Monetary crisis the kiss of death for 7 nightspots
JAKARTA (JP): At least seven nightspots in the city have closed down while dozens of others are on the brink of collapse due to sluggish business and soaring rental rates, a senior official said yesterday.
Toha Reno from the City Public Order Office said the affected nightspots had lost half of their regular patrons since September but had to continue paying rent which had increased tenfold.
"The closure of the seven venues will create some serious problems for the city, including a significant drop in city revenue and a substantial increase in unemployment here," Toha said.
Among the seven nightspots which have closed down are the popular Stardust discotheque on Jl. Hayam Wuruk in West Jakarta, Ebony on Jl. Rasuna Said in South Jakarta, and Asmat discotheque and pub on Jl. Gatot Subroto in South Jakarta, he said.
He identified the remaining four venues as Manhattan discotheque on Jl. Mangga Dua in Central Jakarta, Scorpion discotheque on Jl. Samanhudi, Central Jakarta, Mawar Ceria discotheque and Karaoke on Jl. Mangga Besar and Selayang Pandang on Jl. Mangga Besar VIII, both in West Jakarta.
Toha said the closures had generated a new force of unemployed workers numbering in their hundreds.
"Stardust, for instance, closed down its business operations a month ago. Up until now, there has been no further announcement whether it's going to reopen or not," he said.
Dozens of the city's 3,527 karaoke pubs, bars, discotheques, massage parlors and other entertainment spots are also facing a tough time and struggling to survive during the economic turmoil, he said.
He refused to name the ailing venues.
In dollars
Toha said most nightspot operators in the city leased premises in complexes, such as prestigious towers and even houses, and were charged rent in U.S. dollars by the owners.
"During such a financial crisis, it's hard enough for everyone, including the nightspot operators, to survive let alone pay the rental rates which have increased tenfold," he said.
One of the most exclusive and well-known Dutch restaurants in town, Memories, announced Tuesday that it would serve its final meals on Valentine's Day, which falls Saturday.
The restaurant manager, Klaas Kemp, said Tuesday that the venue's monthly rental rate of nearly US$10,000 had become exorbitant since the depreciation of the rupiah.
Toha said the financial problems facing businesspeople, including those running hotels, would also lead to an increase in unpaid taxes.
"It is clear that the number of people evading paying their taxes will soar because businesspeople can no longer meet their obligations ... they don't have enough money to keep their businesses afloat," he said.
The soaring prices of many imported items, such as liquors, prime-cut beef and other imported foodstuffs, make it even harder for entertainment spots to survive.
"Those businesses are in a difficult situation. They cannot increase their price or cover charges, otherwise people won't come.
"It is also impossible for them to lower the price to attract more visitors ... because they cannot afford it," Toha said.
Based on the latest data from the City Revenue Agency, some 40 entertainment spots and another 185 hotels and restaurants in Jakarta failed to pay their taxes during the fiscal year of 1997/1998.
"Most of them complained that they could not afford to stay in business at the moment. But we have no choice but to collect the taxes," Wahab Rachmatsjah, head of the agency, said.
City councilor Nitra Arsyad of Commission E for social welfare said it was normal for entertainment spots to close down during a an economic climate which was not conducive to business.
"People (nightspot patrons) choose to start being thrifty at this time. So the first things they cut from their budget are entertainment expenses. People rarely dine out or go to the movies.
"In this tight economic condition, I think most people prefer to sit at home than go out. Because going out means spending more money," he said. (edt)