 |
| Indonesian Unemployment |
The journey is not yet finished (38)
(Part Eight thirty, Depok, West Java, Indonesia, 4
September 2014, 17:31 pm)
The economic crisis of 1997 hit many industrial sectors
Indonesia, because it can not be separated from the impact of the global
economy, particularly in Asia, so many many export-oriented industries were
closed.
To the extent that my neighbors were husband and wife who
are both working in garment factories in the Gang, Namgka should be terminated,
the husband swerved So now toll call sellers, while his wife made buns that are
sold to the surrounding stalls.
In front of my house is also a husband and wife working
in a textile factory in the company, because the factory closed the wife is now
selling groceries in the house, the husband so the distributor groceries (rice
and other household needs), after severance money he bought a mini truck.
At the time of crisis never happens increasing the value
of the dollar to Rp 20,000, - per one dollar. Gold prices also had soared 14
carat gold price so that I previously had not sold, I could sell Rp 3 million
at a gold store in Pasar Rebo, East Jakarta.
Thanks to God eventually Indonesia are among the seven
countries in the world that escaped and avoid prolonged world economic crisis.
CIRCLE OF INDONESIAN ECONOMIC CRISIS PDF Print E-mail
Written by Lili Salama
Wednesday, 17 November 2010 15:35
THE JOURNAL OF CULTURE AND POLITICS
Volume 14, Number 2: 65-76
Circle of Indonesia's Economic Crisis
Lili Salamah1
Department of International Relations, Faculty of Social,
Airlangga Uiversitas
Indonesian economic crisis since the per-mid 1997
continue to roll until now. In contrast to ASEAN countries such as Thailand,
Malaysia and the Philippines were jugas storm hit crisis, neither their
relative had been able to handle it, while Indonesia until Semes-ter of 2001
was the first "air-walking in place" in the sense of not been able to
get out of the crisis dihadapimya economy. The visible indication of the growth
of the real GDP per-mid 1990s until the pre-crisis menun-jukkan average above
7%, after the crisis plummeted -13.7% (1998), -3% (1999), and 1% (2000); while
the inflation rate swelled from 6.47% (1996) to 11.05% before the crisis
(1977), 77.6% (1998), 25% (1999), and 15% (2000) (Tim FISIP Airlangga
University, 2000: 68). Another visible indication of the value of the rupiah
against the dollar. Before the crisis the value of Rp 2,682 / per dollar,
continue to fluctuate and the early half of 2001 through the boundaries of
psychological Rp. 11,000 (USD 7000 when the state budget mematoknya) which
means the value of the rupiah depreciated by more than 300%.
Why Ekono-mi crisis in Indonesia? And why the Indonesian government is very
difficult to get out of the crisis? Per-question is interesting because
observers beforehand even the World Bank is optimistic that Indonesia would not
hit hurricane crisis, as happened in the Asian countries.
The factors Causes of Crisis
In early 1997, there was a lot of parties (including
Indonesia) Indonesia estimate that mem-sa-lah including the Asian countries
that are vulnerable to economic attack by currency speculators. Meninges-digit
growth in short-mi Ekono Indonesia and decreased ang-average poverty ka
pe-riode since 1970s strengthen-me optimistic that Indonesia will face a strong
threat mone-ter crisis that hit the region. By pointing to the macro-economic
indicators Indonesia, the World Bank (1997) even said that the Indonesian
economy was in a condition ready to face the financial crisis. Similar optimism
was shown when the Indonesian government in the second week of May 1997 the
Thai Baht currency came under speculative. Optimism be turned when in July 1997
quickly spread effect is felt bebe-few countries in Asia Teng-gara. Strong
pressure allegedly committed by foreign currency speculators forced the Central
Bank of Thailand on July 2, 1997 mengam-developed Baht exchange rate. Crisis
ASEAN countries continued to decline in the value of the Philippine currency
(Peso), Malaysian (ringgit), and Indonesia (Rupiah). The monetary crisis in
Indonesia and then continued into an economic crisis.
Views on the causes of the economic crisis in Indonesia
is very diverse. Classical economists like Krugman to see the economic crisis
in Asia, especially Indo-nesia caused by domestic factors, among others, the
practice of crony capitalism and lack of fi-nancial structure related to
macroeconomic policy. Its reverse, Keynesian economists like Prof. Kindlebeger
see the crisis occurred because the financial market sentiment that caused
panic and cause the transmission pa-da national economic system. Se-while it
Soedradjat Djiwan-dono J. (1999) saw that the crisis that hit Asia particularly
Indonesia due to a combination of external forces and the weak financial
structure and the domestic economy.
Externally, there are three influential fa-tor. First,
glo-balilasi capitalist economy. In this context, trade on the da-sarnya
explain his ongoing currency internationalization process large number of
countries in the vast scale that not only run the sovereignty of national and
regional economies, but run a very competitive competition, where imperialisasi
and supremacy kekuat's economics major industrial countries against small
countries are very influential. Phenomenon, the currency of the country in
control of economic globalization and the industry itself become a tool of
international transactions is very dominant, and its dynamics are very
influential on the world economy. Secondly, market fluctuations. Along with the
globalization of the capitalist, money is no longer just a transaction but has
become an instrument of physical goods as well as the real sector which could
be sold at any time as well as buy and sell goods and services. In such a
constellation that determines the fate of the exchange rate of the national
currency against the currency is not an internal problem (government policy)
but is determined by the market (Jawa Pos, 1997). Third, the role of
speculators. As per the laws of economics, the more demand will raise the price
of tilapia. Before the Asian financial crisis, the ba-sperkulan know that many
countries in Asia have a short-term foreign debt that will mature. The
speculators trying to profit deng's high sales value over the dollar they are
needed. Speculators bought it so that dollars become scarce and the value of
domestic currency be toppled. Prime Minister of Malaysia, Mahathir Mohamad
(1998: 2) says bankruptcy Asian countries suddenly and together not because of
bad government, corruption, crony capitalism and nepotism, but because
speculators seeking profits resulting devaluation money and Asian countries
were not able to pay the debt.
The Fall of the rupiah earlie-narnya not be separated
from psi-kologis factors, namely the crisis of confidence pa-sar. When the
value of the rupiah fell, the government through the Bank Indonesia has intervened
among other markets to sell dollars-then followed the spot market. Policy- late
until the third week of July has spent 1.5 billion dollars. But dollars can not
be stable, the government finally release dated August 14, 1997 the exchange
rate. The release rate is Didu-kung tightening mone-ter through increased
interest rates and sterilization, but this policy did not work either. Various
financial improvement efforts indicate failure.
Because of this situation, the Indonesian government
repeatedly intervened in the rupiah money market in order not to fall
drastically, but the efforts were unsuccessful. On July 11, 1997 the Indonesian
government intervention expands the range of 8% to 12%. However, this step does
not seem to work because the first week of August 1997, the rupiah at Rp 2,682
per dollar while the second week of August 1997, the rupiah fell to Rp 2,755,
or 25.7% decrease. This situation forced the Indonesian government revoke the
range (band) intervention of dollars on August 14, 1997, these efforts were not
successful in preventing the collapse of the exchange rate. Entering the month
of September 1997, the decline in the exchange rate has reached 39.8%.
Faced with this reality on 16 September 1997 his
government tah delaying major projects worth Rp 39 trillion. However lang-kah
is also not yet menyehat monetary Indonesian-kan. The rupiah would continue to
decline, se-up more difficult Pemba-postdated foreign debt when it reached 130
billion dollars (consisting of 60% debt and 40% of private government debt).
November 1997, the rupiah fell to Rp 4,000 per dollar. December 1997 fell again
to Rp 7,750 per dollar. January 1998, to Rp 10,000 rupiah subside and even
per-nah Rp 17,000 (due to illness news Suharto). February 1998 rupiah to between
USD 9100-9800. March 1998 between Rp 11,000 and 8,600. April 1998 between USD
7,575 and 8,600. May 1998 between USD 7,960 and 8,100. June 1998 between Rp
11,600 and 15,000. July 1998 between 14,800 and 13,225. In October 1998 an-tara
Rp 14,800 and 7,800. After that the value of the rupiah up and down constantly.
Failure of the above can not be separated from the
internal condition of Indonesia's economic fundamentals are very weak, which is
an error-lam da strategy of nation-al application development. First, the
development strategy emphasizes pertum-harbor. Since its launch Pelita I, the
government set a national growth strategy meni-tikberatkan on building
in-dustri that sustains agriculture. Priority me-ngakibatkan growth strategy
development, for the sake of efficiency of the production process, in
focus-right in the center of a certain region, the area of Java and
pu-sat-center of a large city. The results are quite encouraging me-indeed, the
average growth since the 1980s, reaching 7%, but in real terms equalization
lame, the living standards of the population on the island of Java,
particularly in large cities, much higher than the other islands.
 |
| Indonesian Poor Houses |
Secondly, the strategy builder's "menganak
favoring" businessmen-ha. With emphasis on Pemba-opment of industry and
targets to increase exports, the government needs entrepreneurs as partners,
whereas at that time the position of the lawyer-domestic business is still weak
in all circumstances. As a driving force in-vestment, the government not only me-nyediakan
contracts, as well as li-sensi project as a single agent, melain-'re also
giving great credit to entrepreneurs and giving subsidies to various sectors of
the eco-nomi. As a result, employers Tergan-tung in government where
pe-government into machine-harbor pertum economic as well as a driver of
investment and wealth-sian pengaloka state. Meanwhile, to increase exports and
expansion of business, government backs loans give ease and lu-son, and gave
permission to seek private loans ne-geri. In reality, the ease-limb-then
advertised it often misused by employers such facilities kridit As its
export-na is not used properly. While it's borrowed short-term foreign
commercial, by private entrepreneurs in-use for which projects a long-ka like
properties. When matured, these entrepreneurs liquidity problems for boa-yar
installments of principal and interest repayments.
