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Wednesday, August 1, 2007

About business with Indonesia - Part 2

I have experience in doing business in Indonesia since my wife owns a PT (Indonesian equivalent of Ltd. or Inc.) and we trade with my Netherlands based company regularly. As far as I know a CV (regional limited company) can't trade outside of its province, let alone import or export things. PD is local, CV is regional and PT is national/international. So is dealing with a PT a guarantee for good service? Certainly not. It totally depends on honesty of people. My experience tells me that businesses with a Chinese owner are more likely to be in it for the long term. The stereotype Indonesian businessman/woman will rather take $100 today then $1000 tomorrow and the mentality in the country is "you paid before you got the goods or service? Tough luck!". Quality is another issue as many traders will rather ship you rubbish on a trial order for that quick buck then provide quality to guarantee a long term business relationship. Going to Indonesia to take care of business is also not the way to success as you will get scammed by many as soon as you soften up for a moment or turn your back for a second. Don't get me wrong here as I love the country and I think the people are geberally very friendly and hospitable but business brings out the best and the worst in people. Micro-manage everything and don't let any part of your business be run by anyone except a trusted friend or family member in Indonesia is my advice. It's how the Indonesians do it themselves also so there is a good reason for it to be the way it is...
PT can only export with an export license. In practical terms this can be avoided or arranged by bribing the right official (in Indonesia almost everything can be bought for the right price) so it's not a guarantee either but why not ask for a copy of their export license? If they have it they spent at least a certain amount on geting it and the chances are higher that you deal with a legitimate company. I have been ripped off in Indonesia but I have also found many trustworthy people there. So please don't see all of this as a gloom and doom sort of story. Problem with Indonesia is that it's isolated and doesn't actively enforce legislation that's in place. Your rights as a consumer and trader are not as well protected yet as in other countries. Still if you want the lowest price then go to China as Indonesia can't compete (nobody can actually) with them. To get electronics from Indonesia is ridiculous as they import it from China and Singapore themselves. Anyone selling at a lower price then in China must be either stark raving mad or a scam artist.

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