A common conversation topic nowadays is how slow the economy has become. Friends in media and show businesses find it difficult to obtain advertisements and sponsorships, pals in fast-moving consumer goods and telecommunications (typically easy to shell out dough) confirm cutbacks on non-pivotal promotions because sales have been slow.
Slowing down consumer spending is not exactly news. My contacts in retail industry have whined, in varying degrees, about missing targets as far back as Idul Fitri last year—a trend formed along subsequent Christmas and Chinese New Year. An argument says consumers have shifted to online shopping, where goodies are more varied in types and prices. While it’s possible, I haven’t seen the numbers that conclude that the decline from physical stores have all migrated to their online counterparts. Referencing consumer confidence reports for the past year, lower consumption is the likely reality.
For a few of investments in real sector that I have, lower purchasing power and stretched-out terms of payment is all too much of a reality. As my income come solely from contract jobs and dividends, instead of steady paychecks, I ended up cutting back expenses myself.
My father criticized this decision as we compared notes on our investment portfolios recently, when I moaned the state of our economy. He said if the downturn bothered me that much, I shouldn’t have made it worse by spending less. Then he threw me the classic after-all-that-education-I-paid-for-I-still-had-to-explain-this-to-you eyeroll.
Okay, okay– so on my way to earn business degrees, which admittedly Dad paid for, I did learn early that consumption makes up the basic equation for economic growth. The other key factors are invariably savings, investments, and Government spending. How so? Consumer spending drives business, which gives reason for producers to not only run the business but also expanding it (read: committing investments). If consumption is miniscule, businessmen have no reason to expand or invest– no matter how low the interests given by banks for business loans.
How much consumption weighs in on our growth? A few years ago economist Chatib Basri, then the Minister of Finance, was widely quoted in media citing 55% as consumption’s contribution to our economy (do Google his “Belanja Pangkal Kaya” write-up). Even if the percentage has changed recently, I don’t suppose it will be so much as to eliminate consumption as the formidable driver of our economy—which means, with just a little hike in consumption, the economy as a whole will considerably grow.
The government, on their part, recently started to spend on infrastructure developments. While it is great, it takes a while for the effects to trickle down into much of the real sector. Our consumption will carry more instant effects. So, you want us to get out of this downturn? Shop.
Now, while it may seem imprudent to spend when your income doesn’t come according to a certain schedule, like us freelancers, it isn’t that hard to sit and work out a sensible spending budget. Moreover, a large chunk of urbanites do enjoy steady paychecks and thus have no reasons to curtail spending. I always suspect an intangible part of the consumer confidence rate is psychological connection—people around complain of economic woes, you start feeling you’re having some, too. Chances are you’re not. So why not spend more?
And in Jakarta on this last week before Ramadan plenty shopping opportunities are offered by local talents. There’s the first Muslim Fashion Festival (Muffest), organized by the newly-formed Indonesia Fashion Chamber, a growing group of seasoned designers who during their time in previous fashion organization had successfully run Indonesia Islamic Fashion Fair for years. Held in Istora Senayan, Muffest is featuring dozens of Indonesian labels, some of which are critically-acclaimed labels like NurZahra, which in March 2014 became the first ever modest fashion label to grace Tokyo Fashion Week.
Another worth checking event is Fashionlink Ramadan Market, collaborated by the Jakarta Fashion Week (JFW) organizer with Senayan City, featuring the most promising local designers groomed by JFW in recent years.
Naturally consumption does not constitute only of purchasing wardrobe. You can also spend on food, books, furniture, white goods, renovations, travel and services like spa and car maintenance. Develop a hobby and dedicate a leisure budget for it. You don’t even need to buy new things—you can spend on preloved or vintage merchandises and still get the economy rolling.
Now, especially on travel—it is one sure way to spur growth far beyond your postal code. Idul Fitri is a much-awaiting break for many Indonesians, not just to visit family but also to travel. Step out of your comfort zones; try new destinations that aren’t yet popular, sample their cuisine and crafts. There is a growing number of domestic adventure tours to some of Indonesia’s most remote and jaw-dropping corners– like Kakaban Trip, with whom my pals and I went island hopping in East Kalimantan and East Nusa Tenggara since last year and which I can recommend for their professionalism.
So put this down, and go out there. Shop, eat, travel. Let your budget, not contagious negative sentiments, dictate your spending. These months in Indonesia, really, spending is patriotic. It’s for the economy. Be merry and go on your spending spree. Wheeeee!!