Middle class deals with crisis fallout

Middle class deals with crisis fallout

The boom days of economic development this decade supported a
growing middle class boasting fat paychecks and ample disposable
income. Conspicuous consumption was their byword for living
before the sobering realities of the economic crisis hit home.
But have they really changed their habits? The Jakarta Post team
of reporters -- Reiner Simanjuntak, Christiani S. Tumelap,
Aloysius Unditu, Ivy Susanti, P.J. Leo, Imannudin and T. Sima
Gunawan -- talks to those in the know.

JAKARTA (JP): Life is like a roller coaster ride, we are told.
It has its ups and downs. Sometimes we are happy and fortunate,
while other times we experience sadness and bad luck. And now,
with the country in economic turmoil, most of us are apparently
distressed.

To survive the monetary crisis, many have had to take bold
cost-cutting measures, including smaller budgets for daily
expenses such as food, drink and entertainment.

Utomo, a 40-year-old entrepreneur, has sold one of his cars
and slashed other expenses, including limiting the use of his
cellular phone.

Silvy, a young executive who earns Rp 2 million a month, is
considering selling her cellular phone.

Owning a cellular phone, or hand phone as it is popularly
called here, has become a status symbol among yuppies. Last year,
the number of cellular phone users grew 100 percent. But many of
them apparently were not prepared to face the bill since using a
cellular phone is more expensive than talking on an ordinary one.

In February, unpaid customer bills throughout the country
totaled Rp 200 billion (US$26.66 million).

Silvy admitted that she had yet to pay last month's bill,
which totaled Rp 300,000.

"I still have other things to pay, including my Rp 550,000
monthly installment on my second-hand Kijang van."

She said she would not have any problems parting with the
cellular phone since she was from a modest Central Javanese
family. "I might even sell my car as well if they increase the
installment. That's fine, I used to take public transportation."

Ferry Humanto, an executive at Bank Bira, does not have to
sell his car or cellular phone. A hard worker, he used to play
hard, too. But not anymore.

"I don't go out as often as I used to since prices of most
things, including food, have increased drastically," he grumbled.

Prices have skyrocketed following the 70 percent plunge of the
rupiah's value against the U.S. dollar since last July. In the
first quarter of 1998, the inflation rate soared to 25.13
percent, with month-on-month inflation rising 5.49 percent in
March, according to the Central Bureau of Statistics.

Posh outlets

The price of a meal at a fast-food restaurant, consisting of a
hamburger and a coke, has increased 100 percent and now costs as
much as Rp 8,000.

Aqua bottled water, which costs Rp 1,000 per bottle at the
supermarket, is sold for Rp 18,000 in posh food outlets. In one
cafe on Jl. M. Thamrin, the price of a sandwich -- one of the
cheapest items -- has increased from Rp 15,000 to Rp 35,000. A
portion of sukiyaki at a Japanese restaurant in a five-star hotel
was Rp 50,000 before the crisis. Now, it is Rp 120,000.

It's no wonder that local yuppies now have to think twice
before eating out at lavish restaurants or drinking at bars and
cafes.

Interior designer Kirwan Harsono, owner of PT Kirassko Toma
Mandiri, said he used to dine out almost every night.

"Now I prefer to eat at home. I ask my wife to cook," the 35-
year-old father of two said. "Well, in a way, this crisis brings
me closer to my family."

He also has to carefully consider shopping prices. "I like
Hugo and Armani, and I still wear them instead of local brands.
Since prices are soaring, I'll have to shop less often."

Hugo Boss brand's local manager, F.X. Khrisna Moran, said he
used to sell one or two suits a day, with each costing Rp 5
million to Rp 10 million. "Now it's probably only one a month."

Williarty Aliwarga of Prada said that local yuppies now came
to her store just to window shop.

Shopping malls, department stores and supermarkets are still
crowded. It's no secret that shopping has become a lifestyle for
yuppies, as well as many other people. But whether they buy
things or just look, that is another story.

Business is terribly slow. Kirwan, whose major clients are
hotels and apartments, has laid off half of his office staff. He
has also had to let go of 125 of the 200 workers in his workshop.

The government has said that as of the end of February, the
number of workers dismissed by companies troubled by the monetary
crisis totaled more than 1.5 million.

Unemployment will decline only after the crisis recedes. But
that will take some time. The Asian Development Bank has
predicted that Indonesia's economy, the most serious casualty of
Asia's financial crisis, would not recover until 2001.

The government, aware of the debacle, predicts a minus 4
percent growth during the 1998/1999 fiscal year -- a drastic drop
from the average of between 6 percent and 7 percent annual growth
over the past decade.

People are suffering from the severe impacts of the crisis.
Crime and suicide rates are on the rise. In Surabaya, an engineer
who was caught stealing a gold necklace said he did it because he
lost his job. More than 45 people in Jakarta have taken their own
lives this year for various reasons, including increased economic
burdens, while mental hospitals are crowded with new patients.

Clearly, the crisis has stressed out people. For yuppies,
relaxing at cafes is still a favorite way to relieve their
stress.

This, however, does not mean that the city's 3,200 night spots
do not feel the crisis' pinch.

"We still have a lot of visitors, but with less buying power,"
Paulus Panggabean, general manager of Fashion Cafe, said.

Dropped

In News Cafe, the average spending per person per visit has
dropped 50 percent, according to Shanti Shamdasani, the marketing
manager. She said visitors tended to come just for a drink and
listen to the music. "They have their dinner at the office or
home to save money."

Both Panggabean and Shanti, however, believed that Jakarta's
night spots would still be in high demand since people needed
entertainment to relieve their stress.

Paulus Wirutomo, a sociologist at the University of Indonesia,
agreed. He was not surprised to find that pubs and cafes have
been crowded during the monetary crisis because such places were
more than food and beverage outlets.

"They seek communication with others. They like being around
other people. They like meeting people," he said.

So far, the crisis has not made people change their lifestyles
as much as one would expect, he said. "If people can still have
fun at pubs, they have no sense of crisis."

On the other hand, said Paulus, showing up at night spots
could show others that one was still in good financial shape.