Table: Debt Position of Foreign Affairs
period
Commercial loans
loans
Non-commercial
sub-total
ODA
non-ODA
1993
2,169
37,818
12,474
52.461
1994
1,727
41,761
15,130
58,618
1995
1,085
43,335
15,169
59,588
1996
1,048
38,888
15,367
55,303
1997
890
38,163
14,812
53,865
Source: Economic-Financial Statistics Indonesia (Jakarta:
Bank Indonesia, May 2000).
Third, the construction of over-reliance on foreign debt.
Since the beginning of the New Order government power, the Suharto regime has
established the importance of foreign investment and foreign debt. Through Law
No. 1/1967 the government opened wide foreign investors. At the same time the
government also getting debt from abroad, either on a bilateral basis nor in
that multilateral. The assumption, per-plant fast-Lukan memer definitely a big
loan, especially from abroad. Cash-flow is essential for development funds
(Mohammad, 1998: 3). As a result, government debt continues to mem-swelling.
Noted foreign government debt and state-owned enterprises in 1993 amounted to
52.461 million dollars, increased to 58,618 million in 1994, and successively
his seterus be 59,588 million, 55,303 million, 53,865 million in 1995, 1996,
and 1997. The table below menun-jukkan Indonesian foreign debt position.
Although it showed a slight decrease in the amount of
foreign debt in the last two years, but the decrease was not very significant
compared to the GDP with debt repayments must be issued each year. When Suharto
regime tum-bang he left a legacy of debt that is very severe. Until July 1999,
the number of Indonesia's foreign debt had reached 150 billion dollars, an amount
that me-placing Indonesia as one of the debtors ter-large faction among all
lawyer-debt countries of the Third World. If the World Bank data is used, where
the debt per capita average of 377 dollars, while income per capita per year in
its actual value ha 425 dollars, then Indonesia has been able to put in the
group of poor countries "heavily indebted" in where the ratio of debt
payments (debt service ratio) Indonesia has reached 54% even since 1985 has
been in the top 30% (Journal of Transformative Social Sciences, 1999: 6).
Fourth, strategies pembang-unan-based system
otoritarianis me. To do business to achieve the strategy pattern pertum-harbor,
the government move in the flow of investment clicking memerlu-right a
political regime that is able to control the market competition and national
stability. For the sake of national stability, the government did a series of
me-mu-lai policy of depoliticization of the masses, want-dalian political elite
and bureaucracy through the steps of structural titusional smooth-ins, such as
pene-gaze legislation to lang-kah-destructive step through terror politics.
Security approach (se-curity approach) this generates economic development
sta-bil, but its nature is very apparent. To-compliance and participation of
the people da-lam construction not because of moral consciousness, but because
keterpaksanaan and latent fears. As a result, once the New Order regime
collapsed brave people revolted. Demonstrations, strikes as well as the
emergence of dozens of new political parties, acts as a form of discontent that
had been buried it.
With the above strategies, the development in Indonesia
spawned two top layer Ekono-mi major political, the political bureaucrats
involved in the family business, and businessman who developed her air-kat
government support. Both He-linings perekonomi dominate early and politics in
the New Order. Fruit of the above strategy, estab-building macro economy showed
a fairly resounding success, but the sub-stansial bubble economy (bubble
economy) which is ena simply clicking on the top layer, while the bottom layer,
a layer of majority only enjoy a fraction of the droplets cake of development.
Economic foundation pro-forma is very strong, with an indication of the
magnitude of GNP, GDP and the amount of exports, is actually very fragile. At
the same time, the practice of auto-ritarianisme very membe-lenggu
Meye-democratic principles have caused mass uncertainty. Aki-result, the crisis
that originally came from the financial aspect extends into the economic and
political crisis since a burst of political pressure that has long oppressed.
Recovery Efforts
As explained above, kri-sis Indonesian economy stems from
the financial crisis. In order not to continue the financial crisis, efforts to
prevent pe-restoration of many of his capital flight and its declining
international confidence, ba-kukan steps include:
1 In December 1997 the finance minister did road shows
abroad to convince the creditors;
2 To overcome the problem of hu-tang formed overseas
Foreign Debt Negotiation Team under the leadership of Private Prawiro-wrapped
with the various leaders of an international bank, like the Bank of England,
Standard Chartered Bank, and Bank of East Asia Switzerland;
3 Ensure full at all depositors and creditors of all
commercial banks incorporated under Indonesian law, both national private, like
any joint government;
4 Intervention BI on foreign exchange markets and
interest rate policies of SBI;
5. establishment of the United Front comprising the
Deputy Minister of Finance of Japan, Eisuke Sakakigara same air-Finance
Minister Singa-pura, Malaysia, Australia, and the United States to immediately
take concrete steps mem-aids crisis and rescue the Indonesian economy.
6 Formed Economic Resilience Council and Ke-financial
(DPKEK).
7 In order to restructure the banking sector, formed a
new glue-baga, namely Penye-health-Banking Agency (IBRA). This step was taken
un-tuk restore public confidence in the national banking system that can either
stop the rush at the same time withdraw funds run or parked abroad.
8 Because public confidence in the international economy
is greatly reduced, in October 1997 formally requested the assistance of the
IMF (Djiwandono, 1999: 52). This idea is based on the premise that India and
South Korea is currently experiencing a similar crisis was successful thanks to
the help of the IMF through a precautionary arrangement. Mid-Sep-tember, 1997,
Stanley Fisher da-tang to Indonesia at the invitation of the Minister of
Finance, Mar'ie Mu-hamad, later in the dis-kusinya with the IMF team pim-pinan
Herbert Neiss, Fund Director for the Asia Pacific, with the Indonesian Team
phon-pakati Memorandum on Econo-mic and Financial policies, and a Letter of Intent
(October 31, 1997), a program of economic reform policy package to stabilize
the exchange rate and other monetary variables.
Realization among others, during the period of 1998 the
government once issued a strike-clothes macroeconomic policy. Realization among
others, the government made a series of macro-economic reform policies such as
some decisions presi-den, government regulations, and instructions of the
president.
In accordance with the recommendation of the IMF, the
government did penye-structural adjustment and thus increasing the efficiency
and competitiveness. The measures that the IMF is recommen-tie (Ismawan, 1997):
a. Accelerating's scenario gradually lowering tariffs.
Import duties for the pro-duk chemical, iron / steel and pro-duk-fishery
products should be lowered so be 5-10% in 2003 Beginning January 1, 1998, most
of the rates of chemical products was reduced from 10-20% to 5%. Meanwhile,
most of the rates of iron / steel derived from 1 January 1999 Decrease in
import duty chemical products and iron / steel has strategic significance in
the context of the abolition of monopolistic market structures. The same thing
appears on the IMF recommendation that local pricing guidelines (HPS)
komo-ditas cement is removed in the near future.
b. Loosening the marketing of air-like staple commodities
such as wheat, wheat flour, soy and garlic. Starting January 1, 1998, these
goods can be imported freely. Garlic imports subject to import duties of 20%,
10% wheat flour. Tariffs were lowered to 5-10% se-not to protect customers in
2003, while, his government tah subsidize wheat flour. What are reco-linear set
of key IMF with domestic observers criticized me-ngenai unfinished
deregulation. During this staple commodity is recommended un-tuk is released to
the market mechanism, but the government still objected to the reasons for
maintaining the stability of supply and price.
c. Gradually reduce the barriers and export taxes.
Achievement pertumbuh's exports from January to July 1997 menun-jukkan yet signs
of improvement. Exports grew only 9.44%. But better than the non-oil exports
oil and gas.
Economic reform package basically includes four important
aspects, among others, (a) restructuring the financial sector, (b) the fiscal
reform; (c) bi-dang monetary reform; and (d) structural adjustments that
downloading rate reduction cover several sectors of industry and agriculture.
Glue-baga-financial institutions that need restructuring includes private
banking, Bank Regional ment of his government, government banks, glue-baga
financing, pension funds, insurance, mutual funds, and perusa-pany effect
(Voice Reform, 1997).
