Selamat pagi (Good morning) Bobby, from beautiful downtown Jakarta.
The first thing I noticed here was the traffic is still as congested as my last visit (April 97). On previous visits, I could see the skyline change with new construction in the heated economy each time I visited. This trip, the tower cranes are idle, but there is still a lot of hussle - bussle in the city.
The hotel occupancy is down. I stay in the Ambhara Hotel in the Bloc M District. This hotel caters to Government and business. Absent are the Government officials, and far fewer expats are here. I recognized some French, Australian and U.S./Canadian accents. Occupancy seems about 50% and the flight was only 75% booked. Previously it would have been 100% respectively.
According to our agent, all local financed projects are in trouble as devaluation of the currency threw purchasing costs of imported materials out of their budgets. But international financed ones are still proceeding. His business is 35% international financed, so like so many, he has adjusted his business accordingly. Interest rates are up at 70%, which is a bitter pill in the short term, but will have a corrective effect in the long term.
We meet with our consortium partner over the next few days, then I leave for site tours south of Surabaya (east of Jakarta on the Island of Java). Sudarto has advised of several other IFI financed projects that he thinks we can win. total value in the $20 - 30 Million range. I will try to bring in another North American partner to bid with us.
In summary, I see a nation adjusting to the new realities of the economy. As I stated earlier to Richard, Indonesia is rich in natural resources and as the world's 5th most populous nation, the largest archepelago with all the communications and transportation problems that come with it, it represents an excellent opportunity for those with the patience to ride this incipient downturn.
I will post other assessments after I visit the outlying areas.
Regards,
John |
