The news is in: Indonesia’s economy grew by 6.4 per cent in quarter two of 2012, surpassing quarter one’s 6.3 per cent – and that’s despite the slowdown in exports, which dropped 5.8 per cent in May. This country of more than 242 million has remained economically robust, with a growing mining industry as well as strong domestic consumption.
One example that illustrates this is technology supplier Bosch: at its latest annual press conference in Indonesia, held in August, the company announced that in its 2011 business year it reported a 42 per cent growth in revenue, totalling US$93 million. It also revealed plans to open more offices in the archipelago.
At the end of last year, Fitch Ratings brought Indonesia back to investment grade after 14 years of junk ratings, and in January this year Moody’s Investors Service followed suit. Suddenly things are starting to look up… but it has been a long road.
A new dawn
After the 1997 Asian financial crisis wreaked havoc on the Indonesian economy, Suharto resigned as president and ended some three decades of authoritarian rule. The country subsequently went through a difficult period of political reform, culminating in its first direct presidential election in 2004. Since then increased stability has propelled economic development, and in 2011 Indonesia ranked 16th in GDP according to the World Bank.
Although this ranking was still relatively low for a country with the world’s fourth largest population, given the speed with which its economy is growing and the continuous turmoil in the Eurozone, Indonesia will almost certainly be a few slots higher at the next count.
When I arrived at Jakarta Soekarno-Hatta Airport last April, I could immediately feel the buzz. The airport handled 51.5 million passengers last year, which makes it the 12th busiest airport in the world, surpassing Changi as number one in Southeast Asia. Unfortunately, the facility was built in 1985 for 22 million passengers a year, and there has been no major upgrade since. It shows: the facility felt dated, and at immigration the queue was long and movement was slow.
However, things will hopefully get better fairly soon. State airport operator Angkasa Pura II broke ground on August 2 on the expansion project for Soekarno-Hatta, which aims to boost passenger capacity to 62 million people by 2014. But in a country where infrastructure projects have been known to experience delays and even cancellations, one cannot afford to be overly optimistic.
Driving from the airport to my hotel, the newly opened Pullman Jakarta Central Park (see here), also gave me first-hand experience of the city’s infamous traffic. Much of the time the car moved at a snail’s pace, but I was luckier than some, as my hotel’s location in West Jakarta was closer to the airport; my transfer took 45 minutes, but had I been staying downtown the journey would’ve been well over an hour.
The Pullman is located in a new 21-hectare, mixed-use development called Podomoro City, which was born out of the need to get around the city’s traffic issues. “It’s like a city within a city; we have the office building, we have the retail complex and there is a hotel, so it’s very convenient and people can stay in one area,” says Veri Y Setiady, executive director of Agung Podomoro Land which developed the project. There are 11 apartment towers in the development, as well as four hectares of green space.
Setiady adds that shopping centres have become a way of life in Jakarta, with people spending an average of five to six hours per visit. Other than Jakarta residents themselves, a large chunk of Podomoro City’s retail business comes from visitors from other cities in the country. “The middle-income sector is growing very, very fast, and they mostly go to Jakarta for shopping and spending the weekend with family. It’s good to have Pullman Jakarta Central Park, as on weekdays it’s mostly businessmen, and on weekends it’s mostly families,” he said.
Problems to solve
For those business folk who do have to venture into the centre of town, dealing with chaos is part and parcel of each day. Even crossing the road can sometimes be impossible since in many areas there are no traffic lights. After a visit to the Fatahillah Square in Kota, the old town district, I and my group tried to cross Jalan Bank to get to the ATM, but it seemed like an age before we had a window of opportunity – and the nerve – to run to the other side.
Even around the main roundabout of Jalan Bundaran HI, in the beating heart of Central Jakarta, the roads are not well designed. There are few crossing points, and pedestrian bridges look old and shoddy. You find yourself asking why, with the country becoming increasingly affluent, the necessary public works aren’t following at the same pace. The sad answer of course is corruption – a fact acknowledged even by the country’s president Susilo Bambang Yudhoyono when he spoke to parliament on August 16, ahead of Indonesia’s independence day.
Although the country’s top leader has spoken out, few believe that things will change much in the short term. For one, the culture of corruption is too entrenched in the national mindset. General manager of Pullman Jakarta Central Park, Fabrice Mini, who has lived in the country for 15 years and speaks Bahasa, said: “Indonesians are the most sincere people you could ever meet, but a few individuals can be funny when it comes to money. Those would have the tendency to want to take as much as possible, because of the idea of ensuring their own future.”
