Economy of Indonesia

During the 30 years of president Suharto's "New Order" government, Indonesia's economy grew from a per capita GDP of $70 to more than $1,000 by 1996. Through prudent monetary and fiscal policies, inflation was held in the 5%–10% range, the rupiah was stable and predictable, and the government avoided domestic financing of budget deficits. Much of the development budget was financed by concessional foreign aid. In the mid-1980s, the government began eliminating regulatory obstacles to economic activity. The steps were aimed primarily ...

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Economy of Indonesia, Economy of Indonesia - Background, Economy of Indonesia - Oil and minerals sector, Economy of Indonesia - Investment, Economy of Indonesia - Economic relations with the United States

Read more here: » Economy of Indonesia: Encyclopedia II - Economy of Indonesia - Background

The Asian financial crisis was a financial crisis that started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries, many considered East Asian Tigers. It is also commonly referred to as the Asian currency crisis or locally as the IMF crisis although the latter is somewhat controversial. Indonesia, South Korea and Thailand were the countries most affected by the crisis. Hong Kong, Malaysia, Laos and the Philippines were also hit by the slump. Mainland C ...

Including:

• Asian financial crisis - History
• Asian financial crisis - Thailand
• Asian financial crisis - Philippines
• Asian financial crisis - Hong Kong
• Asian financial crisis - South Korea
• Asian financial crisis - Malaysia
• Asian financial crisis - Indonesia
• Asian financial crisis - Singapore
• Asian financial crisis - People's Republic of China
• Asian financial crisis - The United States and Japan
• Asian financial crisis - Laos
• Asian financial crisis - Myanmar
• Asian financial crisis - Consequences
• Asian financial crisis - External Reference

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Until 1997, Asia attracted almost half of total capital inflow to developing countries. However, Thailand, Indonesia and South Korea had large private current account deficits and the maintenance of pegged exchange rates encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors. Economists have advanced the impact of Mainland China on the real economy as a contributing factor to the crisis but the main cause of the crises was excessive real estate speculation. Chin ...

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Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - History

The "Asian flu" also put pressure on the United States and Japan. Their economies did not collapse, but they were severely hit. On 27 October 1997, the Dow Jones industrial plunged 554-points, or 7.2 percent, amid ongoing worries about the Asian economies. New York Stock Exchange briefly suspended trading. The crisis led to a drop in consumer and spending confidence (see October 27, 1997 mini-crash). Japan was affected because its economy is prominent in the region. Asian countries usually run a trade deficit with Japan because ...

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Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - The United States and Japan

The Singaporean economy managed to turn in a relatively healthy performance in comparison to her Asian peers during and as a result of the financial crisis, although its strong linkages and dependency on her regional economies still entailed some negative effects on her economy. Singapore, unlike Hong Kong, remained attached to the liberal free market openess that had originally built its wealth. As a result, Singapore weathered the crisis far better than all other countries and by 2001 was experiencing a GDP growth rate of nearly 10%. Its o ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Singapore

The Asian crisis affected currencies, stock markets, and other asset prices of several Asian countries. Indonesia, South Korea and Thailand were the countries most affected by the crisis. The economic crisis also led to political upheaval, most notably culminating in the resignations of Suharto in Indonesia and Chavalit Yongchaiyudh in Thailand. There was a general rise in anti-Western sentiment, with George Soros and the International Monetary F ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Consequences

From 1985 to 1995, Thailand's economy grew at an average of 9%. On 14 May and 15 May 1997, the baht, the local currency, was hit by massive speculative attacks. On 30 June, Prime Minister Chavalit Yongchaiyudh said that he would not devaluate the baht, but Thailand's administration eventually floated the local currency, on 2 July. In 1996, an American hedge fund had already sold $400 million of the Thai currency. From 1985 until 2 July 1997, the baht was pegged at 25 to the dollar. The baht dropped very swiftly and lost half of its va ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Thailand

In June 1997, Indonesia seemed far from crisis. Unlike Thailand, Indonesia had low inflation, a trade surplus of more than 900 million dollars, huge foreign exchange reserves of more than 20 billion dollars, and a good banking sector. But a large number of Indonesian corporations had been borrowing in U.S. dollars. During preceding years, as the rupiah had strengthened respective to the dollar, this practice had worked well for those corporations -- their effective levels of debt and financing cos ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Indonesia

