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.