The main program is a package of policies related to
banking reform and efforts to strengthen the financial infrastrutkur and
revamping of the real sector of the national economy. Which essentially form a
comprehensive policy to restore keopercayaan market and put a halt to the fall
of the rupiah. This program deals with three areas:
a. Strengthening the framework of macro-eco-nomi
b. Comprehensive strategy for re-structuring the
financial sector, including the closure of troubled institutions
c. Structural measures in all fields to
memper-rehabilitated performance of government and the private sector.
Realization is reflected in a series of se-ministerial
policy include:
1 Decree of the Minister of Finance No. 15 / KMK.017 /
1998 on the restriction of pen-chum opening bank branches and ca-bang mix of
foreign bank.
2 Decree of the Minister of Finance No. 16 / KMK /
01/1998 concerning customs duties penu-ity several pro-duk agriculture,
lowering tariffs whole food products mak-proximal five percent, with the goal
of keeping prices affordable and reasonable.
3 Decree No. 17 / KMK / 01/1998 ten-tang reduction in
import duty on certain products.
4 Decree of the Minister of Industry and Trade No. 21 /
MPP / Kep / 1/1998 on the exemption from liability Bu-log-busikan mendistri
flour.
5. Decree of the Minister of Industry and Trade No. 48 /
MPP / 1/1998 on the revocation of any barriers to the distribution of cement.
In the conduct of its IMF program does not work alone but
in collaboration with the World Bank and ADB. In the case of the Asian crisis,
the IMF has disbursed funds are less. Thailand received a stand-by loan of 4
billion dollars or 505% of their quota. Korea received 21 billion or 1,939% of
the quota. Indonesia has received 10 billion or 490% of the quota, the steering
wheel's on the tam-July 1998 got 1.5 million which means the materials whol 0%
quota amount.
Critics
During these programs and crisis management policies and
the economic recovery is executed by clicking the approach using traditional
recipes and the IMF. Despite criticism can download from various parties, and
the IMF's own conduct air sorts of revisions and modifications, the essence of
the approach and the IMF medicine still remains the same, namely to focus all
efforts on improving the ability to pay the debt. For the purpose of the IMF
was said to prioritize efforts on fiscal tightening and mo-neter is primarily
intended to be a contraction of fiscal and monetary policies. In order to
achieve these objectives there are some positive and useful for the purpose of
recovery of the crisis, such as the need to eliminate all forms of dis-torque
and preferential treatment in the allocation of economic resources. Na-mun, in
actual ter-can some-thing menim rise to resistance to imple-mented programs and
economic recovery policies.
Various empirical case-showed me that the policy package
by IMF in developing countries se-dang, almost identical and generic. In
general, the IMF provides loans to improve the balance of payments position.
However, countries that receive aid must implement fiscal and monetary
contraction in order to ensure the return of available surplus debts old and
new. Appears some criticism, the IMF's track record in restoring the crisis in
developing countries is relatively not very encouraging. The IMF is not a role
in encouraging a more sustainable economic recovery but create more continuous
dependence on external sources. According to Martin Khor, the IMF's
prescriptions are not going well for Asia because the IMF does not understand
Asia. The IMF has implemented the conditions are not right for Asia since the
crisis recovery experience to reflect on his experience restoring crises in
Latin America and Africa, while in Asia the rate of inflation and the economy
marked a high budget deficit and public sector debt. Harvard economist, Jeffrey
Sachs, said the IMF worsened the Asian economy by increasing existing panic is
panic withdrawal of funds in the market. Doubts over the ability of the Fund in
recovering the economic crisis in Asia, especially Indonesia has grown. This is
because traditional ingredients IMF considered too generic, tend to be oriented
to the West and not adaptive to local country conditions. According Bingxi
Zhen, head of the World Economic Division at the Institute of International
Studies in China, the IMF's strict policy that does not specifically pay
attention to the specific conditions of the country concerned, made many
countries suffer more from not exactly the recipe IMF (Reuters, 1998). Based on
these empirical observations, it is not surprising that the performance of
per-Indonesian economy is still not encouraging.
Multi Dimensional Crisis
Although there are various criticisms, in an effort to
get out of this crisis the Indonesian government would not want to, like it or
not remains to be done for economic cooperation - "patient" - the
IMF. As the international economic institutions, the IMF is at once a symbol of
the driving force of international market confidence. The problem is
deterioration of the crisis in Indonesia in wallowing true because the role of
the IMF and the recipe does not work? The problem is not so. The economic
crisis is just the trigger of a burst of pent crises that ripen social and
political turmoil in a comprehensive manner.
Political pressures between ma-covered New Order's
political stability, as well as various te-social right as long as it has given
rise to dissatisfaction. Keti-ka New Order regime to promote national
development, membu-tuhkan infrastructure - roads, land and other
infrastructures production - much hit the ground "proprietary" or
customary land rights of the people. They are forced to "sell" and
"give" field, farm or land is under threat of intimidation and
accusations of anti-development. When the regime fell, along with demands for
reform became aware of their rights. They trooped to demand their rights. While
institutions are desirable as a court of law apparently ambivalent may not even
care about the fate of small people. Along with these economic policy reforms
under the regime of President BJ Habibie and Abdurrahman Wahid as recommended
by the IMF to reform and efficiency, among others, the liquidation of the bank,
close the Ministry of Social Affairs and the Ministry of Information has led to
new social problems. Peng-angguran increased dramatically, especially in the
urban areas of Java, which is estimated at more than 50 million unemployed.
Meanwhile, people living below the poverty line-to increase from 11% to 25% of
the entire pen-seat in 1988 Likewise, school dropouts, crime, prostitution and
other social problems increased. As a result, social chaos, chaos law, the
Justice lawyer-mass, and the security chaos in the form of crime and social
pathology occurs everywhere.
Tragically, this condition is exacerbated by racial
conflict in various areas such as Atambua and Sambas, and the rise of the
disintegration of the various areas of business, such as Aceh and Irian Jaya.
And the more tragic turns of the political elite from its former commitment to reform
Flag Indonesia towards a new order apparently conflict with each other both on
a personal level as well as clamp-existing institutional. Session of Parliament
to discuss the Memorandum I (late March 2001) and the Memorandum II (end of Mai
2001) on charges of misuse of funds and fund donations Yanatera Bulog Burnei by
Pre-President? Abdurrahman Wahid who continue rolling until Isimewa Assembly
session beginning in August 2001 is proof of how elite put forward political
reform political interests rather than the national eco-nomi. Social chaos and
political turmoil negate efforts to improve the economy, like enforcing the wet
yarn.
 |
| US unemployments |
Vicious Cycle
National development will be achieved well when three
related elements (political institutionalization, political par-cumulated, and
the na-tional stabitas) went well. National stability will be created when
there is political institutionalization of the supra-structure (ruler) and his
circuit-premises infrastructure (people) are tough. But this will not be
achieved if not accompanied by political par-cumulated intact, in the sense of
the people and the political elite and the rulers must base to promote the
interests and the national consciousness as a frame of refference them, not the
interests and awareness primodialisme such as race, religion, or interest group
and personal. During these three elements are not going well, do not expect the
economic recovery to be successful. Like a circle, national development
(pembang unan-economic) and lead connection is always associated with
stabi-litas national, political institutionalization, and political
participation that must be run in an integrated manner. If there is no harmony
and integration of the Indonesian effort to get out of the crisis is like a vicious
circle that is filled with illusions.
Bibliography
Research Team Faculty of Social and Political Sciences,
University of Airlangga, "Review of Economic IMF Aid Package: Study on
Benefits of Foreign Assistance in the Context of the Economic Crisis
Recovery," Research Report, 2000.
World Bank, Indonesia: Sustaining High Growth with Equity
(Washington DC: World Bank, 1997).
Djiwandono, J Soedradjat,
Java Post, "The Other Side Currencies Drop",
Editorial, December 5, 1997.
Mohamad, Dato Seri Dr. Mahathir, "Speech for"
The International Conference on Managing the Financial Crisis: Lessons and
Challenges ", 2 November 1998.
Journal of Transformative Social Sciences,
"Introductory Discourse", No. 3, 1999.
Ismawan, Indra, 'Assistance Fund and Economic Reform',
Media Indonesia, 3 November 1997.
Voice Reform, 'Crisis It Enters Phase Recovery', 2
November 1997.
Compass, "Asian Economic Recovery Doubtful",
October 10, 1998
Indonesian Economy
Indonesian From Wikipedia, the free encyclopedia
Indonesian Economy
Jakarta Skyline Part 2.jpg
Jakarta, Indonesia's financial capital.
rating 15
Rupiah (IDR)
Fiscal Year Calendar Year
Trade Organizations APEC, WTO, G-20, IOR-ARC
statistics
$ 1.0 trillion of GDP PPP (2010)
GDP growth of 6.17% (as of Q3 2012) [1]
GDP per capita $ 4,700 (2011 forecast)
GDP by sector agriculture: 15.3% industry: 47% services:
37.6% (2010 est)
Inflation (CPI) of 5.1% (2010)
Population
below the poverty line 13.3% (2010)
Gini coefficient of 34.3 (2008) [2]
Labour force 116.5 million (est. 2010)
Labour force
by occupation agriculture: 38.3% industry: 12.8%
services: 48.9% (2010 est).
