President: Indonesia will not see repeat of 1997 crisis

The Jakarta Post   |  Mon, 10/06/2008 8:19 PM  |  Headlines

President Susilo Bambang Yudhoyono said Indonesia would not see a repeat of the financial crisis of 1997, as all the fundamentals looked solid and there was clear potential for domestic market expansion.

Yudhoyono said the U.S.-led global liquidity crisis would affect the country's economy, but urged market players not to panic and to react appropriately.

Speaking to reporters after a special cabinet meeting on Monday at noon, Yudhoyono said his administration had come up with steps to mitigate impacts of the global liquidity crisis on the local economy.

After 10 years of political and economic reforms, Indonesia's economy was back on track -- as shown by continuous economic expansion for the last eight quarters and a significant improvement in debt to GDP ratio, he said.

Yudhoyono urged domestic and foreign business players to make the most of the positive momentum by further developing the domestic market amid the growing crisis, which he said would have a significant impact on demand for Indonesian products.

"Let us exploit our domestic economy. We must expand our domestic market," he said.

One of the key initiatives to boost domestic expansion, he said, would be to increase consumption of domestically produced raw materials and goods and to reduce dependency on imports, so as to maintain a healthy balance of payments.

Yudhoyono said he would issue a special instruction demanding all government departments to focus their expenditure on growth-supporting sectors and to rely on domestic products.

He also planned to issue an incentive-disincentive scheme to promote consumption of domestic products. (and)
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David Young (not verified) — Mon, 10/13/2008 - 10:16pm

I Heard Indover Bank has been seized by Dutch authorities and Government and Bank Indonesia is not doing anything to help Indover bank (although owned by Bank Indonesia). This may lead to lenders not lending to Indonesian banks and companies in future.

Ketti (not verified) — Mon, 10/13/2008 - 10:13am

As a President, Mr. SBY has perfectly given all Indonesian people optimism and spirit to keep courageous in facing the possibilities impact of US's financial crisis towards Indonesia's national economy. Any elements of Indonesian societies especially in private sectors should support his goodwill to strengthen the national economy for mutual interests. President SBY could not work alone without supporting his cabinet ministers and all Indonesian societies. From this, we should have awareness that President SBY need all Indonesian people to support and help him in solving any Indonesia's national problems. Let's support him for our goodness!

Stevam (not verified) — Sat, 10/11/2008 - 11:09am

I hope what Mr.President say is right.. God Bless you SBY&JK

Anthony (not verified) — Fri, 10/10/2008 - 6:45pm

Well, sounds good and I totally agree with you on most aspects Mr. President. Except the part about GDP growth for past 8 , how is that figure derived? The Minimal wage guildline is set by the government. But the proverty ratio seems to be on the increase, and retail business for the pass 3 years is getting more and more difficult. Help us understand, where exactly is the silver lining?
Furthermore, In theory the domestic market looks really good, but I really personally hope yet doubt the ability for the government to execute any plans effectively. Thats my opinion for now. Hope that will change with the upcomming elections.

Jeremy James (not verified) — Thu, 10/09/2008 - 6:57pm

I agree with David above. The fact that the economic indicators are stable says nothing of the situation in real terms. This is obvious from the fact that the report above quotes quarter on quarter growth yet I doubt any real rise in the living standards of the majority of people is as visible.

It would only take a rise in petrol prices or rice to the extent that people were unable to survive for the widespread panic and violence of 1997 to erupt once more. The word 'amok' is the only indonesian word which english speakers have adopted, and with good reason. You do mob violence so well that it puts english football hooligans to shame.

No doubt violence would be aimed at arab or chinese minorities and with them emptying their larger than average bank accounts and leaving the country all those stable financial indicators would be merely a faint memory.

David, Jakarta (not verified) — Thu, 10/09/2008 - 11:07am

The president is correct that the economic situation - in terms of fundamentals - is not anything like as precarious as in 1997. The Indonesian banking sector had to get its act together post 1997 and much was learned from the mistakes of those days.

What is more difficult to control is the irrational panic that breeds more of itself and which is, unfortunately, very characteristic of investors in Indonesia. The decision to suspend trading on the JSX was the right one under the circumstances. The KL stock exchange has an inbuilt 'circuit breaker' that suspends trading in similar situations and this helps to cushion Bursa Malaysia from short-term panic selling.

Mohamad Ramadan (not verified) — Thu, 10/09/2008 - 12:27am

Is this the man who lost his way in RI's impenetrable jungle, crying for help?
"No worry, all tigers or poisonous snakes already extinct, poached. Nothing life threatening left in our jungle, believe me". Can we? Does he really knows? Who knows? Anyone?

Atmo Saliyo (not verified) — Tue, 10/07/2008 - 9:45am

yeaahh...mr. president...reducing imports of rice and fuel by consuming supertoy and blue energy...lol...

Kevin c (not verified) — Tue, 10/07/2008 - 9:01am

yeah, mr. president.....i believe in you. indonesia is so crooked and messed up, i don't think anyone has any idea of what is going to happen!!

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