The best example of how its under-regulated environment has hindered infrastructure development is perhaps the scrapped monorail project, which was halted in March 2008 after 150 columns had already been built. The cessation was due to legal and financial problems with the developer PT Jakarta Monorail.
Discussions have recently begun between government officials to use the columns for an elevated bus rapid system (BRT). The Indonesian capital currently has Transjakarta, which is a BRT on ground level but with dedicated lanes. The head of the local branch of the Indonesian Transportation Society (MTI), Tri Tjahjono, was quoted in the press in August saying he supports making use of the columns for a new BRT system instead of reviving the monorail project, as it would cost less and require no new expertise in maintenance. But a final decision, if it ever materialises, might still take years.
Indonesia is without a doubt rich in potential, but if improvements to infrastructure and regulatory systems do not happen fast, things will reach breaking point and development will slow to a crawl or stop altogether. “There are too many political issues here, so they are not focused,” says Setiady. “We need a very strong leader.”
Dine around town
When the urban chaos of Jakarta gets a bit much, duck into one of these unique restaurants for some respite.
1. Café Batavia
Housed in a restored 19th century structure featuring wood-frame windows and French window shutters, this 18-year-old restaurant has long been popular for its theme parties and live music. The interior features a wood banister, teak flooring, ceiling fans, dramatic floral arrangements and many framed pictures of 20th century entertainment personalities – you could very well be in a restaurant on Bourbon Street in New Orleans. Looking out of the windows you can see many restored colonial buildings, including the Jakarta History Museum, and when the jazz music starts playing you may find yourself thirsty for a good ol’ gin and tonic.
The menu features traditional Indonesian dishes as well as international favourites such as salads, burgers, spring rolls and spaghetti. The food is nicely presented, with the gado gado ingredients nicely arranged around the bowl of sweet peanut dressing and ready for mixing, and the nasi goreng presented as a half globe on a square white plate, accompanied by a small salad and fried chicken and topped with a prawn cracker. The dishes offered here are hit-and-miss but frankly, it’s really the ambience that you come here for.
Average meal cost: US$20 with some drinks
Jalan Pintu Besar Utara 14 (Depan Museum Fatahillah), tel +62 21 691 5531, www.cafebatavia.com
2. Dapur Babah
Operated by Tugu Hotels Group in Indonesia, this restaurant takes diners back to the glorious days of Batavia by refurbishing a pair of 1940s shophouses on Jalan Veteran, just off the city’s central Merdeka Square. The term “Babah” refers to the Peranakan community formed by cross-cultural marriages between Chinese settlers and native Javanese women during the Dutch colonial era.
The interior is modelled after the house of a prominent Babah family in the early 20th century, with reclaimed teak furniture, old photos on the walls and rustic houseware such as pestles and mortars, scales and meat grinders, placed around the interior, creating an authentic feel. There is also a semi-open area called the Garden Room.
The menu features Indonesian, Dutch and Chinese dishes, including sop ajam Babah (a homely chicken soup with omelette-rolled shrimp balls and vegetables), and kakap biefstuk oen (fried breaded snapper fish served with fried potatoes, string beans, carrots and butter sauce).
Average meal cost: US$30 with wine
Jalan Veteran I 18-19, tel +62 21 7060 2256 / 385 5653, www.tuguhotels.com/dapurbabah
Located in a mansion built in 1928, this restaurant has become an institution since it opened in 1970. Coming here is like being the houseguest of a prominent family. A doorman greets you as you arrive, and in the entrance hall Sundanese musicians play the gamelan while a ceremonial gong sounds to mark your entrance. Female guests are handed corsages.
Black-and-white checked tile floor, giant chandeliers hanging from the high ceiling, Indonesian tapestries and paintings by famed local artist Hendra all come together to create a sense of grandeur. We were led through two expansive dining halls to our table by the garden terrace’s door, and after browsing through all the menus, we settled on, at the advice of the manager, the rijsttafel menu. It is a bit like a degustation menu, featuring dishes that showcase the extensive herbs, spices and produce the archipelago offers. The food, which includes everything from Indonesian oxtail soup to salad, satay and nasi, is prepared by a team of housewife chefs, and they go up in a group to guests’ tables to introduce and serve up their offerings. The meal ended with exotic fruits
The service throughout the evening was flawless, and we really did feel like very special guests. Music from the string band added a nostalgic feel to our meal; the experience was thoroughly enjoyable, and we loved being able to pop out to the nicely landscaped garden for fresh air between courses. Had we had more time, we would have stayed on for a drink at The Topeng Bar, which is decorated like a cigar room.
Average meal cost: US$35
Jalan Raden Saleh 47, tel +62 21 315 0646, www.oasis-restaurant.co.id