Unemployment 6.56% (2011 est).
The main industries of oil and natural gas, textiles,
apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food,
tourism
Ease of doing business ranking 129 [3]
external
Exports of $ 208 billion (a perk. 2011) [4]
Exports of goods of oil and gas, power tools, plywood,
textiles, rubber
Japan's main exports colleagues 16.3%, China 9.9%, United
States 9.1%, Singapore 8.7%, South Korea 8%, India 6.3%, Malaysia 5.9% (2010)
Imports of $ 127.4 billion (a perk. 2010)
Import goods machinery and equipment, chemicals, fuels,
foodstuffs
China's main imports colleagues 15.1%, Singapore 14.9%,
Japan 12.5%, USA 6.9%, Malaysia 6.4%, South Korea 5.7%, Thailand 5.5% (2010)
[4]
Foreign gross debt $ 223 billion (a perk. June 30, 2011)
public financing
Public debt 24.5% of GDP (a perk. 2011)
Income of $ 119.5 billion (a perk. 2011)
Burden of $ 132.9 billion (a perk. 2011)
Debt rating Standard & Poor's: [5]
BB + (Domestic)
BB + (Foreign)
BBB (T & C Assessment)
Outlook: Positive [6]
Moody's: [6]
Baa3
Outlook: Stable
Fitch: [6]
BBB
Outlook: Positive
Foreign exchange reserves $ 110.30 billion (October 2012)
[7]
The main data source: CIA World Fact Book
Indonesia has a market-based economy in which the
government plays an important role. The government has more than 164
state-owned enterprises and sets the price of some basic goods, including fuel,
rice, and electricity. After the Asian financial crisis that began in mid-1997,
the government is keeping a lot of the portion of private sector assets through
the acquisition of bank loans and corporate assets are not going through the
process of debt restructuring.
Contents
Background
Post-Independence Period (1945-1950) [edit | edit source]
Financial state of the economy in the early days of
independence is very bad, among other things caused by:
Inflation is very high
Due to the release of more than one currency
uncontrollably. At the moment it is estimated that the Japanese currency in circulation
amounted to 4 billion. Of these, which is circulated in Java alone, estimated
at 1.6 billion. The amount was then increased when the Allied forces managed to
occupy several major cities in Indonesia and control banks.
From the banks of Allied circulate money reserves of 2.3
billion for the purposes of their operation. Groups of people who suffer most
from inflation are farmers. This was due to the Japanese occupation of farmers
is most manufacturers keep the Japanese currency. At that time, the Indonesian
government temporarily declared three currencies applicable in the territory of
the Republic of Indonesia, namely De Javasche Bank's currency, the currency of
the Netherlands East Indies, and the Japanese occupation currency. Then on
March 6, 1946, Commander AFNEI (Allied Forces Netherlands East Indies for /
allied forces) announced the entry into force of the NICA money in areas
controlled by allies. In October 1946, the Indonesian government also issued
new banknotes, the ORI (Oeang Republic of Indonesia) as a substitute for the
Japanese. Based on monetary theory, much the money supply affects the price
level increase.
At the time of economic hardship and choke the nation of
Indonesia, dated March 6, 1946, the new AFNEI Commander, Lieutenant General Sir
Montagu Stopford announced the entry into force of the NICA money in the
occupied areas of the Allies. NICA money is intended as a substitute for the
Japanese whose value has been very down. Government through the Prime Minister
Syahrir processes such action. Because it means that the Allies had broken the
agreement that has been agreed upon, ie, as long as there is no political
solution regarding the status of Indonesia, there will be no new currency.
Therefore in October 1946 the Government of Indonesia,
also do the same thing in issuing new banknotes which Oeang Republic of
Indonesia (ORI) as a substitute for the Japanese. To carry out the maintenance
of the coordination in the field of economics and finance, the government
established the State Bank Indonesia on November 1, 1946 the State Bank was
originally the Central Bank Foundation which was established in July 1946 and
led by Tanuwijaya Djojohadikusomo. State Bank is responsible for managing the
exchange rate with a foreign currency ORI.
The existence of economic blockade by the Netherlands
from November 1945 to close the door RI foreign trade.
The naval blockade began in November 1945, closed the
door and out of the trade RI. The reason for this blockade the Dutch government
is:
To prevent the inclusion of weapons and military
equipment to Indonesia;
Preventing the release of the results of the Dutch-owned
plantations and other foreign-owned;
Protecting Indonesian nation from acts committed by
non-Indonesian.
Empty state coffers.
Large-scale exploitation in the colonial period.
Farmland damaged
Labor used romusha
Agricultural land planted with perennials
Attempts were made to overcome economic difficulties,
among others:
National Loan Program implemented by the finance minister
Ir. Surachman with the approval of BP-KNIP, conducted in July 1946.
Attempt to break the blockade with rice diplomacy to
India weighing 500000 tons, mangadakan contact with the American private
enterprise, and blockade the Dutch in Sumatra, with the aim to Singapore and
Malaysia.
Economic conference in February 1946 with the aim to
obtain unanimity in tackling economic problems are urgent, namely: the problem
of production and distribution of food, clothing issues, as well as the status
and administration of estates.
Formation Planning Board (Board Designer Economics)
January 19, 1947
Reconstruction and Rationalization of the Armed Forces
(Rera) 1948 is to divert former army personnel into productive fields.
On January 19, 1947 Planing formed Board (the agency in
charge of economic designers to create economic development plan period of two
to three years). Then IJ Kasimo as minister of the People's Food Supply
produces a five-year production plan known as Plan Kasimo, whose contents
Increase the nurseries and high-yielding rice
Prevention of farm animal slaughter
Replanting vacant land
Transfer of population (transmigration) 20 million people
from Java to Sumatra in a period of 1-15 years.
Guided Democracy [edit | edit source]
Indonesian economic life up to 1959 has not worked well
and the challenges confronting severe enough. Government efforts to improve the
economic conditions are as follows.
Scissors Syfruddin [edit | edit source]
This policy is cutting the value of money (sanering). The
trick to cut all the money worth Rp. 2.50 upwards until the value in half. This
policy is done by the Finance Minister in the reign Syfruddin Prawiranegara
RIS. This action took place on March 20, 1950 based on the Decree of the
Minister of Public Works No. 1 dated March 19, 1950 The goal is to address the
budget deficit of Rp. 5.1 Billion.
The impact of small people who have not harmed because
the money Rp. 2.50 up only the middle-class and upper class. With this policy
can reduce the amount of money in circulation and the government won the trust
of the Dutch government to get a loan of Rp. 200 million.
Movement Economics Systems Fortress [edit | edit source]
Movement Fortress economic system is the Indonesian
government's efforts to change the skewed economic structure implemented during
Natsir Cabinet planned by Sumitro Djojohadikusomo (trade minister). The program
aims to transform the colonial economic structure into the structure of the
national economy (economic development of Indonesia). The program is:
Foster the entrepreneurial class among the Indonesian
people.
Indonesian entrepreneurs who cashed the weak should be
given opportunities to participate in national economic development.
Indonesian entrepreneurs who cashed the weak need to be
guided and given credit assistance.
Indigenous entrepreneurs are expected to be gradually
developed into advanced.
The idea is outlined in the program Sumitro Natsir
cabinet and Movement Program began in April 1950 Fortress result for 3 years (1950-1953)
of approximately 700 companies of Indonesia accept credit assistance from this
program. But the purpose of this program can not be achieved with good despite
the greater financial burden on government. The failure of this program is
because:
Indigenous entrepreneurs can not compete with
non-indigenous entrepreneurs in the framework of a liberal economic system.
Indigenous entrepreneurs have tended consumptive
mentality.
Indigenous entrepreneurs are very dependent on the
government.
The lack of independent entrepreneurs to develop their
business.
The employers want to quickly get a big advantage and
enjoy a luxurious lifestyle.
The employers abusing the policy by seeking quick profits
from the credits they earn.
The impact of this program is to be one source of
financial deficits. Load expenditure budget deficit in 1952 as much as 3
billion dollars plus the remainder of the previous year's budget deficit of 1.7
billion dollars. So the finance minister Jusuf Wibisono provide credit
assistance to entrepreneurs and traders in particular from the economically
weak national so there are indigenous entrepreneurs as producers can save
foreign exchange by reducing the volume of imports.
De Javasche Bank Nationalization [edit | edit source]
With the increasing sense of nationalism at the end of
1951, the Indonesian government nationalized De Javasche Bank to Bank
Indonesia. Initially there are rules that must be consulted regarding the
provision of credit to the Dutch government. This hampers the government in
running the economy and monetary policy. The goal is to raise and lower the
cost of export revenues, and make savings drastically. Changes in the
nationalization of De Javasche Bank to Bank Indonesia, the central bank and the
bank circulation was announced on December 15, 1951 under Law No. 24, 1951.