The Philippines central bank raised interest rates by 1.75 percentage points in May 1997 and again by 2 points on 19 June. Thailand triggered the crisis on 2 July. On 3 July, the Philippines central bank was forced to intervene heavily to defend the peso, raising the overnight rate from 15 percent to 24 percent. The peso fell significantly, from 26 pesos per dollar at the start of the crisis, to 3 ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Philippines

The collapse of the Thai baht on July 2, 1997, came 24 hours after the United Kingdom handed over soveriegnty over Hong Kong to the People's Republic of China. In October 1997, the Hong Kong dollar, which was pegged at 7.8 to the US dollar, came under speculative pressure since Hong Kong's inflation rate was significantly higher than that of the US for years. Monetary authorities spent more than US$1 billion to defend the local currency. Since Hong Kong has more than US$80 billion of foreign reserves, which is equivalent to 700% of M1 money ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Hong Kong

Pre crisis, Malaysia had a large current account deficit of 5 percent of GDP. At the time, Malaysia was a top investment destination, and this was reflected in KLSE activity which was regularly the most active exchange in the world. (with turnover exceeding even markets with far higher capitalisation like the NYSE) . Expectations at the time were that the growth rate would continue, propelling Malaysia into developed status by 2020, a government policy articulated in Wawasan 2020. As at start of 1997, the KLSE Composite index was above 1,200, the ringgit was trading above 2.50 ...

See also:

Asian financial crisis, Asian financial crisis - History, Asian financial crisis - Thailand, Asian financial crisis - Philippines, Asian financial crisis - Hong Kong, Asian financial crisis - South Korea, Asian financial crisis - Malaysia, Asian financial crisis - Indonesia, Asian financial crisis - Singapore, Asian financial crisis - People's Republic of China, Asian financial crisis - The United States and Japan, Asian financial crisis - Laos, Asian financial crisis - Myanmar, Asian financial crisis - Consequences, Asian financial crisis - External Reference

Read more here: » Asian financial crisis: Encyclopedia II - Asian financial crisis - Malaysia

U.S. exports to Indonesia in 1999 totaled $2.0 billion, down significantly from $4.5 billion in 1997. The main exports were construction equipment, machinery, aviation parts, chemicals, and agricultural products. U.S. imports from Indonesia in 1999 totaled $9.5 billion and consisted primarily of clothing, machinery and transportation equipment, petroleum, natural rubber, and footwear. Economic assistance to Indonesia is coordinated through the Consultative Group on Indonesia (CGI), formed in 1989. It includes 19 donor countries and 13 international organizations that meet annually to coord ...

See also:

Economy of Indonesia, Economy of Indonesia - Background, Economy of Indonesia - Oil and minerals sector, Economy of Indonesia - Investment, Economy of Indonesia - Economic relations with the United States

Read more here: » Economy of Indonesia: Encyclopedia II - Economy of Indonesia - Economic relations with the United States

Indonesia is the only Asian member of the Organization of Petroleum Exporting Countries (OPEC) outside of the Middle East, and is the only OPEC member that is a net oil importer. In early 2005, Indonesian crude oil and condensate output was 1.07 million barrels per day. This is a substantial decline from the 1990s, due primarily to aging oil fields and a lack of investment in oil production equipment. In 1999, Crude and condensate output averaged 1.5 million barrels (240,000 m³) per day, and in the 1998 calendar year the oil and gas sector, ...

See also:

Economy of Indonesia, Economy of Indonesia - Background, Economy of Indonesia - Oil and minerals sector, Economy of Indonesia - Investment, Economy of Indonesia - Economic relations with the United States

Read more here: » Economy of Indonesia: Encyclopedia II - Economy of Indonesia - Oil and minerals sector

Since the late 1980s, Indonesia has made significant changes to its regulatory framework to encourage economic growth. This growth was financed largely from private investment, both foreign and domestic. U.S. investors dominated the oil and gas sector and undertook some of Indonesia's largest mining projects. In addition, the presence of US banks, manufacturers, and service providers expanded, especially after the industrial and financial sector reforms of the 1980s. Other major foreign investors included Japan, the United Kingdom, Singapore, t ...

See also:

Economy of Indonesia, Economy of Indonesia - Background, Economy of Indonesia - Oil and minerals sector, Economy of Indonesia - Investment, Economy of Indonesia - Economic relations with the United States

Read more here: » Economy of Indonesia: Encyclopedia II - Economy of Indonesia - Investment