Indonesia scooting while big wheels freeze

Debnath Guharoy, Roy Morgan 3

 

|The world’s big wheels remained frozen in the northern winter last week. While the “Occupy Davos” demonstrators heaped shame on the visiting dignitaries, there was one glimmer of hope. For the very first time, “Fixing Capitalism” was a cryptic item inked into the WEF agenda. You can’t fix something that isn’t broken, so the acknowledgement is noteworthy. It is good to see that common sense is beginning to dawn on more political leaders and captains of industry. But let’s not get too enthusiastic. The cynics and the die-hards will keep fighting any efforts for social change, for greater equality, for more inclusion. Anybody watching the Republican party debates in the United States these days has every reason to worry. Left unfettered, a Romney or a Gingrich could privatize the air we breathe, the footpaths we walk on. Unregulated free-market capitalism would reign supreme, with US President Barack Obama’s watered-down attempts at health, financial and education reform all heading for the guillotine. These people aren’t listening to the Occupiers, they are ignoring the Arab Spring. It’s unlikely that the silent and penniless majority of the human race features in their conversations, without disdain. Stuck in a time warp, these old crusaders would inflict their broken ideology not only on their own people but continue their attempts to foist it on the world at large. For the rest of us, there is a growing sense of hope. The American Way is waning, in just about every facet of its influence across the globe. In affluent countries as different as Sweden, Canada and Australia, the signs of a more caring and egalitarian social structure are increasingly visible. Chief executives and boards of directors are being compelled to behave in a socially responsible manner. These smaller societies remain the best examples for the rest of the world to aspire to. Not perfect, but getting better. In developing countries like Brazil, China, India and Indonesia, the focus is shifting to the plight of the underprivileged majorities. Whether these shifts are driven by fear or compassion is a debate not worth having. While corruption remains a cancer in these populous nations, the debate around the world is finally shifting to the needs of the poor and not just the wants of the rich. The wise men and women at WEF have finally started embracing some obvious truths. For one, the fact that sitting on capital isn’t good for anyone, not even capitalists. It makes much better sense to help the poor to become consumers for an ever-growing shopping list of products and services. That means taxes need to be collected, state budgets need to be spent, with social uplift impacting positively on everyone, rich and poor alike. Money would then make the world go round a lot smoother than it is now. Mixed economies like Indonesia can help create a more stable path to progress. State-owned essential services become increasingly available to more people, who become more productive members of a growing consumer economy. Entrepreneurs are left to innovate, create jobs, make money. You don’t need a doctorate in economics to figure that out. So far, neither a stagnant America nor a frozen Europe has dampened the Indonesian economic climate. The country’s internal combustion engine keeps on pumping. Real examples of consumer confidence, like the mobile phones in last week’s column and the continuing industry updates will help reassure everyone interested in Indonesia’s well-being, in these globally turbulent times. Similar stories are coming out of the populous BRICS nations. The focus is shifting and Indonesia need not worry about the old power blocs. Take this week’s update on the motorcycle industry. In Indonesia, and all across Asia, the humble motorcycle is perhaps the most visible sign of economoc progress. Like it or not, they literally add a buzz. In 2011, Indonesia will have added at least another 7 million motorcycle riders to the national roster. At least another 7 million homes will be the proud owners of a pair of shiny wheels. At least 70 percent of all motorcycles sold last year will have been new units, unlike a decade ago when second hand sales were the primary entry point. Today, there are some 60 million motorcycle riders nationwide. Some 40 million households have at least one motorcycle. Customers are becoming more discerning as the fortunes of the old cub-type, or bebek, continues to decline. The revamped and re-styled scooter is taking up the slack, gaining in popularity month after month. Demand in 2012 remains as strong as ever, the nation continues to scoot ahead.

The growth is coming from all directions. With little or no public transport available the smaller cities and towns have the highest level of household penetration, followed by the Top 21 cities. If tax revenues were collected, if corruption was arrested, better infrastructure and more public transport would help ease the congestion that are strangulating Indonesia’s big cities. Rural Indonesia will always need the motorcycle and the industry is set to enjoy continued growth for decades to come. Most 2-wheeler homes have a refrigerator, all of them have a television set. These three possessions together reflect the aspirations of Indonesia’s growing middle class. Next step up the social ladder is a Kijang, perhaps second hand, to begin. More about cars, next week. The conclusions are based on Roy Morgan Single Source, the country’s largest syndicated More than 25,000 respondents are interviewed every year, week after week. The data is projected to reflect 87 percent of the population 14 years of age and over. The writer can be contacted at debnath.guharoy@roymorgan.com

 

The Jakarta Post