09/21/2015, 00.00
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Catholic economists: Indonesia is strong enough to overcome the current crisis

by Royani Lim
Two ex-seminarians, now experts in finance, intervene in a debate on the monetary crisis in Indonesia. The rupiah is at its lowest level in 17 years. According to economists, however, the situation is better than the crisis of 1998 and 2008: "We cannot predict when this situation will end, but fear should not slow down development."

Jakarta (AsiaNews) - The Indonesian economy "has strong enough foundations to address the crisis of these days”, maintains Prasetyantaka, a former seminarian and a professor of economics at the Catholic University of Atma Jaya, who spoke at a meeting, held in Jakarta by Catholic leaders, to discuss the financial uncertainty that is hitting Indonesia. The population is frightened following the sudden drop of the national currency (rupiah) now at its lowest level in 17 years against the dollar, trading at 14,445.

In the general public’s eyes the recent crisis is a "ghost" of the two most serious economic crises that plagued the country in 1998 and 2008. That of '98 forced President Suharto from power after 32 years of authoritarian rule.

According Prasetyantaka, these fears are not entirely justified. Citing recent data - the growth rate of 4.7%; inflation at 7%; public debt at 24% and bank interest rates at 7% - the economist concludes that the financial health of the country is much better than that seen during the two economic crises: "The question is how long will this market uncertainty last" .

For the professor, the causes of the slowdown in growth, the pressure on the currency and the decline of investment in the country, are the result of both external and internal factors. From the external point of view, devaluations of the yuan last month have had an important role. Internally, the as of yet inconclusive process of political consolidation and the halt in state investments have had a marked impact.

Even Theodurus Wiryawan - former seminarian and now a management consultant - thinks that Indonesia can survive the devaluation of the currency, even if the rupiah falls to 16.000 per dollar. According to the consultant, "the market will find strategies to overcome the situation. At present, however, it is unknown when this situation will end, but we must not let the data depressants slow down our development. There are still many opportunities the market“- concludes Wiryawan.

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See also
U.S. debt approaches insolvency; Chinese currency reserves at risk
China increases its gold reserves
Chinese yuan set to replace dollar
Jakarta, weak currency and rising prices threaten economic growth
Growing unemployment in the Philippines, also due to corruption and waste


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