In and Out
Nobody around here likes to talk about the recent economic crisis it seems. Probably because it is an eerie reminder of 1997. Alas, there is no escaping it. The dark days are here again, and sooner or later, we will have to face it. the Jakarta stock market has started taken the beating, and the rupiah is going nowhere but down.
So are we ready? (Or is that a silly question, especially after we witnessed even US and Europe are caught unprepared?)
How do you prepare for a crisis anyway? Are we even aware of what is coming?
So we asked around, during coffee breaks, in elevators, while walking to parking lot.
Most answers are standard: Sure, the value of our currency will go down, export slows, and with that unemployment will rise, it's all bad news but nothing new.
"Are we ready? We'll never be ready, but after 1997, less things would surprise us. At least this time our banks are still standing." (Or is that too early to say?).
"It will be just like 1997 but hopefully without the fall of government. If we can go through the economic crisis without political crisis and - God forbid - the riot, then it is already a step forward." said some.
Looks like the scar of 1997 has made us somewhat zen in facing the current economic turmoil.
One friend however gave a somewhat different answer compared to the majority:
"Are we ready going into another economic crisis? Going IN?
My friend, we are in. We have been in it since 1997. Whatever made you think we have gotten out from that one? Look at the value of rupiah: it never recovered. Look at our per capita GDP. (Indonesia's per capita GDP (PPP) was $3,770 in 1996 [1], and now it is $3,600 [2]. Still less than prior to 1997 crisis).
"Are we ready? We are already in it for ten years now. We're not just ready, we're bl**dy experts..."
What a cynicism. Or is that optimism? We can't really tell.
----
[1] World Factbook 1997, from University of Missouri St Louis site.
[2] CIA The World Factbook - Indonesia
So are we ready? (Or is that a silly question, especially after we witnessed even US and Europe are caught unprepared?)
How do you prepare for a crisis anyway? Are we even aware of what is coming?
So we asked around, during coffee breaks, in elevators, while walking to parking lot.
Most answers are standard: Sure, the value of our currency will go down, export slows, and with that unemployment will rise, it's all bad news but nothing new.
"Are we ready? We'll never be ready, but after 1997, less things would surprise us. At least this time our banks are still standing." (Or is that too early to say?).
"It will be just like 1997 but hopefully without the fall of government. If we can go through the economic crisis without political crisis and - God forbid - the riot, then it is already a step forward." said some.
Looks like the scar of 1997 has made us somewhat zen in facing the current economic turmoil.
One friend however gave a somewhat different answer compared to the majority:
"Are we ready going into another economic crisis? Going IN?
My friend, we are in. We have been in it since 1997. Whatever made you think we have gotten out from that one? Look at the value of rupiah: it never recovered. Look at our per capita GDP. (Indonesia's per capita GDP (PPP) was $3,770 in 1996 [1], and now it is $3,600 [2]. Still less than prior to 1997 crisis).
"Are we ready? We are already in it for ten years now. We're not just ready, we're bl**dy experts..."
What a cynicism. Or is that optimism? We can't really tell.
----
[1] World Factbook 1997, from University of Missouri St Louis site.
[2] CIA The World Factbook - Indonesia
posted by Indonesia Anonymus | 9:19 PM
4 Comments:
It was explained to me like this: The Indonesian banks aren't anywhere near as exposed because, ironically, they have such bad S+P ratings, e.g. Bank Niaga is only BB rated - which means they haven't been able to over-extend themselves in the same way as AiG, RBS and pretty much every foreign bank in trouble. Ironically, RBS and its ilk are all AAA rated.
I have also heard high praise for SBY and Kalla, who have been in our faces non-stop telling us not to panic. This is in direct contrast to leadership elsewhere. I don't think you can underestimate the impact that this has. It helps that they have such a good team with Sri Mulyani, etc.
I would put my money on the Indonesian economy surviving and coming out stronger.
That's good to know, Brett.
Always happy to hear you sharing your optimism on Indonesia.
I have no idea what to expect. I only just moved here a month ago and am worried about what all of this will mean.
The economic crisis has already badly impacted on my field (journalism) in Australia and the UK particularly, with many job losses...
I think the only way to deal with a crisis is to cross your fingers and prepare to pinch your pennies (or Rupiah).
Or you could just freak out! Or go into hiding in a cave in the wilderness and withdraw from a capitalist existence entirely...
Bettylovesblogging,
Freaking out is probably the worst thing you should do at this moment.
Take it easy.
You actually got it right: one way to deal with this crisis is by pinching pennies.
Actually, that is one reason why Asia is somewhat stronger coming into this crisis. The population saves a lot. (Compare that to the US population with negative saving rate.)
Pinching pennies is a good thing and we probably should do it more, and not just because of a crisis.
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