Sun, 14 Oct 2001

From 'Ali Baba' to 'kawin kontrak'

Gin Kurniawan, The Jakarta Post, Jepara

The economic boom is over. Local furnituremakers, known worldwide for first-class craftsmanship and superb teakwood, are now facing their painful days in agony. Anxiety over the future shadows every day of their lives.

In the golden days, Jepara -- a coastal town in Central Java -- witnessed numerous success stories of the local furniture manufacturers, who grew from very small-scale home industries to export-oriented companies. While other businesses were dying during the 1997-1999 crisis, many furnituremakers here enjoyed the rupiah's depreciation.

But that was two years ago. The end looms near for many Jeparan entrepreneurs running a business. Overseas orders have been drastically reduced from an average of 1,000 and 1,200 containers per month to between 300 and 400 containers. Last year, the figure was between 600 and 800 containers.

With an assumption that each container holds US$20,000 worth of goods, the export value of Jeparan furniture per month totaled about $20 million at that time. That figure has now plunged to some $600,000!

Take a walk around town and one can easily see the closure of a number of furniture showrooms and workshops.

To publicly express their misery and fear, some businessmen have placed banners in front of their establishments, which have temporarily closed.

"Iki Kepiye? Kok sepi order. Ayo dipikir bareng-bareng" (What's up? Ordering has been quiet. Let's think about it) reads a banner at the gate of the PT Kalingga showroom on Jl. Tahunan.

Another sign reads: "If riots happened all the time, the furniture business would collapse."

Some businessmen have said that their savings had seriously shrunk. The Jeparan furniture industry, once a major contributor to both the local and state budget, is on the brink of collapse.

The Sept. 11 terrorist attacks on the icons of America, a country that was a major exporter of Jeparan products, will further worsen the overall situation.

So far, entrepreneurs have no clear idea about what the real problems were that led to the drastic reduction in foreign shipments. They said they could only guess.

Some pointed a finger to the strict eco-labeling requirements for their products shipped to the States and European countries. Others simply blame it on the global recession.

Arifin Mubarok, the chairman of the Jepara Furnituremakers Association, said some 200 containers of Jeparan furniture initially shipped to Germany were sent back as exporters failed to show the required eco-labeling certificate for their products.

Arifin said that the treatment was unfair to producers.

"It should have been Perhutani (the state-owned timber company) that showed the certificate, not us who purchased the material from Perhutani," he said.

Perhutani, the main supplier for local manufacturers, has been certified by the eco-labeling system, Arifin explained.

Besides the eco-labeling issue, Jeparans also see the "invasion" of foreign parties as the perpetrators who sparked the current slowdown.

Jeparans have said the foreigners -- including Americans and Europeans -- not only visited Jepara to make orders based on their designs, but also purchased several local manufacturing companies by hiring local men as their "executives", who locals call "Ali Babas".

By hiring the Ali Babas, who are well-dressed in a suit and tie but have no right to make any decisions, the foreigners could escape from, among other things, taxes and other business and immigration red tape, said some manufacturers.

"Foreigners have commandeered a 75 percent share of the industry here, while the remaining 25 percent is dominated by locals," said Arifin, the director of a leading export-oriented furniture firm.

He and his colleagues in the business said they were not concerned about the presence of foreign players ahead of the implementation of a free-trade area in Asia soon. But they disrespected the business ethics used to avoid being present probably due to the reasons given above, he said.

Akhmad Fauzi, the chairman of Jepara's Forum for Economic Development, Employment and Promotion (FEDEP), said some 200 furniture manufacturing firms were believed to be owned by foreigners.

"They are invisible. In reality they own the companies, but administratively their names are not on the company ownership papers," Akhmad said.

"The foreigners," he explained, "have advanced technology, management and marketing skills which make it easy for them to immediately occupy 75 percent of the industry."

That is why, like the Ali Babas, many local craftsmen now work for foreigners, Akhmad said.

About 60,000 Jeparans depend on this line of business for their livelihood. The latest data reveals that the town has some 2,300 furniture firms, but most of them have gone bankrupt or are dying.

Another ploy used by foreign businessmen to smoothly run their furniture business in Jepara is to marry local women.

Unlike official wedlock, this type of marriage -- known locally as kawin kontrak (wedding contract) -- needs no legal certificate and the union can be ended at any time, based on the contract between the couple. Under the kawin kontrak scheme, the foreigner puts the name of his wife as the owner of the company with him still in full command.

The trend has initiated some Jeparans to offer services to foreigners looking for wives.

A restaurant at Kartini beach, famous among foreigners, has been a popular hangout for some Jeparan women, who are ready to be engaged in kawin kontrak.

"That's why many people here dubbed our restaurant as the mak comblang (middleman) restaurant," said Rio, a senior staff member at the restaurant.

Following growing anti-U.S. rallies over the past few days, many foreigners here have left Jepara for other safe towns nearby, such as Solo, Semarang and Klaten.

"I'm pretty sure that they will be back soon after the situation returns to normal," said Santi, who married an Italian and is the director of C.V. Arti Santi, a furniture firm.

Jeparans strongly hope the current grim episode will end soon. Otherwise, the Jeparan furniture business will become history.