Indonesian Rupiah

A detailed Summary of Indonesian Rupiah

Ensuring economic success is one of the main responsibilities of a man in power, such as President Suharto. Citizens depend on their leaders to represent their best interests and to provide a certain standard of living.

In the case of Indonesia, the political leader sought personal gain, in both power and finance, and provided his people with the minimum to keep them content and quiet.

Organizations, such as the IMF, were created to ensure that leaders such as Suharto do not gain absolute power. The IMF sets up certain measures of structural reform in exchange for financial assistance. In this particular case, Suharto took measures into his own hands, ignoring the suggestions made by the IMF resulting in a severe economic crisis. The IMF then responded by taking action and delaying disbursements to Indonesia and its people, in hopes that Suharto would agree to restructure its monetary policies.

6) The IMF's prescription made complete sense, in my opinion. With its actions, the IMF was able to regain some control over the economic situation occurring in Indonesia; that which Mr. Suharto had lost during his term.

An easier route would be to follow the structural reform measures as set by the IMF. This way, more areas of the economy receive assistance and the likelihood of a quick economic recovery is probably higher than that of selling currency in foreign markets.

10) I do believe that Indonesia should indeed establish a currency board that would link the rupiah to the dollar. This would ensure reasonable levels of fluctuation and provide a somewhat stable economy, which would attract foreign investment. However, I would not establish the currency board hoping that it, in itself, would solve the economic crisis in Indonesia. I would wait until the economy returns to a normal and stable position and then implement the currency board to maintain economic success.

y the IMF to be most fair and even lenient. Suharto was given numerous chances to oblige and IMF members sat back and waited patiently. More severe action could have been taken against President Suharto and I consider him to be lucky that he only received a delay in disbursement.

2) A most obvious benefit of an Indonesian debt moratorium is that it would grant permission to debtors for suspension of payment on their loans for a given period of time. This in turn would also free up some cash to increase the money supply. In addition, a debt moratorium, much like a currency board, would give the economy time to fix itself by reasserting its natural strengths.

9) The only way for such an organization to get its point across is to do something that will have an obvious and drastic effect. Food and fuel are every day necessities that effect every citizen. This puts the heat on Suharto, testing his commitment to his people and the public good.

The International Monetary Fund was designed to assist other countries, not cause any harm. The IMF sets guidelines for each country according to their specific needs. If the IMF's measures were tough, then the Indonesian economy must have really needed to

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Approximate Word count = 1485
Approximate Pages = 6 (250 words per page double spaced)

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