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IMF’s flattering plaudits can be intoxicating, but should be taken with a pinch of salt
The current leadership would do well not to fall under the spell of the magic words “Indonesia's economic fundamentals”, and instead heed the lessons of the previous financial crisis that toppled a longstanding regime.
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International Monetary Fund (IMF) Managing Director Kristalina Georgieva (center), flanked by State-Owned Enterprises Minister Erick Thohir (left) and Tourism and Creative Economy Minister Sandiaga Uno, speaks to reporters after a tour on July 17, 2022 of Sarinah department store in Central Jakarta. (The Jakarta Post/Deni Ghifari)
I
n a recent online discussion, I raised my reservations about the praises International Monetary Fund (IMF) Managing Director Kristalina Georgieva lavished on Indonesia’s economy after a meeting with President Joko “Jokowi” Widodo at Bogor Palace on July 17.
I often heard such generous compliments shortly before the 1997-1998 Asian financial crisis swept the region. The hardest hit was Indonesia, where a political crisis was also triggered.
One of the online discussion’s participants, an influential senior economist, laughed at my cynical view, which I did not argue. I am not an economist, after all.
I was skeptical because I felt a sense of déjà vu. I had closely followed the severe economic and political crises that unfolded in the country 25 years ago. When the financial slowdown was creeping up on Asia, the world was still fully confident in Indonesia’s ability to stave off the crisis because “Indonesia’s economic fundamentals are very healthy and strong”.
I do not doubt Georgieva’s assessment, as it is likely based on a comprehensive study by her excellent team. The World Bank and the Asian Development Bank (ADB) share her optimistic view about Indonesia, too.
So, you might ask me: “Who do you think you are, daring to question the assessment of a world institution?” I am nobody, but sometimes, albeit very rarely, the truth can come from a very ordinary man.
Georgieva’s remarks were widely reported by the local press, including The Jakarta Post.