Economic System Ali-Baba [edit | edit source]
Ali-Baba economic system initiated by Iskaq
Tjokrohadisurjo (cabinet economy minister Ali I). The purpose of this program
is:
To promote indigenous entrepreneurs.
In order to promote indigenous entrepreneurs collaborate
national economy.
Growth and development of the national indigenous private
entrepreneurs in order to remodel the colonial economy into the national
economy.
Advancing the Indonesian economy demands cooperation
between indigenous and non-indigenous entrepreneurs.
Ali described as an indigenous entrepreneurs while Baba
was described as non-indigenous entrepreneurs in particular China. With the
implementation of the policy of Ali-Baba, indigenous entrepreneurs are required
to provide exercises and responsibilities to personnel of the Indonesian nation
in order to occupy staff positions. The government provides credits and
licenses for private businesses nationwide. The government provides protection
to be able to compete with foreign companies that exist. This program can not
run properly because:
Indigenous entrepreneurs lack the experience that only
used as a tool to obtain credit from government assistance. While
non-indigenous entrepreneurs are more experienced in obtaining credit
assistance.
Indonesia applies Liberal system so prefers free
competition.
Indigenous entrepreneurs have not been able to compete in
a free market.
Competition Financial Economics (Finek) [edit | edit
source]
At the time of Burhanuddin Harahap Cabinet sent a
delegation to Geneva to negotiate the financial-economic issues between the
Indonesia and the Netherlands. The mission is led by Anak Agung Gde Agung. On
January 7, 1956 reached agreement Finek approval plan, which contains:
Approval Finek results RTC disbanded.
Finek Indonesian-Dutch relations are based on bilateral
relations.
Finek relationship is based on national legislation,
should not be bound by any agreement between the two parties.
The result is the Dutch government refused to sign, so
that Indonesia take steps unilaterally. Dated February 13, 1956 the Cabinet of
Burhanuddin Harahap perform dissolution Indonesian-Dutch Union unilaterally.
The goal is to break away from attachment to the Dutch economy. Thus, dated May
3, 1956, President Sukarno eventually signed into law RTC cancellation. The
impact is much Dutch businessman who sold his company, while the indigenous
entrepreneurs have not been able to take over the Dutch company.
Five-Year Development Plan (RPLT) [edit | edit source]
Working lives liberal cabinet in a very short period and
successive programs raises political and economic instability that led to the
economic downturn, inflation, and the slow pace of implementation of
development.
The program conducted generally a short-term program, but
at the Ali cabinet Sastroamijoyo II, government formed the National Development
Planning Agency called the State Bureau Designer. Its tasks to design long-term
development. Ir. Juanda was appointed as minister of national designers. The
Bureau is managed Five-Year Development Plan (RPLT) are scheduled to be held
between the years 1956-1961 and approved by the House on November 11, 1957 1958
goals and priorities RPLT changed through National Development Conference (the
Conference). Financing RPLT estimated 12.5 billion dollars.
RPLT can not run properly due to:
Economic depression in the United States and Western
Europe in late 1957 and early 1958 resulted in exports and slumping state
revenues.
West Irian liberation struggle with the nationalized
Dutch companies in Indonesia caused the economic turmoil.
The tensions between the center and regions so that many
areas are implementing economic policies respectively.
National Development Conference [edit | edit source]
Juanda cabinet period of tension between central and
local relations. The problem can be temporarily resolved by the National
Development Musayawaraah (the Conference). The aim of the Conference is to change
the development plan in order to produced a comprehensive development plan for
the long term. But still, the development plan can not be implemented properly
due to:
The difficulty in determining priorities.
Political tensions that can not be mitigated.
Arise PRRI / Permesta.
It requires huge cost to quell the rebellion PRRI /
Permesta thus increasing the deficit Indonesia. Mounting political tensions
between Indonesia and the Netherlands concerning West New Guinea problem
achieving an armed confrontation.
New Order [edit | edit source]
For more than 30 years of the New Order government of
President Suharto, Indonesia's economic growth of GDP per capita of $ 70 to
more than $ 1,000 in 1996 through monetary policy and tight finances, inflation
was held for about 5% -10%, dollars stable and predictable, and government
introduced a system of balanced budget. Many of the development budget is
financed through foreign aid.
In the mid-1980s the government began to remove barriers
to economic activity. This step is aimed primarily at the external and
financial sector and is designed to boost employment and growth in the field of
non-oil exports. Annual real GDP grew an average of nearly 7% from 1987 to
1997, and most analysts recognized Indonesia as a major industrial economy and
a growing market.
High economic growth rate from 1987-1997 covering several
structural weaknesses in the Indonesian economy. Legal system is very weak, and
there is no effective way to enforce contracts, collect debts, or sue for bankruptcy.
Bank activity is very simple, with the borrowing-Based "collateral"
cause expansion and rule violations, including borrowing limit. Non-tariff
barriers, by leasing state-owned enterprises, domestic subsidies, barriers to
domestic trade and export barriers created entirely economic disruption.
Southeast Asian financial crisis that hit Indonesia in
late 1997 quickly turned into a political and economic crisis. Indonesia's
first response to this problem is to raise the level of domestic interest rates
to control rising inflation and a weakening of the exchange rate, and fiscal
policy tightening. In October 1997, Indonesia and the International Monetary
Fund (IMF) reached agreement on an economic reform program aimed at stabilizing
the macro economy and the elimination of some of the economic policies that
assessed damage, among others, the National Automotive Program and monopoly,
involving family members of President Soeharto. Dollar remains stable over a
long time, until the end of President Suharto was forced to resign in May 1998.
Post-Suharto [edit | edit source]
In August 1998, Indonesia and the IMF approved a loan
program under President BJ Habibie. President Wahid, who was elected president
in October 1999 and then to extend the program.
In 2010 Indonesian economy is very stable and is growing
rapidly. GDP can be sure melebihin Rp 6300 trillion [8] increased more than 100
times higher than GDP in 1980 after India and China, Indonesia is the country
with the fastest growing economy among the 20 countries members of the world's
largest economies Industries G20.
This is a chart of GDP (Gross Domestic Product) of
Indonesia from year to year [9] by the IMF in the millions of dollars.
GDP% growth year / year
(compound interest)
1980 60,143.191
1985 112,969.792 13.5
1990 233,013.290 15.5
1995 502,249.558 16.6
2000 1,389,769.700 22.6
2005 2,678,664.096 14.0
2010 6,422,918.230 19.1
Note: The above data is presented in dollars, therefore
the apparently rapid growth was strongly influenced by the weakening of the
rupiah against a more stable currency, such as Euro. Real growth, for example,
purchasing power will be much smaller, perhaps even negative.
Public Expenditure [edit | edit source]
Since the Asian financial crisis in the late 1990s, which
has contributed to the fall of the Suharto regime in May 1998, Indonesia's
public finances have undergone a major transformation. The financial crisis is
causing massive economic contraction and decline in public spending in line.
Not surprisingly, debt and subsidies increased dramatically, while construction
spending is sharply reduced.
Today, a decade later, Indonesia has come out of the
crisis and are in a situation where once again the country has sufficient
financial resources to meet development needs. These changes occur because of
macroeconomic policy carefully, and most importantly a very low budget deficit.
Also the way the government spends the funds have been transformed through
"big changes" decentralization in 2001 which led to more than a third
of total government expenditure switching to local government in 2006 Equally
important, in 2005, international oil prices continue to rise cause Indonesian
domestic oil subsidies could not be controlled, threatening macroeconomic
stability that has been painstakingly achieved. Although there is a political
risk that the high oil price hike will push inflation rate becomes larger, the
government took the bold decision to cut fuel subsidies.
The decision was given $ 10 billion [1] In addition to
the expenditure for development programs. Meanwhile, in 2006 an additional $ 5
billion [2] has been available thanks to a combination of increased revenues
driven by steady economic growth and a reduction in overall debt payments, the
rest of the economic crisis. This means that in 2006 the government has $ 15
billion [3] extra to spend on development programs. This country has not
experienced a 'fiscal space' since such a large increase in income experienced
when there was a surge of oil in the mid 1970s. However, the main difference is
the huge increase in oil revenues in the 1970s merely an unexpected financial
fortune. In contrast, the current fiscal space achieved as a direct result of
government policy decisions to be careful and precise.
However, while Indonesia has gained remarkable progress
in providing financial resources to meet the needs of development, and the
situation is prepared to continue in the coming years, the subsidy remains a
major burden on the government budget. Although there is a reduction in
subsidies in 2005, the total subsidy is about $ 10 billion [4] of government
spending in 2006, or 15 percent of the total budget.
Thanks to the Habibie government's decision (May 1998 -
August 2001) to decentralize authority to local governments in 2001, a large
part of the increase in government spending channeled through local
governments. The result of provincial and district governments in Indonesia now
spend 37 percent [5] of the total public funds, which reflects the degree of
fiscal decentralization which is even higher than the OECD average.
