Visitors' Valhalla a torment for Indonesians

I splashed out this weekend and took an air-conditioned taxi to see a new Hollywood film in a really plush cinema in a Jakarta…

I splashed out this weekend and took an air-conditioned taxi to see a new Hollywood film in a really plush cinema in a Jakarta mall 20 minutes' drive from my hotel. Afterwards I treated myself to pizza and a glass of wine in a really good Italian restaurant.

Later came the reckoning. Taxi fare 40 cents each way. Admission to cinema $1.10. Meal $2.50. Total cost $4.40, or about £3.25.

The collapse of the Indonesian currency, the most dramatic of any post-war economy, has made the country a Valhalla for visitors with foreign money. The rupiah has lost 80 per cent of its value in the last six months.

Because the markets have been closed for a national holiday no one was quite sure what it was worth in recent days. On Monday it sank to Rp16,000 to the dollar, then swung crazily back up to 10,000. The airport bank paid Rp8,000 for a dollar but in my hotel the cashier gave me Rp10,500. Whatever rate one got it was fantastical compared to the what it was - Rp2,400 - before last August.

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Up to the middle of last year, the Indonesian capital was an expensive city to visit. Then the world's fourth most-populous nation was the success story of south-east Asia. Now it is a different country, a place where the economy has spun into a black hole, and where foreigners find they can live on small change.

"Now it's the world's bargain basement," a young South African businessman in Plaza Indonesia said, as he inspected golf-club sets costing around $600 - a quarter of their real value. "A good squash racquet in Johannesburg costs 500 rand," said his friend. "I just bought one for 100 rand."

In the glitzy Sogo department store, occasional foreign customers hurried in and out of boutiques with brand names such as Guess, Versace, Valentino and Givenchy, flashing credit cards as they piled designer clothes on the counters.

"I've just bought Polo shirts at $5; they cost $40 in New York," said a 40-year-old American businesswoman on a shopping spree with her teenage daughter. Rummaging through her smart carrier bags she boasted: "I got Valentino socks at $1.50; they cost $15 at home; Pierre Cardin casual trousers for $9 instead of $40; and my daughter got all these CDs for $5 each. That's a real steal."

In Jakarta today expensive brand-name clothes cost less than the fake versions of the same labels in the silk market in Beijing. Western prices apply only in the near-empty hotels, which charge US dollars, and in the English-language book shops, where novels and guidebooks are more expensive than outside Indonesia. A Maeve Binchy paperback, for example, has gone up from about £3 to £8.

A boon for expatriates, the collapse of the currency is a torment for Indonesians. The price of imported goods is beginning to rise steeply. Combined with the removal of subsidies from basic commodities under International Monetary Fund reforms, people fear hyper-inflation.

What is still ridiculously cheap to the dollar-rich visitor can be beyond the reach of ordinary people. Members of the Indonesian middle class, which has mushroomed in the big cities during 30 years of growth, are finding their new lifestyle eroding fast.

The ultra-modern Jakarta shopping malls with their marble floors and coin fountains, erected at the height of the economic boom, were practically deserted yesterday, the last day of the Idul Fitri Muslim festival. Some businesses did not bother opening. A number appear to have closed permanently.

The large retailers would survive the economic crisis for another six months, but many would go bankrupt if the situation keeps worsening, the Association of Indonesian Retailers' executive director, Mr Kustarjono Prodjolalito, said.

"We've put up the prices about 300 per cent in two months, but the owner has locked away a lot of the stock," said the manager of a jewellery store. "Traders do not dare to sell gold jewellery and customers are not willing to buy because prices are unstable."

In a Plaza Indonesia pharmacy, an assistant said most Indonesian families she knew were suffering. Her brother had lost his job with a foreign company and was desperately looking for another.

"People are really upset and angry," she said. "When the price of a 25 kilo bag of rice went up from Rp40,000 to Rp90,000 they said, `Oh! Oh! What will we do?' " She lowered her voice. "There is a lot of resentment at corruption at the top, people are fed up. They say the rich have sent their money out of the country."

Which reminded me of the movie I went to see. It was Titanic, the story of a big enterprise that sank, taking everyone down with it, except the rich.