Jakarta Suffering Huge Economic Losses Due to Floods: Kadin

Dion Bisara, SP/Hotman Siregar & ID/Wahyu Sudoyo

[Updated on January 18, 2013]

The massive
flooding that hit Greater Jakarta on Thursday paralyzed economic
activities and may significantly curb the capital’s economic growth, a
business group says.

“This is due to absent employees,” the
deputy chairman of the Jakarta Chamber of Commerce and Industry (Kadin),
Sarman Simanjorang, told Beritasatu.com on Thursday. “As the center of
the national economy, Jakarta’s economy has been disturbed by the floods
that, up until now, the government still has no clear solution for.”

He
added that businesses expected the Jakarta administration and the
central government to draft a plan with a definite timetable to solve
the crisis.

The Jakarta Industrial Estate Pulogadung, one of the
capital’s manufacturing centers in East Jakarta, reported that most
assembly and logistics companies in the area were forced to halt
operations on Thursday, as the area was inundated by waters as high as
one meter.

“Most reports from the field said the companies
stopped production,” said Dicky Digdoyo, JIEP’s operations and
development director, as quoted on the company’s website on Thursday.

Flooding
disrupted the transport of goods in and out the complex, as well as
prevented most of the area’s 75,000 workers from clocking in.

Around
a quarter of Jakarta’s Rp 1,000 trillion ($104 billion) economy relies
on the manufacturing and transportation sectors, data from the capital
region’s statistics agency show. Jakarta’s biggest economic contributors
are financial, rental and corporate services, accounting for almost 30
percent of the capital economy.

Business offices along Thamrin,
Sudirman and Gatot Subroto streets were besieged by high waters, with
many employees unable to reach their buildings.

Muhammad Ali,
corporate secretary of Bank Rakyat Indonesia, said operations at 50 of
its branches in Greater Jakarta were affected. BRI has 864 bank offices
in the area.

Finance Minister Agus Martowardojo warned that the
floods would disturb the distribution of goods and services nationwide
and could, in turn, stoke inflation.

“This situation is just
beginning,” Agus told reporters on Thursday, “Jakarta was impacted this
much, let alone other regions with less infrastructure.”

Agus said he expected inflation would inch up to 1 percent on a monthly basis in January, compared to 0.5 percent in December.

Torrential
rains from Wednesday night until Thursday morning brought the capital
to a standstill, with floodwaters halting TransJakarta busway services
on Thursday and limiting commuter lines. Many workers, including civil
servants and private employees, were unable to make it into work.

There were no official estimates on Thursday as to the cost of flood-related lost economic output in Greater Jakarta.

In
2007, major flooding in the capital over the course of one week was
estimated to have amounted to Rp 3.6 trillion in unrealized economic
output, on top of an estimated Rp 5.7 trillion in damages to public and
private assets.