Jakarta Bomb and Indonesian Economy

Jakarta residents fearlessly surrounded the bombing scene, while policemen dealt with the terrorists.

The Indonesian Central Bank (Bank Indonesia -BI) estimates that the impact of the bombing in a little spot of Central Jakarta (14/1) to the financial market turmoil is only temporary. BI’s Executive Director for Economic and Monetary Policy, Judah Agung admitted a presence of a slight fluctuation in the foreign exchange market and stock exchanges after the blast. However, the impact to the market did not stay longer.

Indonesia stock price index fell 1.72 percent (77.86 points) to 4459.32 at the close of first trading session of the day but rose again and closed at 4513 or only 0.53% lower than previous days’ closing.

“The impact will be temporary because Indonesia’s (economic) fundamental is currently quite good,” Judah said in Jakarta after the bombing, Thursday (14/1).

The country of 250 million populations enjoys good economic fundamentals along with controlled inflation and stable financial markets. The Indonesian Central Bank lowered the benchmark interest rate by 25 points to 7.25 percent. “The condition of today’s bombing did not affect our decision related to the BI rate today,” he explained.

Lana Soelistianingsih, Samuel Asset Management’s Head of Research also agrees that the bomb will not weaken Rupiah significantly. She believes that the rate cut will effectively prevent Rupiah from significant fall.

However, economists stressed that in order to maintain economic and financial stability the government needs to provide security assurance.

President Jokowi (front, second from left) immediately came to the terror scene. (KOMPAS)

Undertsanding the need of security assurance, President Jokowi with Jakarta’s governors, Basuki Tjahaja Purnama and several ministries visit the bombing area without heavy protection, immediately after the terror. He firmly sent the message that there is no need to be over react and panic for the Police has effectively control situation. Thousands of people flooded into the scene fearlessly, confirmed the president message that everything is under control.

On social media, Indonesians confidently pushed #KamiTidakTakut and #WeAreNotAfraid as trending topic, showing the national fight against terrorism.

Several tourism business owners reported that the terrorist attack did not affect their business.

“Until now we haven’t received information regarding (tour) package cancellation. Up to last week, we have recorded cooperation with 550 travel operators spread all over tourism destinations in the country, “said Bramantyo Sakti, Chief Executive Officer of Triptrus.com.

“Our business activities continue as usual. It makes us more enthusiastic to support the tourism industry in the country,” confirmed Noor Aini Rachmawati, Public Relations and Advertising of Ezytravel.co.id.

In the same day, from the State Palace, Minister of Industry, Saleh Husin confirmed that business sector and industry do not have to worry. All activities like manufacture, distribution, and selling has promptly resumed to normal. He confirmed that Indonesia expects to see 5.6-6.1% growth in national industry this year. (AFX)