With the level of decentralization in Indonesia today and
is now available fiscal space, the government of Indonesia has a unique
opportunity to improve neglected public services. If managed carefully, it will
allow lagging regions in eastern Indonesia to pursue other areas in Indonesia
are more advanced in terms of social indicators. It also allows the people of
Indonesia to focus on the next generation in making changes, such as improving
the quality of public services and the provision of infrastructure such as
targeted. Therefore, the proper allocation of public funds and careful
management of the funds allocated by the time they have become a major issue
for public spending in Indonesia in the future.
For example, while education spending has reached 17.2
percent [6] of the total public-expenditure get highest allocation compared to
other sectors and take around 3.9 percent [7] of GDP in 2006, compared with
only 2.0 per cent of GDP in 2001 [8 ] - otherwise the total public health
expenditure is still below the 1.0 percent of GDP [9]. Meanwhile, investment in
public infrastructure is still not fully recovered from the post-crisis lows
and are still at the level of 3.4 percent of GDP [10]. Another area of concern
at this time is the level of expenditures for administrative unusually high.
Reached 15 percent in 2006 [11], showed a significant wastage of public
resources.
Monday, December 21, 1998
FINAL REPORT OF ECONOMIC
Economic Crisis of 1998, not Forgotten Tragedy
EDITORIAL INTRODUCTION
"MIRACLE lost". That is the most appropriate
term given to the Indonesian economy during the year 1998 After decades lulled
by such amazing growth, in 1998 the Indonesian economy contracted so great. The
final report will reveal all the economy's problems and tries to describe the
circumstances for the coming year. The report will be poured two consecutive
days, Monday (21/12) and Tuesday, in the MAIN Rubrics and Rubric OPINION. All
written by economics journalist Compass, Andi Suruji, Banu Astono, Smith
Muhtadi, Ferry Irwanto, Ninuk M Pambudy, Pieter P Gero, Simon Saragih, Sri
Hartati Samhadi, Fertile Tjahjono, Tjahja Gunawan, Joseph Umar Hadi, and Yovita
Arika.
IN 1998 a witness to the tragedy of the nation's economy.
Lasts a very tragic situation and recorded as the darkest period in the history
of the Indonesian economy. Perhaps he will always be remembered, as we always
remember black Tuesday that marked the beginning of the world economic
recession dated October 29, 1929 which is also referred to as the malaise.
In just one year, dramatic changes occur. Economic
performance achieved in two decades, sinking away. He also simultaneously
reverse all the beautiful shadows and bright meet in front of the eyes of the
third millennium.
During the first nine months of 1998, no doubt the most
frenzied periods in the economy. The crisis that has been running six months
during 1997, growing at a brisk pace is getting worse. The impact of the crisis
began to be felt significantly by community, business world.
International Monetary Fund (IMF) began to intervene
since October 1997, but proved unable to immediately improve the economic stability
and dollars. Even such a situation out of control, like a kite that broke the
rope. Indonesian economic crisis even listed as the worst in Southeast Asia.
Like a snowball effect, which is initially only crisis
originated from the baht exchange rate crisis in Thailand July 2, 1997, in 1998
quickly developed into the economic crisis, social crisis and then continue
again into a political crisis.
Finally, he is also evolving into a total meltdown that
crippled almost all aspects of national life. Tell me, what sectors in this
country that does not waver. Even the chair or throne of former President
Soeharto was wobble, and eventually he left. Maybe Suharto, for the rest of his
life would condemn baht devaluation, which triggers all that.
Snowball effect
Factors that accelerate this snowball effect is rapid
evaporation of the public trust, deteriorating health condition of President
Suharto entered in 1998, the succession uncertainty, the government dithered in
making policy, the amount of foreign debt that is due soon, the international
trade situation is less profitable, and natural disasters La Nina that brought
the worst drought in 50 years.
Of the total external debt as of March 1998 reached 138
billion dollars, about 72.5 billion dollars of private debt which is two-thirds
the short term, in which about 20 billion will mature in 1998 while at the time
the backup foreign live about 14.44 billion dollars.
Decline of confidence to the point of zero makes rupiah
closed at Rp 4,850 / dollar in 1997, slid rapidly to a level of about USD
17,000 / dollar on January 22, 1998, or depreciated more than 80 percent since
the currency floated August 14, 1997 .
Dollar is floated, due to increased demand for the dollar
in addition to paying the debt, as well as a reaction to the draft budget
figures 1998/1999 which was announced January 6, 1998 and is considered not
realistic.
The crisis that open sores fragility of this economic
fundamentals quickly penetrated into all sectors. Dramatic drop in the rupiah,
causing money markets and capital markets are also falling, national banks in
big trouble and international ratings of major banks and even government debt
continued to decline to a level below junk or become litter.
Dozens, even hundreds of companies, ranging from small
scale to conglomerates, collapsed. About 70 percent of companies listed on the
capital market is also insolvent or bankrupt postscript.
Sector was the hardest hit, especially the construction
sector, manufacturing, and banking, so the big waves spawned layoffs (layoffs).
Unemployment soared to levels not seen since the late 1960s, about 20 million
people, or 20 percent more of the workforce.
As a result of layoffs and rising prices quickly, the
number of people below the poverty line also increased to about 50 percent of
the total population. While the rich busy invade groceries stores in the
extraordinary atmosphere of panic, worried that prices will continue to soar.
The per capita income reached 1,155 dollars / capita in
1996 and 1088 dollars / capita in 1997, reduced to 610 dollars / capita in
1998, and two of the three residents of Indonesia called the International
Labor Organization (ILO) in very poor condition in 1999 if the economy not be
improved.
Central Bureau of Statistics also showed that the economy
still recorded a positive growth of 3.4 percent in the third quarter of 1997
and zero percent last quarter of 1997, continued to shrink sharply to a
contraction of 7.9 percent in the first quarter of 1998, 16.5 percent of second
quarter 1998 , and 17.9 percent in the third quarter 1998 Similarly, the rate
of inflation up to August 1998 has been 54.54 per cent, the inflation rate reached
12.67 percent in February.
In capital markets, the Jakarta Composite Index (JCI)
Jakarta Stock Exchange (JSX) fell to the lowest point, 292.12 points, on 15
September 1998, of 467.339 at the beginning of the crisis 1 July 1997 While the
market capitalization shrank dramatically from $ 226 trillion to Rp 196
trillion in early July 1998.
On the currency markets, raising the interest rate of
Bank Indonesia Certificates (SBI) to 70.8 percent and Money Market Securities
(SBPU) to 60 percent in July 1998 (from 10.87 percent, respectively, and 14.75
percent at the beginning of the crisis) , causing difficulty mounting bank.
Negative spread of banking experience and was able to function as a supplier of
funds to the real sector.
On the other hand, the export sector is expected to be a
lifesaver in the middle of a crisis, the decline was the same and was able to
use the momentum of the depreciation of the rupiah, due to the debt burden,
heavy reliance on imported components, trade financing difficulties, and fierce
competition in the global market.
During the period from January to June, 1998, oil and gas
exports dropped about 34.1 percent compared to the same period of 1997, while
non-oil exports grew only 5.36 percent.
anomaly
This created a crisis of confidence anomalous conditions
and make monetary instruments not able to work to stabilize the rupiah and the
economy. While on the other hand, the fiscal sector, which is expected to be
the economic driver, is also under pressure due to reflux acceptance.
Situation continues to deteriorate rapidly create such
government lost direction and orientation in handling the crisis. In the midst
of a faltering position, Suharto had conveyed the concept of "IMF
Plus", the IMF plus CBS (Currency Board System) in front of the Assembly,
before the idea was abandoned altogether March 20, because obtaining objections
here and there even could raise tensions with IMF, and the IMF had suspended
its aid.
CBS abandonment plan and the government's promise to
return to the IMF program, making the support of the IMF and the international
flow again. On 4 April 1998, the three signed a Letter of Intent. However
kelimbungan Suharto, has had to eliminate a variety of momentum or opportunity
to prevent the ongoing crisis.
Even trigger adrenali society, which is fairly quiet
before becoming violent. Popular anger over the government's inaction in the
midst of crisis control prices continue to soar and a wave of layoffs, soon
turned into protests, riots and bloody clashes in the capital and other areas,
which led to the fall of Suharto on May 21, 1998.
This tragedy triggered capital flight in the scale that
is touted to reach 20 billion dollars, a wave of entrepreneurs leave
descendants, damage to the national distribution network, cutting off foreign
funding, and the suspension of many foreign investment plans in Indonesia.
The emergence of a new government that has no legitimacy,
and more busy with maneuvers to win the hearts of the people, not help the
situation much. Worsening economic conditions, social, political and quickly
this continued at least until the second quarter, the third quarter of 1998
even Thus, we have witnessed the worst episode of the economy during the year
1998 *
FINAL REPORT OF ECONOMIC
Bankrupt Banks Era
INDUSTRIAL banking during 1998 so the frenzy. Long lines
greet customers banking industry beginning in 1998 They really have put trust
in the bank under the sole of the foot. Action regardless of the panic
liquidation customer, to be the beginning of all the banking tempest.
