Page last updated at 14:08 GMT, Friday, 7 August 2009 15:08 UK

Haggling to make ends meet

Karishma Vaswani
Jakarta correspondent, BBC News, Indonesia

stallholder at Jakarta's Pasar Rumput market
Almost half of Indonesians live on less than two dollars a day

Jakarta's residents are slowly getting back to business and digesting what happened to their city in last week's attacks.

The deadly blasts in two luxury hotels in the commercial district of the capital, has left many here worried about the impact that this will have on Indonesia's reputation, especially amongst foreign investors.

Over the last few years, Indonesia has been seen as a relatively safe place to do business.

That's a huge change from what it was like in the early part of the decade. The country was hit by a series of deadly blasts, and investors were worried about working here.

Economic growth

But since 2005, it has been peaceful and that has helped the economy to grow on average by about 6% for the last few years.

The BBC is Taking the Pulse of the Global Economy, looking at a range of subjects this summer
Consumer behaviour - how have lifestyles changed over the year
Food prices - which remain a concern particularly in many developing economies
Highly volatile energy prices - which have been a major issue in the past year
The plight of migrant workers - as the global recession takes hold in many economies
Housing markets - which have turned from boom to bust in many countries
Rising unemployment levels - as firms cut back because of falling orders

As a result, more Indonesians have earned higher salaries, and are keen to spend that money, which is why domestic consumption is a key driver of the economy.

It is often said that the one thing Indonesians love spending their money on is food.

The Pasar Rumput outdoor market in central Jakarta is a visual treat for food-lovers.

All around there are barrows and baskets of exotic vegetables and fruits, in all sorts of colours, shapes and sizes.

Old women with wrinkled brown skin and toothless grins smile at me from behind their stalls, trying to tempt me with what they have to offer.

For Jakarta's urban elite, western-style supermarkets are becoming increasingly popular.

Yet for ordinary Indonesians, large outdoor markets like Pasar Rumput are one of the few places they can haggle with shopkeepers for a better bargain.

Food prices have stabilised somewhat in Indonesia over the last year, because of a fall in the price of oil.

Even so, millions of people here still struggle to make ends meet. So trying to find the best price for their weekly food supplies is crucial.

Sensitive issue

This market is where Mrs Martosi, a small business owner, comes on a daily basis for her groceries.

A vegetable stall holder in Jakarta
Food prices have stabilised over the past year

She runs a cafe selling meat stew to the city's professionals and spends about a fifth of her monthly income on food.

"Food prices have gone up in the last two years," she tells me. "I've had to raise the prices of my meat stew to make a profit, but it's not easy. You can't raise prices too much, otherwise you'll turn customers away."

Food prices are a sensitive issue in Indonesia.

Last year, hundreds took to the streets of Jakarta to protest against the soaring cost of cooking oil and rice.

Widespread poverty

According to analysts, the soaring cost of imported food was one of the main reasons behind the former president and dictator Suharto's downfall.

In 1998, because of the massive depreciation in the Indonesian currency, the rupiah, the price of basic household goods went through the roof.

There was wide-spread looting of food at shops across the country as the impoverished struggled to feed their families.

A lot has changed in Indonesia's economy since the days of the Asian financial crisis.

But the challenges remain. The country has one of the highest poverty rates in Asia.

According to government statistics the poverty rate is about 14%, but independent reports say it is much higher.

According to the World Bank, almost half of Indonesia's 235 million population lives on less than two dollars a day.

Making sure that those at the bottom of the economic ladder in the world's fourth most populous nation have access to cheap food is crucial.

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