The Indonesian government and some economic observers claim that rupiah’s weakening is largely caused by global events: anticipation of US Fed’s rate hike, el nino, the end of commodities boom, oil glut and China’s devaluation.
But the interesting part is, the most affected countries by these global events are Indonesia, Turkey, Brazil, South Africa, Russia and Malaysia, and they all have one thing in common: weak politics [Project Syndicate / Bill Emmott]
Specifically after China’s devaluation, the currencies of Kazakhstan, Saudi Arabia, Vietnam, Turkmenistan, Tajikistan, Armenia, Kyrgyzstan, Egypt, Turkey, Nigeria, Ghana, Zambia, Turkey and Malaysia all felt the immediate pressure, which, again, mostly caused by the economic mismanagement by their respective governments [Bloomberg / Srinivasan Sivabalan]
And Indonesia is not an exception. Global events may give the pressure to our economy, but the underlying problem is generated not from external factors, but from the distorted policies by former president SBY and president Jokowi [The Jakarta Post / Anwar Nasution]
Just because other countries are suffering too. Just because our current economic problems are nothing compared with the one we had in 1998. It doesn’t mean that the government are doing the right thing. Some urgent reforms are needed, and in the end the faith of our currency is in our government’s own hand.