Indonesia's computer and IT Technology 1998 landscape

Indonesia's computer and IT Technology 1998 landscape

By Zatni Arbi

JAKARTA (JP): Hopes were already very low when we entered
1998, the Year of the Tiger. In January, computer store owners at
Glodok Plaza's Computer City were already unable to print their
price lists, as prices changed several times a day due to the
rupiah's wildly fluctuating exchange rate against the U.S.
dollar. Some of the stores were already out of business by
Christmas of the preceding year. The survivors were unable to
stock new products and they began to quote prices in U.S dollars
because of the volatile rupiah.

In light of the deepening economic crisis, market research
International Data Corp. (IDC), which had previously predicted
the sales of PCs throughout 1998 to reach 550,000, for example,
had early on revised it to less than 400,000. As we near the end
of this year, however, IDC reported that only about 150,000 PCs
have been sold in Indonesia, most of which were locally assembled
systems. Compare that to 1996's figure, which stood at 450,000.

As people's need to use computers continued to increase while
their buying power diminished and the prices of new systems
became out of their reach, used computers and notebooks suddenly
became much in demand. Computers, printers and supplies from
liquidated banks and companies were the main targets. Similarly,
as people frantically tried to save money or could not afford the
more expensive original products, the sales of refilled
consumables, such as printer toner and ink, suddenly had a huge
market. A number of third-party vendors, including Alfa Prima
Anugerah, Data Print and Dwi Indah began offering their ink and
toner cartridge products that could be up to 60 percent cheaper
than the original.

The biggest blow to local computer trade, however, took place
during the devastating May 13 and May 14 riots, as the major
sites for computer-trade activities in Jakarta were looted and
burned by mobs. The incident virtually wiped out the already
tottering businesses of many computer store owners.

The impact was immediately felt throughout Indonesia, as these
computer trade centers -- Computer City in Glodok Plaza, Plaza 21
and Orion Plaza -- had been the main source of computer goods for
traders from other cities and regions in the country. For more
than two months, computer users were helpless, as they did not
know where to go for computer parts or repair services.

Slowly, some of the vendors -- assisted by their principals
rather than by government aid -- got back on their feet. The
first computer stores began to reappear in Golden Truly Complex,
Jl. Fatmawati, followed by those in Gajah Mada Plaza, Mangga Dua
ITC and Mangga Dua Mall. Helped by vendors such as Intel and HP,
the computer traders kicked off by organizing computer shows in
these new locations with a one-month Computer Fair in Gajah Mada
Plaza. Today, more of the newly opened computer stores can be
found on the ground floor of Gajah Mada Plaza, the upper floors
of Mangga Dua Mall and in the shopping arcade of Dusit Mangga Dua
Hotel.

Even today, after these computer trade centers have more or
less established themselves, the products that the stores carry
are still generally limited to the fast-going ones. You may be
out of luck if you want to buy more high-profiled products, such
as high-end graphics cards from Matrox, for example. If you need
a top-end product like that one, you may have to especially order
it from Singapore and you may be required to make a down payment.
The prices, in this case, are normally quoted in dollars and you
may have to wait for two or three weeks to get the goods.

Fortunately, for people who are looking for special offers or
second-hand computer products, the Internet has come to the
rescue. Today, many of our Internet service provider (ISP) sites,
such as www.cbn.net.id and www.pacific.net.id have special pages
where people can make their offers. The site in CBNNet is one of
the best, as the pages are divided according to the type of
merchandise and you can go to the page that contains offers of
electronic and computer products only. When you are in CBNNet's
homepage, click on Only on CBN, and then click on Trade-o-matic
if you want to see what's for sale there.

In a bid to introduce Indonesian entrepreneurs to the Internet
as the new ground for creating new business opportunities or
promoting existing ones, big vendors such as Intel Corp., Cisco
Systems, HP and IBM took turns organizing seminars on the
subjects of E-commerce and E-business during the second half of
1998. E-commerce emphasizes the buying and selling transactions
that happen completely on the Internet, while E-business
encompasses all aspects of doing business on-line -- including
communication with suppliers and distributors.

In general, it is believed that doing Web-based business is
the way to go when the economic crisis seems to have turned off
most other opportunities.

Unfortunately, our national information infrastructure
project, the Nusantara 21 (N-21), which we had looked forward to
as the means to bring Internet closer to the masses, also
received a death blow. "We are not in the position to make any
major investment in this area in the near future," Ginandjar
Kartasasmita, the coordinating minister for economy, finance and
industry informed the press at a seminar on the development of
telecommunications and information in Jakarta in August.

The sting of our economic crisis is also felt by the ISPs
themselves, since they still have to pay for the international
gateway connections in dollars. Early in 1998, only 16 out of 42
licensed providers were in operation. As the year closes, smaller
ISPs are transferring their customers to the major ones before
they close their doors for good. Indonesian Internet users are
estimated to number 100,000, and clearly there will not be enough
business to support these smaller providers.

As the current century moves toward its end, a major computer-
related issue has caught public attention worldwide, i.e., the
inability of older computer systems to deal with the year 00 in
their date field. The awareness and fear of the Year 2000 bug are
also on the rise in Indonesia. Yet, because of a lack of
attention -- there are obviously more pressing political issues
in the agenda of most people currently in the authority today --
the potentially disastrous problem seems to have been put under
the carpet, despite offers from international bodies and other
countries to help.

Two other things also happened as Indonesia continued to
struggle its in restoring stability and order. First, potential
investors canceled their investment plans in Indonesia. The
latest investor that decided to move out was Seagate, which had
actually planned to invest Rp 10 trillion in the Medan Industrial
Park. Their hard-disk manufacturing plant was supposed to become
the largest of its kind in Asia. Seagate has decided to build it
in Subic, the Philippines, instead.

Another significant impact of the prolonged economic turmoil
is that we have suffered from a serious brain-drain problem.

Highly skilled and expensively trained professionals from
Astra International, IPTN and other big corporations in Indonesia
have reportedly left the country for better jobs and safer havens
abroad. The sad side of the story is, it has cost the country a
lot of hard cash to train these people. Edy Prawirohardjo from
Astra International, for example, admitted that it had cost his
company $40,000 to train an SAP specialist, one of those
professionals very much sought after by international head
hunters these days.

As we step into 1999 and get closer to the next millennium, we
cannot help but wonder what other casualties the crisis will
cause to our nation. Still, as the computer traders of the old
Glodok centers have clearly demonstrated, one should never, never
give up. Happy New Year!