European and the U.S.A crisis start to affect Indonesian economy. At the early stage, the effects take form in instability of exchange rate. This can be worsening as instability of exchange rate will influence international trade volume and foreign reserves. Meanwhile Indonesia doesn’t have that much foreign reserve to support its currency as China.
In short terms this may not sounds too urgent; at least for the first 6 months. However, if crisis last more than 6 months Indonesia may not be that persistent. As per current condition, it has USD 122 billion as foreign reserves, decreased by USD 2.6 billion used for market intervention to stabilize Rupiah’s rate and debt payout. The decrease is quite significant and government should start to worry and anticipate further decline as the crisis worsen day by day. However, until now government hasn’t yet announced any concrete steps to “welcome” the coming storm. As a matter of fact, Indonesia doesn’t even have so called emergency fund in case of crisis happened.
Actually each sector has its own crisis mechanism real, financial, private and public. However, they haven’t been synergized yet. It is government’s responsibility to synergize and integrate them. Government and the central bank, Bank Indonesia, should cooperate closely in order to keep the economy save. “At this point of time we still have no system that is well integrated as a protocol to overcome the crisis,” said Perry Warjiyo, the Central Bank Director of Research and Monetary Policy. Meanwhile, Harianto Solichin, the Director of Nikko Securities stated that foreign direct investment (FDI) would be much favorable at this state. Harianto then develops his statement by mentioning that there are several foreign companies which are willing to invest in Indonesia such as Toyota Motor with an investment of 3.31 trillions, P&G with 1 trillion, Nestle with 2 trillion and Unilever with 3.6 trillions Rupiahs, all by the year 2012. Government should carefully exploit this momentum to strengthen Indonesian economy as anticipation toward global crisis.
Tags: Global crisis, Indonesia, Investment