Meet the real neo-libs of Indonesia The Jakarta Post visited a number of traditional markets to see how they

are struggling for survival in the face of fierce competition, particularly from big, modern supermarkets. This report and related stories on the next page were jointly prepared by Utami Diah Kusumawati, Sebastian Partogi, Nadia Sarasati, Muhammad Edy Sofyan, Khoirul Amin, Haeril Halim, Aswiditiyo Nedwika and Arfan Wiraguna. Traditional markets may be coming under a lot of pressure from the modern, bigmoney supermarkets and hypermarkets, but small traders know a thing or two about surviving the competition. And that may just be their saving grace. Anyone looking for evidence of how a free market operates based on the forces of supply and demand simple economic theory only needs to pay a visit to one of these markets. If prices are fixed at supermarkets, here shoppers can haggle they are expected to haggle over prices and both traders and buyers come away happy when they have struck a good bargain. The opportunity to negotiate is one of many attractions that have kept housewives sticking to traditional markets clean or dirty is irrelevant in purchasing some of their daily needs in preference for the more convenient, large supermarkets. Meet the real neo-libs of Indonesia. Socialists and those who advocate for government intervention better stay away. Many of these traders are doing well, although admittedly some are feeling the pressure of competition from the bigger players. Ipah, who runs a vegetable kiosk in Pasar Kebayoran Lama, says shes doing okay. I have my loyal customers, the 55-year-old says. She may not have a business degree, but she knows something about the importance of human relations. To beat the impersonal supermarkets she offers extra services such as cutting and peeling shallots, knowing her customers are busy or simply loath the tear-jerking ritual. Life has been kind to her. She is the proud owner of a house just a few hundred meters away, has sent her four children to college, and with her husband made the haj pilgrimage to Saudi Arabia in 1995. All this from selling vegetable since 1985. Santo, a rice trader at Pasar Grogol, also goes for more personalized services from his kiosk that is strategically located near the main entrance.

The 60-year-old helps his customers choose good quality rice and even allows them to return and exchange bad rice. For his poorer customers, he allows them to pay in installments. He may not have a deal with Visa or Mastercard, but he has built trust with his customers. He admits that he has felt the competition from supermarkets, but he is not giving up. I am determined. I want to make sure my daughter finishes college, he says. His son had already dropped out of school to work. For some traders, however, the modernization of markets has not necessarily improved their business. Where they are located is more important than the condition of the market. Sugiharti, who sells chicken at Pasar Mayestik , says business has dropped significantly since she and all the vegetable, chicken, fish and meat traders were relocated to the basement of the newly renovated building last year. Fewer shoppers come to the market since the relocation. The 60-year-old finds it hard to compete with supermarkets, even with haggling. Once, my lowest price was Rp 19,000 [US$1.97] per kilogram while supermarkets were selling it for Rp 14,900, she says. There were days when she made no sales at all and had to give all her 12 chickens for sale away to relatives and friends. At this rate, she may have to give up her business completely, and she will have to rely on the salary of her husband, who works for a TV station in Jakarta. Miya, who runs a store selling household goods at Pasar Grogol, says her income nowadays barely covers her living expenses. Often I have to juggle paying the electricity bill or having a decent meal, she says. The family has survived on government rations of cheap rice. A decent meal for her means eating rice with tofu or tempeh, what she calls boneless meat because real meat is rare for her. She laughs off her condition, saying that humor has kept her going. If we let ourselves get stressed out, then they would send us to the Grogol mental hospital. Ngadiran, the head of the Indonesian Traditional Market Traders (APPSI), says it takes a lot of hard work and dedication for traders to survive the fierce competition. Sometimes they have to take up a second or even third job through the day, he says.

Without the extra income, I just cannot imagine how they can live, he says. Traditional markets are also a place for people who have no capital and no real skills to eke out a living, from the parking attendants to the market coolies. And yes, somehow they survive. A case in point is Solikin, a 44-year-old who has worked at Pasar Mayestik since he was a little boy, helping people carry their shopping bags for Rp 3,000 to Rp 5,000 at a time.

TRADITIONAL MARKET, HOW ARE YOU TODAY ? BUSINESS ESTABLISHMENT IN RETAIL There has been tough competition in the retail sector since modern retailers startedto play a part in the Indonesian retail industry. small retailers are marginalized fromthe market because they cannot compete with larger modern retailers. Many factorshave contributed to the rapid growth of the retail industry. Among them was theretail liberalization policy which removed the retail industry from the list of industriesclosed to foreign investment. This policy was encapsulated in Presidential Decree No.96/2000 on Business Fields that are Closed to Investments and Business Fields thatare Conditionally Open for Investment, and in Presidential Decree No. 118/2000 onthe Amendments to Presidential Decree No. 96/2000. These regulations regulate thetrading services sectors and the supporting sectors that are closed to investment fromcompanies supported by foreign capital or foreign legal bodies. The decrees exemptlarge-scale retail trade (malls, supermarkets, department stores, and shoppingcenters)The retail industry holds a strategic position in Indonesias economy, and is part ofthe backbone of the national economy. In 2003, retail business potential reachedRp600 trillion and it contributed 20% to gross domestic product. The rapid growth ofthe modern retail industry is currently causing a shift in the retail market share,where modern retail is eating more and more into the traditional retail share. Slowlybut surely, modern retail is controlling retail market share.On one hand, sharp competition in the retail industry can be positive for consumers asit results in increased choices for consumers. Retailers with large amounts of capitalbehind them can easily provide consumers with a variety of products with differentprices and quality, safety,comfort, and cleanliness. They have a virtually unlimitedcapacity for value creation, which gives them more power in the retail industry. Onthe other hand, a negative impact of this can be the marginalization of traditionaland small-scale retailers. Without any assistance from the government, small-scaleretailers with their limited financial and management capacity will suffer