No quick fix

Article Abstract:

Devaluation of the Indonesian currency has caused massive inflation and the people are suffering as a result. Jobs are being lost and food prices are rising. The International Monetary Fund (IMF) insists that the government cuts subsidies on sugar and rice but this is likely to cause civil unrest. The Indonesian economy needs to speed up trade finance, introduce banking reforms and discuss debt-regeneration. The IMF is annoyed that President Suharto has been delaying the reforms. Singapore, Japan and the U.S. have promised to honour credit guarantees to boost the economy.

Administration of General Economic Programs, Prices, Foreign Aid-Loans, International Monetary Fund, International relations, Foreign loans, Indonesian foreign relations

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Too hot to handle

Article Abstract:

The riots in Indonesia in May 1998 caused many overseas Chinese to postpone, or withdraw from, their Indonesian investment projects. The general economic situation in Indonesia would deter investment anyway, but the violence directed at Indonesian Chinese angered Chinese people overseas. The withdrawal of investment is important to the Indonesian economy as overseas Chinese have been major investors in Indonesia since 1995. Their investments have been in small-scale, labour-intensive projects which employed a significant percentage of the Indonesian workforce.

Foreign investments, Investments, Cover Story, Chinese, Chinese (Asian people)

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Hankering for a peg

Article Abstract:

Indonesia has come into conflict with the International Monetary Fund (IMF) after having decided to take the advice of Steve Hanke, economic adviser to President Suharto, and implement a currency peg. The IMF believes that a currency peg would not be advisable, given that Indonesia's banks are weak, corporate debt is high and its reserves are low. Hanke does not subscribe to the view that there may be a run on US dollars as soon as a currency board is established. Some observers believe that pegging the rupiah would create further regional instability.

Prices and rates, Monetary policy, Rupiah (Indonesia)

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