unhusked rice output target of 53 million tons this year would not be met due to the floods, citing that prior to the flooding farmers had been reluctant to plant rice due to high fertilizer prices and low prices for their crops.

Separately, Djimanto, the secretary-general of the Association of Indonesian Footwear Manufacturers, said that around 10 percent of shoe factories, or nine out of 90 shoes factories in the country, had halted their operations due to the floods.

The shoes factories affected were located in flood-hit areas of the Greater Jakarta region, such as Bekasi and Tangerang.

In addition, around 40 percent of manufactures had slowed down their activities as their employees had failed to show up due to the flooding. The delivery of raw materials had also been obstructed.

"I have yet to receive any reports on the material losses to date. So, I cannot give exact figures," Djimanto said.

If the floods continued until the end of this month, some shoe manufacturers might have to move their production to Singapore to ensure supplies to their buyers, he added.

Lili Asdjudiredja, director of the Indonesian Textile Association (API) said the demand for textile products had dropped drastically following the floods as people preferred to spend their money on food supplies.

Like many other industries, the floods had hampered the distribution of raw materials and damaged material stocked in the factories.

"With this flooding, foreign buyers are reluctant to come to Indonesia. This will further hurt our competitiveness, which is already considered low," he remarked.

Elsewhere, Thomas Darmawan, chairman of the Indonesian Food and Beverage Association, said that food and beverage distribution in the capital had thus far remained normal despite transportation problems.

"We have been anticipating high demand for the Chinese New Year and the early days of the month. We had already dropped supplies to supermarkets and markets before the floods hit," he explained.