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Former VP warns BI to keep eye on global uncertainties
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Former Vice President Boediono sits next to Bank Indonesia Governor Agus Martowardojo (center) during a seminar at the annual Executives' Meeting of Asia Pacific Central Banks (EMEAP) in Bali on Aug. 1. (Courtesy of Bank Indonesia/-)
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ormer Vice President Boediono has warned Bank Indonesia (BI) to stay alert in the midst of uncertainties caused by the sluggish global economy and worldwide political turbulence, stressing that an early response is crucial to anticipate a possible global economic crisis.
Boediono, who is also a former BI governor, added that political and security problems across the world were clouding the global economic outlook and would eventually impact the global financial and economic performance.
"Uncertainties will always be with us. From time to time, there will be turmoil. Since we are in an era of globalization, turmoil in other parts of the world will have an impact on our economy," Boediono said in a keynote speech at the launch of the Bank Indonesia Institute in Jakarta on Monday.
He added that a central bank’s early response during a financial crisis was crucial. Looking back at Indonesia’s financial crisis of 1998, Boediono said BI had been too late for an early response, causing a prolonged financial crisis in the following years.
"Our response was not fast enough at that time. Two months passed [without adequate response] and the situation got worse. Finally, it could be corrected in the third month, but it was already too late. This is a lesson for us all, to anticipate crisis with thorough measures," he went on. (ebf)
