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"Consumers have been steadily increasing their expenditures on household goods and are exceeding pre crisis levels of spending in many categories even as their confidence in the country's near term future has dipped."  Stirling also indicated that with an unshackled press and a new spirit of reform, "consumers are becoming more discriminating as they begin to challenge accepted norms. Although it is not a totally new trend, we also sense that Indonesians continue to place an important emphasis on religion and morality and thus may be growing more conservative. Marketers must follow these changes and plan their strategy accordingly. "
         US brands continue to do well but some have had to move to smaller packages if their products are aimed at lower socioeconomic levels.  Imports are still highly attractive to affluent spenders, especially automobiles, since Indonesians may now import fully built up vehicles.  The internet, although an important new trend, is still in its infancy.  Stirling recommends that investors think long term and not expect short run or consistent returns.  A consumer driven recovery has been under way for some time but with confidence slipping, it appears to be quite fragile.
 

A sampling of indicators are:

	44% of Indonesians report that their income has improved, 38% say it has remained the same.
	Expenditures on household, personal care and food  products are up 23% or more since the crisis but savings are down 47%. Consumer durables will therefore have a delayed recovery. An exception is motorcycles; mid-2000 sales are as strong as anywhere in Asia.
	2000 figures for financial services: 28% have a bank account, 3% own credit card, 6% have an insurance policy.
	Nielsen's overall index of retail sales (by volume) are almost up to their pre-crisis levels.  Products that have fully recovered include cooking oil, vitamins, and shampoo.  Market "laggards" include cheese, shoe polish, batteries, snacks, and sanitary napkins.
	In December 1999 59% of all respondents said that national economic conditions were improving but this percentage has decreased to only 36% in July 2000.
	Since 1997 traditional outlets for goods are not recovering as rapidly as the modern trade.  However, although new hypermarkets and supermarkets are reporting good sales growth, 80% of volume of all major food and non food items are distributed by small shops, stalls, and door to door vendors.
	Television is the most important media outlet with 80% of urban Indonesians saying they watch it daily as opposed to reading a newspaper (30%), listening to radio (62%), or reading a magazine (12%).
	The internet audience is still small in Indonesia (3%) and ecommerce is only in its formative stages.  Only 11% of those on the Internet do so at home.  The majority of users log on only at work (52%) or an Internet Café (26%).
	Advertising volumes have also recovered since 1997 in both print and television. Hair care and laundry products top the list of spots.  TV captures 60% of all ads.

The September 14 event was hosted in New York by Avon Products Inc., a manufacturer and distributor of personal care products in Indonesia and worldwide.

AC Nielsen, the largest market research organization in Asia, carries out monthly retail audits and surveys of household expenditures throughout Indonesia including all the major urban markets, employing over 300 people employing point of purchase methodology to augment industry and government indicators.


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MINING AND ENERGY

PSC'S MAY BE ALTERED
      Energy Minister Purnomo Yusgiantoro said  October 31, 200 that Indonesia  would offer more favorable production-sharing contracts to foreign oil and gas partners if the current split failed to attract new investors.  State oil company Pertamina now offers a 15% share to foreign partners in upstream oil and gas projects, but Purnomo said this would be raised if foreign partners shunned Indonesia's next oil-production tender.  "We will review the composition if there are no investors interested," he
told reporters.  (Dow Jones Newswires  October 31, 2000)

INDONESIA TO PREPARE PROVINCES FOR FOREIGN MINING INVESTMENT
       The Indonesian government will set up a consultative team to prepare provinces to handle foreign investments in mining ahead of limited regional autonomy, said Minister of Mining and Energy Purnomo Yusgiantoro on October 31, 2000.   Indonesia

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