A ketoprak lunch and reflections on Global Value Chains (GVC)

The picture above is my lunch. My wife made ketoprak today to cure our longing for Indonesian food. I suddenly craved bakwan and my wife brilliantly suggested turning it into ketoprak.

This may be the best ketoprak in the world (this sentence is written under my wife’s supervision). But no, seriously, the ketoprak was great. I am a loyal bakwan (or bala-bala, depending on where you are from) fan, but what probably made the ketoprak so good was the peanut sauce. The sambal kacang was amazing. Just a little lacking in spiciness.

But my wife is far from a chef. What made it delicious was that the peanut sauce was store-bought, not homemade. A few days ago we went to an Asian grocery store and bought this brand of bumbu pecel (peanut sauce mix).

GVC in the Household

Of course, my wife is no culinary maestro. Making peanut sauce from scratch requires a great many ingredients. Different recipes call for different seasonings. And supposedly, even with 100% identical ingredients, if different hands do the grinding, the taste will differ.

In other words, making peanut sauce from scratch is not only tedious – it may well be more expensive than buying it ready-made, with no guarantee of being tastier. Meanwhile, the product we bought has a ton of certifications: halal, ISO, and HACCP. If my wife were asked to get all those certifications, how much would it cost?

This is one of the strengths of GVC. With just one producer, how many households can produce their own ketoprak? And with store-bought peanut sauce, you are more flexible. You don’t have to make ketoprak – you could make pecel sayur, pecel ayam, pecel lele – all with the same sauce.

Peanut sauce is not only competitively priced (many brands, all cheap), but can also be supplied to households even in other countries. Countries that don’t have many pecel vendors can now enjoy pecel easily and cheaply.

Blocking Peanut Sauce Imports

Imagine a husband who doesn’t like his wife cooking with store-bought sauce. He insists everything must be made from scratch. He plans to ban purchases of peanut sauce and even budget subsidies so that his wife can do everything herself: grow the peanuts, grind the sauce, all the way to finished ketoprak.

You can immediately picture what would happen. Making peanut sauce is not something every wife can do efficiently. Just for peanut sauce, wives would lose time for other, more productive activities. If I gave my wife money to make peanut sauce from scratch, she would probably still buy the ready-made version and use the leftover money to upgrade the ketoprak – say, by adding chicken. Pecel ayam, anyone?

Especially if the wife is super productive. If she is a homemaker, time for housework and childcare would have to be cut to make pecel. If she has a career, her work hours would be reduced. Or maybe her leisure time. All for homemade pecel that might not even taste better.

But perhaps some households take genuine pride in homemade pecel. That’s fine too. Maybe in the long run, the wife’s skills improve enough to open her own pecel restaurant. Great. But not every woman wants to become a pecel vendor. If all women became pecel vendors, who would do everything else? Men? Meh.

Welfare Effect on Pecel Vendors?

Those most annoyed by factory-made peanut sauce are probably pecel vendors. If all households make their own pecel with store-bought sauce, vendors’ profits could drop as their customers cook at home. But if the husband was already a pecel customer, he’s unlikely to stop buying pecel from vendors entirely. That would be hypocritical.

Top pecel vendors will still want to compete with factory-made sauce. By making their pecel tastier and more special, adding better toppings, offering a pecel-and-coffee combo, or providing free Wi-Fi. All of this makes consumers happier.

Of course, my household is not part of any anti-import club. Blocking peanut sauce imports only hurts households that want to make peanut-sauce-based food. Making pecel from scratch is inefficient for some households and diverts time, effort, and money from more productive activities.

And trust me, good peanut sauce is a lifesaver. OK, that’s enough. I’m going to go finish my pecel. Until next time!