(Article for the Jakarta Globe – issue date 10 December 2012)
MONEY WISESIMILAR FINANCIAL CONCERNS AROUND THE GLOBE
I have just returned from a few days in the UK. Was there any chance ofescaping from the kind of financial woes that exist in Indonesia? – No way! The
news media was full of the same topics that preoccupy us here and served as areminder that we cannot afford to neglect these issues, wherever we live.
Starting with floods
Indonesia is no stranger to flooding and those of us who have lived for sometime in Jakarta will recall the year when over half the city was flooded and theairport was cut off for several days. In the UK many areas stretching from thesouth-west to the north-east suffered unprecedented flooding as a result of
several days of unabated rain. One of the concerns voiced was thathouseholders in newly flooded areas might not be able to find insurance
against flooding in the future. So I guess the moral is, if you can get insurance
now, do not fail to do so. The same applies to any form of insurance, including
life and medical. It’s too late to apply once you have signs of a serious illness.
Even if you show no symptoms the insurance companies’ medical experts may
determine you had a pre-existing condition.
Burdened with loans?
Clearly many people in the UK are. And not just loans for houses or cars which
are too expensive for the average person to buy with cash, but also highinterest loans just to make ends meet. These are generally taken up by people
who least can afford to repay the extortionate rates of interest, resulting in adownward spiral to misery. The latter is what the British government is seeking
to control, and it will join the good company of Germany, Canada, Australia
and the US, all of which have placed caps on the rates that loan companies cancharge. In the absence of such controls in Indonesia it is left to the individual toresist borrowing money at outrageous rates. The credit card companies arebad enough but I hesitate to ask what rates are charged by all the ‘kindly’ loan
companies who offer their services, particularly by way of spam text messages.

How much do those messages cost you?
On the subject of spam messages, Indonesian mobile phone owners are notalone in the world. You may think it costs you nothing to read and delete but
have you ever put a value to the time you waste on them? You will also have to
pay for them if you receive them via roaming when travelling abroad. You may
be tempted to request your removal from the sender’s database or even replyabusively. Unfortunately this will only confirm to the sender that your number
is active and it could be sold on to other spammers! If they didn’t get hold of
your number this way in the first place the chances are that yours is just one ofthousands of random numbers they try. The only way to deal with spam is toignore and delete. Yes, spam text messages are a nuisance in the UK too. – But
the difference is that they are illegal and the law can clamp down on them.
Last week a firm called Tetrus Telecoms was fined four hundred and forty
thousand pounds (almost seven billion Rupiah) for sending out large numbersof spam text messages. Any chance we can expect similar treatment of thisnuisance in Indonesia?
And finally, a familiar topic
Assuming we live long enough, everyone is faced with retirement at somepoint. Western countries like the UK have helped prepare people for it fordecades. Big companies have traditionally provided generous pension schemes
which enabled workers to retire on a given percentage of their final salaries.
But something has gone badly wrong. A headline in one daily newspaper last
week read ‘Britain’s corporate stars face pension time bomb.’ The calculations
to fund pensions were made in an era of high returns from the financial
markets. The last decade has seen a collapse in these returns resulting in bigcompanies like BP, BAE Systems, Shell, Rio Tinto, British Airways and Unilever
to mention just a few, being burdened by commitments of billions of pounds
to pensions falling under the old regime of defined benefits. No such issue inIndonesia where pension funding is a relatively new concept. But it is areminder to all that neither governments nor companies can be relied upon toprovide for us completely in retirement. It is an issue everyone needs to takeon board yesterday at the latest!

Colin Bloodworth, director of PPI Indonesia, has spent over 20 years inIndonesia. If you have any questions on this or a related subject you cancontact the writer at indonesia@ppi-advisory.com