Memo from Jakarta
From: Uli Schmetzer.
Re: In a country with a tattered economy, one entrepreneur is a rare success story.
Before the economic crisis crippled Indonesia’s building industry, Farida Gunawan ran three factories manufacturing bricks, tiles and timber door frames, materials in such demand she needed to hire extra day labor to satisfy the orders.
Judging by the fate of her competitors, she should be bankrupt today, battered by what the World Bank has described as the worst collapse of a nation’s economy since World War II. The depression has left one-third of Indonesia’s labor force of 90 million unemployed and turned a 7 percent average growth rate into minus 15.
Of the country’s 230 banks, only eight are still considered healthy. Few companies can still boast liquidity. On the outskirts of the capital, unemployed people have set up food stalls to eke out a living. Millions scrape through on their savings. In one year, the rupiah-U.S. dollar rate plunged from 2,500 to 15,000 rupiahs.
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But Gunawan, 50, has done well. She predicted an imminent future in which unemployment and food shortage would become chronic. The way out, she felt, was to recycle her assets for a different market and keep the machinery for better days.
Within weeks she converted the 1.5 hectares around her timber frame factory into a vegetable garden that already sprouts and sells to local markets.
She turned the tile factory into a poultry farm using bamboo scaffolding from construction sites to build chicken coops.
Then she converted the tubs of her brick factory into fishponds to breed fish. She turned the furnaces into egg hatcheries. With imported fertilizer far too costly, she used the chicken manure to fertilize her vegetable plots. She imported a breed of Australian worms and set them free on a municipal garbage dump. The worms’ metabolism converted the dump into manure for her expanding vegetable farm.
An architect by profession, she bought books about agriculture, chicken and fish breeding. She brought Silky Hen eggs from Australia and hatched them. The chickens sell now at three times the price of the native variety.
Gunawan kept her 38 workers employed in the new ventures.
Then she converted her tile factory into a fitness center, using the bricks she could no longer sell for partitioning, the door frames and timber rotting in storage for structures, floors and decor.
“It is coming along nicely,” she said, looking across the acres of flourishing vegetable gardens, some on land she has leased, that are now part of her new empire.
Though Indonesia is a nation whose natural resources are considered Asia’s richest–it is the only Asian country to be a member of OPEC, the organization of oil-exporting countries, Gunawan’s success story is a rare one. Indonesia has been run into the ground by years of blatant official scams, easy unsecured loans, rampant corruption, nepotism and the transfer abroad of vast amounts of funds.
Now foreign carpetbaggers see the country as a bargain bazaar: One Indian brought his own ship and loaded it with earth-moving machinery and cranes he bought at knock-down prices and shipped them off to Europe.
An Egyptian bought all the electronic equipment in several factories and transported them to Port Said. Near-new buses, luxury cars and machines are sailing abroad.
“It’s bargain time. Sometimes you feel the whole country is for sale. It’s a shame, because company assets are often worth more than their shares on the market,” said Keith Loveard, an Australian economic analyst here, commenting on surveys that claim 60 percent of Indonesian companies are technically bankrupt.
Envy, under control when times are good, has turned into racial hatred, notably toward the small community of ethnic Chinese, which makes up only 3 percent of the population but owns 75 percent of Indonesia’s private wealth. Many Chinese–Gunawan among them–now pay monthly protection money to security forces to keep the mobs from their villas in residential complexes or their downtown shops.
Today, Gunawan keeps her Mercedes and BMW behind the roll-down doors of her garage and tools around in a battered old Jeep. Her children now live abroad, and she has obtained a residence in Australia–just in case the situation becomes
untenable.
Like so many others in Indonesia, she’s covering as many bases as possible, convinced it is likely to get worse before it gets better.