Spending plans unaffected by Bali bombing: Survey

Spending plans unaffected by Bali bombing: Survey

The Jakarta Post, Jakarta

Consumer confidence in the country significantly dropped in
November following the Bali bombing, but the terrorist attack
failed to impact consumers' shopping plans, according to a
survey.

According to the survey by the Danareksa Research Institute,
the Consumer Confidence Index (CCI) dropped by 4.8 percent to
94.1 in response to the bombings in Bali and Manado on Oct. 12,
with confidence in East Java, the nearest province to Bali,
falling the most by 8.0 percent from 107.8 to 99.2.

"People, concerned about their safety, are not sure what may
happen next.

"Confusion mounted when a number of local 'pundits' introduced
a variety of nebulous conspiracy theses that served to obscure
rather than illuminate the issue amid a mountain of sorrow and
fury among the victims' families in the aftermath of the terror
attack," the survey said.

The index measuring confidence in the government sank to 103.2
from 108.3 on concerns over security issues, rising prices and
lax law enforcement.

People expressed doubt about the government's ability to
provide security, enforce the law or stabilize prices, it said.

Of greatest concern is the inflation-depreciation cycle that
threatens to erode purchasing power amid a wildly oscillating
rupiah, and the November year-on-year increase in prices from
10.3 percent to 10.5 percent.

Confidence in the rupiah tumbled 9.2 percent to 65.4 percent.

The government's quick and firm response in hunting down the
perpetrators of the Bali bombing helped to stabilize the currency
and to keep the erosion of confidence in check.

As such, Danareksa said, erosion of confidence after the Bali
bomb blasts was relatively mild compared to the periods after the
Jakarta floods in January this year and the Sept. 11 terrorist
attacks on the U.S in 2001.

"In fact, the onslaught in Bali did not alter the spending
intentions of shoppers over the next six months. The desire to
buy durables remained unaffected as the percentage of shoppers
intending to purchase durables increased from 21.6 percent to
nearly 24 percent," it said.

Confidence in the government's economic team to expand the
country's economy stayed nearly unharmed (the index only
retreated by 0.8 percent), while sentiment on the team's ability
to rebuild infrastructure rose (plus 0.9 percent), it said.

"The government seems to have learned its lesson from its
indecisiveness in the aftermath of the Sept. 11 event that saw
confidence hammered by 7.8 percent," it said.

The survey was carried out by AC Nielsen for Danareksa, based
on a representative sample of at least 1,700 Indonesian
households across six different main areas of the country.

The index ranges from 0 to 200. If the index is lower than
100, it means pessimistic responses outnumber optimistic
responses, while the opposite holds true if the index is above
100.