Fortunately, there is no guarantee on customer deposits,
government issued early 1998 as well. Difficulty banking on the one hand can be
helped because customers no longer have to dicecer panic. Nevertheless, it is
still not able to guarantee an end to the banking crisis that has developed
into chronic.
In addition to the legacy of past disease, there are some
characters who massacred the banking industry during the year 1998 is the
legacy of the first customers resulting panic funding sources empty. Bank
Indonesia is to inject liquidity in the form of BLBI. However, the imposition
of interest rates BLBI, has also made the owners face a growing burden.
There is another factor that characterizes other, the
loan interest rate higher than the interest rate customer deposits. The result
is a negative spread. Increasing burden bankers alone. That said, the banks
we've lived buildings without contents.
The economic recession has thrown all loans disbursed
into the trash. Ideally, the owners of the banks themselves have to inject
capital to give spirit to the bank. However, it can not be done. Bank owners
also bankrupt, because the loans extended to the group itself, entangled bad
credit.
In addition, most of the credit has largely evaporated
and became the owner of the bank deposits that exist in the international
banking system. Fears of a business that is not convenient in Indonesia, has
made them run.
As a result, it had to bear all the burden on the banks.
De facto, a national banking majority owner is the government, through Bank
Indonesia. Even most of the shares of private banks has been gripped by the
National Bank Restructuring Agency (IBRA).
However, Bank Indonesia's takeover of the shares of
national banks, also did not solve the problem. Ideally, as in many countries,
the government became a majority helper banking difficulties.
But the government was now like a helter-skelter,
suddenly faced with the burden of ulcers caused by sweeping the banking
industry. Ulcers, it is clearly seen in the majority of banks ranked category B
(capital has become negative 25 percent of the assets) and C (negative capital
already below 25 percent) of the assets.
The government is planning a recapitalization with the
issuance of bonds. It is estimated that there will be Rp 257 trillion to inject
banking capital. However, the figure was considered too moderate, far from
adequate. Nonperforming loans the bank itself had reached more than Rp 300
trillion. However, the rate of Rp 257 trillion, it is also not easy to fulfill.
**
BEFORE recapitalization plan, there are a number of
policies issued by the government for healthy banks. Ironically, the policy was
issued-for-like banking healthy children playing rope. Tug almost always
coloring government policy on banking.
Policies in finance and banking are often revised. Take
for example, the pattern refund Bank Indonesia Liquidity Assistance (BLBI)
changing. Previous government set the deadline a BLBI for five years, and then
changed again to one year.
Until finally after going through the kinds of debate,
the government set a deadline of four years for the old owner of a majority
stake frozen bank operations (BBO) and the banks take over (BTO) to complete
its obligations. However, government policy-plintut plintat could confuse
market participants and reduce public confidence in the banking world.
So, do not be surprised if people are confused. Actually
confusion and panic in the society indirectly created by the government through
policies that are not intact. Upon return policy BLBI already somewhat bright
and clear, now appears recapitalization program (additional capital) banks that
are part of the national bank restructuring policies.
Policies to be implemented even then, not clarify the
government's policy direction to be taken in the banking world. With the
government's bank recapitalization banking obsessed create a healthy and strong
and able to compete in the global market.
***
In the middle of the confusion, we asked. How healthy
banking. Until now it is still a big question? Thus, in 1999, the banking
industry can not be expected to operate as normal. They have not been quite
able to disburse loans.
Even if there were able to operate normally, it's just
foreign banks or mixed, or private banks that had been careful enough to
distribute the funds. However, the number of banks that can act as only the
number of fingers.
Then how prospective national banks? Until now, no one
can give any conclusive answers. Various circles, both domestic and
international in various seminars, also very confused look banking endemic
disease. 1999, will still be continued with the question how to solve a number
of banks.
But clearly, a liquidation is inevitable. It is part of
the banking reform, which is to say, is still a step summary. Thus, observing
the banking industry throughout 1999 is something to look forward to.
Actually there is the most urgent thing that seems to
have no correlation, but to nourish the banking industry, it is absolutely
necessary. As we know, the world is already integrated, the role of capital
flows has become a buffer the economy, and the banking of the country as well.
The capital flows, including those in the category of
portfolio investment-shaped stocks or bonds in other money market products.
Other capital flows, is also known as foreign direct investment (FDI flows).
For the Asia Pacific region, including Indonesia, it is
already happening. But the uniqueness of Indonesia, can not immediately reverse
the capital outflow became capital inflows. South Korea and Thailand, is the
country's most accurate and astute, and realize the importance of the return of
capital inflows.
For Indonesia, although seen as attractive, but the
bloody riots have led investors to enter Indonesia horrified. Let alone for
berbinis, for a visit, they were too reluctant. Therefore, political
tranquility, is an absolute thing that should be listened to authority.
FINAL REPORT OF ECONOMIC
Economic Recovery Depends Completion Agenda Politics
IMPLEMENTATION political agenda in a safe, smooth,
orderly and in accordance with the aspirations of the majority of the people is
a must, if desired economy will soon recover. Conversely, when social unrest
continues to rise and the election can not be implemented, it is difficult to
expect the economic recovery in quick time.
Admiral Sukardi rate, economic conditions in 1999 are in
a critical situation. This means that the national economy is at a crossroads
between possibility of recovery and destruction. The chances are fifty-fifty.
Investors were waiting, whether the election will be free
and fair, and democratic. Secondly it is a prerequisite for the formation of a
government of the people can be trusted. If so, then the Indonesian economy
will recover quickly, because investors will definitely come back to Indonesia.
Therefore, the desire of all the people of Indonesia who
wanted the elections be fair, equitable, transparent, and democratic to be
actually implemented and can not be negotiable. According to him, foreign
capital inflows as the best way in economic recovery can only happen if there
is good governance, supported by the people, the certainty of law and an
independent judiciary.
A successful election and the General Assembly in 1999
does not necessarily happen. From this time to be prepared. But the shadow of
the failure is still raging, given the intensity of the violence and the
incidence of robbery and looting that make people feel unsafe are still common.
***
SEE important factor of political settlement, the plan is
very important national dialogue performances. Through the national dialogue,
expected figures involved the perception that the election should be made and
appropriate aspirations of the people.
We both wanted, democratic government and supported by
the people. The government now dare to admit, that he is just preparing for the
transition and the next administration. Conversely national figures must also
dare to acknowledge the current administration.
In addition to political issues, economic sectors,
especially monetary reform is also very important, when we expect the economic
recovery. Two fundamental problems that must be solved, namely the
restructuring of the banking and foreign debt.
First, bank restructuring should be managed.
Recapitalization plan likely will not succeed. Therefore, the government must
have the courage to do the closure of banks that are not solvent, thus only a
few banks are strong and professional.
Before addressing private banking, state-owned banks
should also be completed. If the banks issue is not resolved, then there will
be no economic activity, because there is no work and trade Kodal.
Secondly, the issue of government debt and private. How
much foreign debt problem can be solved. Therefore, an end to the banking
crisis of international confidence in the government depends on the settlement
of the debt. When the default, then the credibility down and investors are
reluctant to enter Indonesia.
Chairman of the Indonesian Young Entrepreneurs
Association, Haryadi B Sukamdani say, as a businessman it is to be optimistic.
But if you look at the field, especially political developments there, then
there is only a sense of anxious and nervous. Because the election is still far
away, but the intensity of violence is quite high, especially later when
approaching and election campaigns.
Therefore, the attitude of the employers in this 1999 is
definitely going to wait. Investments will not be there. Happens, the employers
only increase the volume and sales of existing ones. Employers may not rely on
the domestic market, but overseas.
If either political settlement, the community supports
the new government, the economy would quickly return. Of particular concern is
that the social turmoil caused by the failure of elections that do not
accommodate the aspirations of the people.
With such considerations, businesses see the condition of
the national economy in 1999 is like a person who was driving the car in the
middle of the "thick fog". Thick fog (socio-political situation-Red)
lead rider (read: employers) can not look far ahead. On the basis of safety
considerations, the driver had no choice but to stop the trip and wait until
the fog was gone. *
FINAL REPORT OF ECONOMIC
Dollar and Stocks, Snaking Like a Snake
kurs1.JPG (17016 bytes)
RP did not want to miss the red ink has been incised in
economic history. Stock markets were the case, volatile and if drawn to look
like a snake snaking. Still remember when the exchange rate is almost reaching
Rp 17,000 per dollar on June 17, 1998?
Once Suharto declared himself resigned as president of
the 2nd RI on May 21, 1998-that the market wants and is expected to stem the
tide of dollars-not also help. Dollar still around Rp 11,000 per dollar. The
tendency of weakening rupiah market, continued to worsen since the Trisakti
shootings May 12 and May 14 looting in Jakarta.
It was followed by a wave of unrest and political action
that seemed endless after the resignation of Suharto. Rallied on the rupiah
reached his gong, after the Japanese yen depreciated sharply June 12 1998
rupiah plummeted further to Rp 17,000, the lowest level during its history.
