Tuesday, April 1, 2014

Cashing In on Indonesia’s Campaign Crush

By Vanesha Manuturi

Splashed across the website of Carana Advertising, a printing services firm based in Solo, Central Java, is a banner that roughly translates to “selling cheap shirts for 2014 presidential election.”

Meanwhile, in Central Jakarta, another printing company called Prima Xpress displayed a wide banner in front of its store, shouting discounted package deals for legislative candidates in the area.

It’s no surprise the festivities of election campaigns aren’t limited to the nation’s political pundits. Across the archipelago, small and medium businesses enjoyed the rush of campaign spending by politicians, which have driven sales to new highs.

“It’s been incredible,” said Wiwin Carana, the owner of Carana Advertising. “We even started receiving t-shirt orders from March last year.”

The shop owner said his business — which makes shirts and batik for numerous companies and organizations — has grown as much as 200 percent in sales since last year solely from electoral campaigns.

The company has processed an average of 50,000 to 70,000 pieces per month since March last year, Wiwin said, who also claimed to have pocketed an additional revenue of around Rp 250 million ($22,000) to Rp 300 million per month from the legislative elections.

Wiwin no longer receives orders for legislative candidates, but he said the company is currently preparing for the presidential elections in July.

Jakarta-based Prima Xpress, which offers large-scale printing services such as name cards and posters, also said it has witnessed a surge in printing orders with the election campaign this year.
“Orders have definitely increased, but I’m not entirely sure how much yet,” Ita, a worker at Prima Xpress, told the Jakarta Globe on Saturday. She said the business had processed orders from at least 80 legislative candidates from various political parties in the area, including the Indonesian Democratic Party of Struggle (PDI-P), People’s Conscience Party (Hanura) and Democratic Party.

The growth force from electoral campaigns was even felt by sales promotion girls, or SPGs, in the country. Decked out in heavy makeup and perfectly coiffed hair, SPGs are usually spotted at music festivals and car shows. This year, a large number of legislative candidates have hired the attractive wiles of these salesgirls as a ploy for their election campaigns.

On average, one legislative candidate could spend up to Rp 1 billion for their electoral campaigns, according to economist Drajad Wibowo. “It varies from one candidate to another, but I’ve heard of legislative candidates spending up to Rp 8 billion,” said Drajad, who was a legislator between 2004 and 2009 with the National Mandate Party (PAN).

Drajad is still a member of party and although he is no longer a legislator, he still serves as the deputy chairman of PAN. To a certain degree, this has definitely boost the lower- and middle-income class spending, Drajad said.

“It’s an especially big boost in the regionals. While in Sumatra, for example, warungs [small shops] that barely saw visitors in the past are now crowded with customers because of the legislative campaigns,” he said.

Purbaya Yudhi Sadewa, the head of economic research at Danareksa Insitute, also shared Drajad’s observations. “In the past two election rounds, the country saw a surge of movements in the domestic sector — money is distributed and it’s also spent,” said Purbaya to Jakarta Globe last Tuesday, adding that the paper and textile industry have benefited the most during previous election seasons.
The food and beverages sector also sees growth of an added 5 percent, according to Drajad.

Merchandise, as well as snacks and beverages, make up a large chunk of a candidates’ expenses due to frequent visits to the constituents, which requires basic amenities, like water dispensers, instant coffee sachets, instant noodles and even bedding.

Dini Mentari, a legislative candidate from the United Development Party who claimed to have spent around Rp 500 million so far, said that merchandise, like name cards, make up at least 25 percent of her expenses.

The remaining 75 percent comes from a combination of personal expenses, including transportations costs — from Jakarta to Bandung and back again — and team expenditures, she added.

Another legislative candidate in the Central Java region said she is close to reaching Rp 1 billion in spending so far. Restu Hapsari, a legislative candidate from PDI-P, added that most of the funds go to posters, banners and name cards.

“Of course, there are also operational expenses for the campaign team, and food. Every time you go out to introduce yourself to constituents, you must provide food,” she added.

Though recent elections may have boosted consumer spending, Indonesia’s economy has not yet escaped the array of challenges brought on by a global economic slowdown and a higher interest rate environment.

This article originally appeared 31 March in the Jakarta Globe.

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