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!