Indonesians struggle to save for future

The Jakarta Post, June 10 2005

For taxi driver Sandy, in his 20s, meeting his family's daily needs is a hard task, and it is even more difficult for him to put money away in a savings account. The burdens on him have gotten heavier since the government's decision to increase fuel prices by 29 percent on March 1.
But Sandy, who has worked as a taxi driver for a year, still manages to allocate a little money for his top priority: his children's education.
"I just recently paid Rp 1 million (US$105) to enroll my five-year-old daughter in a kindergarten," said the father of two.
With a monthly income of about Rp 1 million, Sandy has to seek extra money to feed his family by running a small-scale printing shop.
"The printing shop has helped me and my wife so that we can save a little bit," he said.
According to a recent survey by market research firm ACNielsen, savings came in at number one, when respondents were asked where their spare money goes.
The company said on Thursday that 57 percent of its 510 respondents nationwide preferred to put their spare money into a savings account over other expenditures. The figure is slightly lower than last year's 59 percent.
The online survey, conducted between April 11 and May 10, shows that paying off debts, credit cards and loans is second with 36 percent.
ACNielsen Indonesia Executive Director Catherine Eddy said in a press briefing that consumer spending for holidays had increased to 28 percent in the first half of this year from 26 percent in the corresponding period last year.
Surprisingly, cash allocations for retirement funds were the lowest with only 5 percent, although the figure is higher than last year's 2 percent.
"Indonesians lack of interest in putting their money into retirement funds is similar to many neighboring countries such as Australia, China, Hong Kong, India, Japan, Malaysia, the Philippines and Thailand," said Chaterine.
According to ACNielsen -- which interviewed 21,261 respondents worldwide over the internet in 38 markets for the survey -- spending patterns emerged in different areas when it came to how the respondents allocated disposable income.
More than one-third, or 36 percent, of the world's consumers put extra money into savings, followed by out-of-home entertainment, holidays or vacations and new clothes.
In Europe, most consumers put cash into savings accounts for upcoming vacations or buy new clothes, more than any other region. By contrast, Asians remain the world's super savers with 51 percent putting their money away for a rainy day.
For Sandy, who occasionally has the desire to buy new outfits or take vacations, saving for his family's future has become his main goal in life.
"I have long for a better living, but surely hard for me to even have a glance at it with the country's existing economic condition," he said. (001)