IBRA needs no help from Christie's

By Amir Sidharta

JAKARTA (JP): The audience that filled the salesroom was taken by surprise when eager and aggressive collectors bid up Affandi's Perahu Kusamba from a modest starting price of Rp 44 million to an astronomical Rp 158 million. This was only the first lot at the Indonesian Bank Restructuring Agency's (IBRA) art auction, held at the Menara Citibank building in Pondok Indah, South Jakarta, last weekend.

The third to sixth pieces in the auction, by Dutch-born Indonesian artist Arie Smit, also fetched astronomical prices. The first piece, a charming, bright-colored painting measuring 30x40 centimeters, fetched a surprising Rp 58 million. Meanwhile, the following two pieces fetched Rp 27 and Rp 28 million respectively. The fourth Smit sold for Rp 58 million. All four pieces were sold at five times their starting prices.

Another big surprise was a painting of dancers by veteran artist Bagong Kussudiardjo. It reached Rp 22 million, over eleven times its starting price of Rp 1.75 million. A work by Erica Hestu Wahyuni fetched Rp 27 million.

This auction seemed to fetch higher prices for Indonesian art than Christie's or Sotheby's Singapore auctions the previous week.

In the salesroom, one could have forgotten that Indonesia was undergoing an economic crisis. It seemed just like the good old days when the "big boys" started collecting art beginning in 1994. So, what is going on?

While the organizers of the IBRA auction boasted of low prices for the art pieces in the auction, they did not list estimates or give starting prices. They also held three exhibitions and a bazaar with lottery auctions which once again emphasized low prices. Media reports also stressed the low prices of the works being offered.

Judging from the works which were the most sought after, it is clear that most of the bidders are new collectors who have little experience with art auctions. Lured by the advertised low prices, they flocked to the salesroom.

The rest of the attendees seemed like they were at the horse races. The lower the price of a painting, the more interest the people showed in the work. Once in pursuit, bidders felt an urge to land their piece. The urge was even greater when they were challenged by other bidders.

Auction beginners do not normally set limits for themselves, and even if they do, they tend to ignore these limits when they get caught up in the emotion of the bidding. Among beginner bidders there seems to be a real urge to win pieces at these auctions. How else can one explain a work by Erica going for Rp 27 million when at art galleries her works of the same size go for between Rp 10 and Rp 15 million?

Unlike other art auctions which previously have been held in Indonesia, this auction was free from the presence of government officials, their family members and friends to ensure good sales.

In the past, government officials often would "persuade" conglomerates or businessmen to buy certain pieces. On the other hand, their presence often could dissuade conglomerates and businessmen from pursuing a piece.

At this auction, anyone who paid the auction registration guarantee of Rp 1 million per session was free to bid. And bid they did. Apparently the free market is better than cronyism in getting people to buy at auctions.

Art market observers and Christie's consultant Agus Dermawan T. criticized auction organizers for placing such low starting prices on the works.

"Putting such low starting prices for works by Bagong Kussudiardjo should have been avoided. In this auction it just so happened to have worked out because there were some buyers."

"However, the organizers should have been more cautious about what they might have done to the market for an artists' works had there been no buyers," Dermawan said. One observer saw Dermawan's comments as a reflection of jealousy.

When it comes to art appraisals, Dermawan usually is invited to participate. However, the organizers did not seek his advice for this sale.

Dermawan's comments seem contrary to the policy of auction houses in general.

Deborah Iskandar of Christie's once said that auction houses prefer starting prices to be lower rather than higher so that more people will be interested in bidding for the pieces. Perhaps this is the reason why bidding at Christie's and Sotheby's auctions start at about 60 percent to 70 percent of the estimates for the pieces.

Therefore, it seems clear that the organizers of the IBRA auction set low starting prices as part of their strategy to attract more people to bid. And it worked.

In the end, very few pieces were left unsold. Only one of the 58 pieces on offer the first day did not sell, while on the second day only one item was left unsold in the morning session.

So, the auction easily sold 99 percent of the items they offered. This certainly is better than Christie's or Sotheby's auctions. Even in good times, the two auction houses only sell about 70 percent of the items they offer at an auction. So, taking this into account, Balindo did very well.

While Thailand's Bank Restructuring Agency sought help from Christie's in organizing their art auctions last year, the Indonesian Bank Restructuring Agency were quite confident cooperating with PT Balai Lelang Indonesia (Balindo), a relatively unknown local auction house.

Fortunately, the local auction house was professional in handling the auction. There is no guarantee that Christie's or Sotheby's would have done as well with this auction.

A friend jokingly said the success of the auction showed that some of the bankers seemed to have better judgment in art than loans. Of course, this is not entirely true. However, what is true is that the liquidated banks fortunately had these art works as part of their assets. In an economic crisis like this, art works certainly are more liquid than real estate.