Monetary crisis 1998 in Indonesia due to a LoI from the IMF

The IMF is the institution most responsible for the 1997-1998 financial crisis in Indonesia, which makes Indonesia 'frustrations because of piling up debt, privatization and economic liberalization inconsiderate people that make life more difficult. Indonesia's relationship with the IMF in the past suggests the agency is not a "god helper", but as "a source of harm" to the people of Indonesia. When the monetary crisis of 1997-1998, President Soeharto and economists known as the "Berkeley mafia" invite the IMF in order to restore the economic crisis. However, Indonesia would sink into a deeper abyss. The crisis is the worst economic crisis experienced by Indonesia since Independence. Letter of Intent from the IMF has been detrimental to Indonesia. This is due to get a loan to open the Indonesian government sectors previously off limits to foreign investors. The IMF also provides related recipe wrong way to overcome the economic crisis of 1997-1998, the increase in fuel prices and asking the government to rescue banks and inject recapitalization bonds. Total government injected funds reached IDR 650 trillion. The government is only able to pay interest to this day and when the debt is due in the 2030s, Indonesia is expected to immediately go bankrupt if it does not do debt rescheduling. Meanwhile, a 100 percent increase in fuel prices at that time led to the purchasing power declined and poverty increased. That's what would trigger riots, as people lost their jobs due to the crisis and poverty increased massively. IMF to overcome the debt crisis will only benefit the big banks the main cause of the crisis in the U.S. and Europe, while the people in the host country will bear the burden of the debt crisis through cuts in social spending and debt payments. According to him, helping to increase capital to the IMF would only legitimize the misguided policy of the Fund. This is because the IMF prescription to resolve the economic crisis in Indonesia proved to be even more to bed Indonesia with mounting debt. It can be ingested through the rescued banks, but the people who bear the burden of debt payments until now. All policies of the past that encouraged the IMF in Indonesia should be revoked. Perform a comprehensive audit of government debt as the basis for the elimination of debt. Minister of Finance, Dani added, should reflect on the condition of Indonesia's debt before deciding to lend to the IMF. Indonesia is still a debtor nation with a burdensome debt burden of the state budget. Debt payments in 2011 reached Rp 240,517 trillion, even in the revised budget ceiling of 2012, the amount of government debt has reached Rp 322,709 trillion. When compared to share of their budgets to the health sector, education, and agriculture, debt payments have spent a portion of the state budget in a very significant amount. Malpractice Fund Indonesia has been the victim of malpractice IMF a marked increase in the number of large debt (foreign debt and the issuance of government securities), the disbursement of BLBI, cutting subsidies, liberalization of the financial sector / trade, and privatization of sectors that should be the responsibility of the government, such as education and health. In fact, the IMF is blamed as the trigger for the 1998 riots, known as the IMF riot with various economic policies dictated by the agency. After the Reformation, the lives of the majority of Indonesian people are no better than the Soeharto era, because the post-reform economic policies over the interests of capital owners and move the responsibility of the state to the private sector. In fact, in the '45 Constitution, strategic and vital sector should be controlled by the state and not left to the private sector. Economic practices is indeed violated Article 33 of the Constitution of '45, causing the rich get richer and the poor get poorer. The root of the real problem which is when Suharto signed a memorandum of understanding or letter of intent (LoI) from the IMF in 1998. This could be interpreted give Indonesia's economic sovereignty to the remaining foreign corporations or multinationals. What was done at that time opposed Soeharto 180 degrees with the nationalization of foreign companies that want to realize the Sukarno era of independence not only from the political aspect, but also from an economic perspective. The IMF is the infrastructure of the capital owners or multinational companies to undermine the role of the state in various sectors of life. Multinational companies and this is a very dominant influence IMF prescriptions for countries in crisis. Sukarno of Indonesia has long been warned to be wary of the dangers of imperialism and neo-colonialism manifested in the international organization called the Fund. It is now 15 years Package applied Indonesia IMF, but the IMF is like a specialist, yet are not able to cure the disease in Indonesia. Like a doctor IMF has actually done wrong diagnosis of the disease in Indonesia. Yet the IMF has never admitted his guilt. Indonesia donates U.S. $ 1 billion in the G-20!, There were 30 poor people in Indonesia with a minimum wage of U.S. $ 100 every month every person The new policy of the IMF also recently hurt Indonesia that according to the decision of G-20, Indonesia had donated U.S. $ 1 billion by buying IMF bonds. For the