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.