Economic conditions that have contracted to minus 13 per
cent, high inflation, soaring interest rates negatively impact firms including
those already listed on the stock. end the banking crisis Composite Stock Price
Index (CSPI) Jakarta Stock Exchange (JSE) in September and finally reaches the
lowest point of 254 points.
Towards the close of 1998, the stock index rose slightly
to tread beyond the level of 400 points. Interest rates began to decline due to
inflation under control and speculation on the foreign exchange began to
subside helped. A similar thing happened dollars which tend to have improved
since last September and has continued to stand at the level of Rp 7,000 to Rp
8,000.
***
FOLLOW drive the exchange rate and stock index during
1998 is like a ride down the mountain with steep valleys and gorges. "The
limit is the sky dollars," said an economist Hartojo Wignjowijoto when the
rupiah continued to weaken close to Rp 17,000 in June.
kurs2.jpg (17016 bytes)
The market can not compromise with political
developments. Negative condition is aggravated by global developments such as
the fall of the yen exchange rate.
The rupiah a year ago still move between Rp 4,000 - Rp
5,000 per dollar. Not too "bad" when associated with the current
state of moving between Rp 7,000 - Rp 8,000. However, economic conditions in
the country apparently can no longer be expected to support the currency to
remain stable since Bank Indonesia (BI) to release a range of interventions
August 14, 1997 and closes November 16 private banks.
Political maneuvering exacerbated market confidence in
the Indonesian economy. The presence of vice president BJ Habibie at the time,
making the market believes that the Indonesian economy will remain at a high
cost. The attitude of the government which also tug assistance programs in
reaching an agreement with the International Monetary Fund (IMF) further
complicate the situation.
It is also seen on share prices on the JSE. Having had
soared beyond 700 points in June 1997, the stock index continued to free fall
almost close to 300 points in December and January 1998 Luckily, the government
signed a letter of intent with the IMF on January 15, making the forex and
stock market reacted positively to the improving economy.
The rupiah immediately bounce back to below USD 10,000.
Even have been under Rp 8,000 per dollar in February. Central bank intervention
in the foreign exchange market helped. Revisions to Draft Budget 1998/1999, an
act of the first revision made during this reign, also shows the serious
attitude of government to face the crisis.
In the stock market, stock prices also jumped back. Index
continues to rise above 500 points in February 1998 According to the capital
market observers Jasso Winarto that time, foreign investors began targeting
seed stocks of Indonesia when it was very cheap. Agreement with the IMF also
gave positive sentiment Indonesian economic crisis will soon improve.
***
AS said many observers, the Indonesian financial crisis
turns into an economic crisis has widened. Not only that, the crisis is also
starting to get into politics which has practically become a "taboo
areas". As a result, confidence in the Indonesian economy will slowly but
surely, began to dissipate.
Letter of credit (L / C) from Indonesia is no longer
acceptable to all parties abroad. More frantic again, borrowers abroad urgent
loan recipients in the country to immediately pay its debts. At that time, an
estimated 9.8 billion dollars of short-term private sector debt maturing
Indonesia. As a result, the pressure on the rupiah barrage.
Foreign exchange market and the stock market as has broke
against the Indonesian government. As described above, since it keeps the
exchange rate plummeted to near Rp 17,000 (in Singapore has reached Rp 17,000).
Stock price index has shown a tendency to break the slump of 400 points with a
few times up a little just a small correction.
Starting in June and July 1998, the rupiah exchange rate
reaches lowest, slowly began to improve. Pressure on the rupiah began to
weaken, after some negotiations for the settlement of private sector external
debt reached an agreement in Frankfurt, Germany. The IMF also began to disburse
aid funds. A number of friendly countries also began to bearing support
Indonesia's economic program.
Unfortunately, the pace of recovery is yet to be seen in
the stock market. Stock prices continue to fall. Not infrequently, the price of
shares on the JSE already worth the price of candy. Price of cigarettes or
mineral water far above the price per share. Stock index continued to fall
until September reached its lowest point 254 points.
The question, whether the exchange rate and stock index
is still going to stabilize at this level when entering 1999? Late 1998, the
rupiah and the stock recovered somewhat. However, as noted, the problems faced
by a person or a nation, must start from ourselves settled.
That means, since the government must now can solve all
economic and political problems in the country. Transparent, firmly, clearly,
and quickly needed. Do not even cause confusion and uncertainty.
The Happy Seven Countries of the Global Economic Crisis
One of them is Indonesia, because of the increased
purchasing power of consumers.
ddd
Wednesday, October 17, 2012, 6:32 Denny Armandhanu
A number of apartment buildings in Jakarta A number of
apartment buildings in Jakarta
Follow us on Google+
Headline - the great recession that began in 2007 and
still remains to this day makes many countries almost bankrupt. The major
players of the world economy also affected, their economic growth slowed.
This recession also undermine many major financial
institutions in various countries, banks are forced to disburse bailout
(bailout) and the stock market crash. In some countries, the housing sector
plummeted, businesses close due to falling purchasing power and unemployment
skyrocketed.
Wide superpower United States and China have to bite
their fingers with the economic downturn. European countries have to struggle
to cover their debts, by imposing austerity, led to the misery of the people.
Riots everywhere.
However, in the midst of the global economic profanity,
there are several countries that are still stable, even rising economy. Journal
of political economy and the United States, Foreign Policy, this month
summarizes the seven countries that survived the crisis of 2007, one of which
is recorded in Indonesia. Here is a list of seven countries:
1 South Korea
Progress South Korea amid the global economic crisis is
inseparable from the dream of President Lee Myung-bak to make the country a
class of one. In realizing his dream, Lee improve research, development and
innovation from 3.4 percent to 5 percent with the help of government subsidies.
Noted, some companies such as Samsung, Kia and Hyundai profiting at another
moment down.
South Korea is the first country to rise from recession
in 2009 South Korean society Revenues increased rapidly in the last 11 quarters.
Debt rating agency Fitch in September this year as the South Korean state
establishes a haven for investors.
2 Poland
In the past, Poland is considered as the most promising
countries in eastern Europe, lagging behind the Czech Republic and Slovenia.
However, the European crisis be blessing for Poland. The country's economy rose
15.8 percent in 2008 and 2011, at a time when the European economy fell by
half. This is not another thanks to fiscal policy and financial Poland
brilliant, low debt levels and a broad market for domestic consumers.
Society also contribute to the increase accounted for the
Polish economy. Workers in this country to work longer hours to 500 hours per
year than Germany, with smaller wages. As a result, Poland is the only country
in the EU which is not affected by the worst crisis in 2009.
3. Canada
This year for the first time in history, Canadian society
is richer than the American public. Whereas two decades ago, Canada fall up to
face debt and growth are minimal.
The success of Canada overcome the economic crisis is due
to the savings that they have done since the 1990s. In the midst of a massive
government investment in infrastructure, the prime minister at the time, Paul
Martin, also issued a policy that prohibits banks do risky practices and
endanger other financial institutions.
Economists noted, Canadian revenue increased 15 percent
in the last 10 years. Canada is also a country that is eligible for the 10
places to live.
4. Sweden
When the financial crisis happened to Sweden in 1992, the
government immediately take over some banks. Sweden cut the high taxes from
companies and individuals, and use most of the budget for education and health.
The Swedish government is able to keep their debt low,
around 38 percent of GDP. Sweden is the country with the fastest-growing
economies throughout Europe in 2011 after Estonia. Krona currency values also
continued to exceed the euro.
5. Indonesia
Foreign Policy writes, helped by the Indonesian
government and the confidence of the people are extraordinarily high. As many
as eight percent of the people believe that the country will become the next
superpower. Indonesia also surpassed India as the country with the world's most
optimistic consumers.
Indonesia steady annual growth, 4.5 percent of the
current recession and occupies the second highest growth in the G-20 after
China last year. This growth is due to commodities such as coal, palm oil, and
tin. Indonesia's middle class consumer level also increased rapidly. Car sales
rose 15 percent per year, resulting in more and more automotive companies are
investing. One is the Nissan that increase their production to double, or worth
$ 400 million.
6 Turkey
GDP and per capita income increased to Turkey nearly
tripled amid the crisis in Europe. Turkey is now the largest car producer for
the European market. Call it Honda, Hyundai, Renault, Toyota and Ford opened a
factory in this country.
Turkey's progress is thanks to the government of Prime
Minister Recep Tayyip Erdogan that liberalize investment and tightening regulations
to stem corruption. Turkey also has to restore its role as a bridge between
Europe and the Middle East. Turkey's largest trading partner is Germany, Egypt,
Iran, Iraq and Saudi Arabia.
7 Mexico
Although Mexico known a lot of problems, among them drug
cartel violence that killed more than 50,000 people in the last six, but
economic skyrocketed. Mexico's economic growth surpassed the Brazilian years
ago. More than 700,000 jobs created in this country in 2010, challenging the
dominance of China and the United States as a manufacturer of household
appliances.
Inflation and debt levels Mexico is also very low. For
the first time this year, the rate of migration of Mexicans to the United
States nil, indicating the progress of making people feel at home in their own
country.(Continoe)
No comments:
Post a Comment