IMF and industrialized countries that are in the G-20, the money equivalent to Rp9, 5 billion that may be not much or no significant meaning. Moreover, if the donation is in comparison to Japanese aid to the IMF amounted to U.S. $ 60 billion, the PRC (U.S. $ 48 billion) or Singapore who gave U.S. $ 4 billion. Help Indonesia was relatively small from the perspective of developed countries. But for Indonesia's assistance is burdensome, adding a new burden for the government to SBY, at least the psychological and political. For the corresponding reality in the field, Indonesia has not fully recovered from the multi-dimensional crisis. In the midst of crisis is not over, Indonesia still have to face the problems of life and death by about 30 million poor people and given the Indonesian government foreign debt is very stout in 2006 amounted to USD 132.63 trillion later in 2011 swelled to $ 221, 60 trillion .. It was very immoral and inhuman, when the government of SBY contributing citizens of Spain and the Greek people. Spain just won the European Football Championship. Although only a handful, but the members of the Spanish National Team, automatically awarded hundreds of billions. While in Indonesia, there is no such athletes fared Spanish footballer. With Greece about the same. The country is famous for its his business foremost in the world. Greek civilization is considered the oldest in the world, is also still get billions of dollars of foreign tourists all over the world who come there. Precisely by donating it, the President has acted the rich, but still relatively OKB (new rich) who at any time can still fall into poverty. In fact, the President has ignored the fact that we have tens of millions of poor people in Indonesia. Another fact of an adverse decision of the IMF Indonesia are two countries that have never heard urges the international community to help Indonesia. This somewhat indicates, the IMF did implement discriminatory policies. He could very concerned about Europe, but none of it to Asia or Indonesia. It is said that Yudhoyono expressed hooked up to it, because his advisors suggested donation is taken from reserves, currently at around U.S. $ 111 billion. So it is not taken from the state budget heading. In fact, wherever taken, still Indonesia's coffers automatically reduced. Approval of the president is quite surprising. Because only two months earlier, in Jakarta, the President determined to raise fuel prices or remove the fuel subsidy. With reason, if fuel prices are not raised, then in development activity in 2012 and going forward, the government will have financial difficulties. So there are inconsistencies in the way of thinking and acting. Say Similarly, to the extent that the president and first lady, Ani Yudhoyono lectured everywhere to reassure the public about the difficulties faced by Indonesia suppose people would not give approval for the removal of fuel subsidies. On the basis of the above arguments, the President is not only inappropriate but asked to be more critical when necessary to cancel the aid commitments. Do not let the Indonesian membership in the G-20 will only bring harm. Explain Whether or not you feel that the negative Impacts could have been avoided? Why or why not? The impact can be avoided from though difficult. As a recipient country should take advantage of the loan with the best possible assistance money without corrupted by state officials, so that the benefits of development really feels. But the country still supported to accept it, because she desperately needed money for development. The risk of the loss dictate economic policy, to state that creditors must use the loan money was as good for development Further explain your opinions on Whether you believe that international financial institutions such as these could consistently provide assistance in an objective, Unbiased and responsible manner. Why or why not? If you do not believe it is possible, then how could it be ensured? Believes and does. Believe donor agency if the State does not intervene in economic policy. Do not believe that donors who have money in the agency dictate economic policy for the country to be given assistance. Because dictate policy for the benefit of donors and harming state-assisted.Examples of state intervention donors:Submitted that the role of the International Monetary Fund (IMF) in the past 15 years in the preparation of regulatory interference in Indonesia is quite extensive. The impact is felt up until now, including in the field of dairy regulation in Indonesia that are considered liberal. Letter of Intent signed in October 1997 between the Government of Indonesia and the IMF have been used by an interest in the very distant from the aspect of the financial crisis at that time.This indicated the LoI items requiring the government to remove all provisions relating to the control of imports of milk, the obligation to absorb domestic production of fresh milk, and control the price of milk in the country.Due to the IMF's intervention in the development of policies contained in the national dairy Inpres. 2/1985 should be revised by Decree No.4/1998. Implications of the IF pressure is that after 1998 until the present domestic production of fresh milk dairy farmers produced relatively stagnant, and the bargaining power of dairy farmers through cooperative is very weak.