Update COVID-19 in Indonesia: 4,223,094 confirmed infections, 142,413 deaths (06 October 2021)
17 October 2021 (closed)
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Christine Lagarde, Managing Director of the International Monetary Fund (IMF), will arrive in Indonesia (Jakarta) today (01/09) to participate in the two-day conference titled ‘Future of Asia’s Finance: Financing for Development 2015’, organized by the IMF and Indonesia’s central bank (Bank Indonesia). Contrary to recent rumors, Lagarde's visit is not related to Indonesia seeking a new loan from the IMF.
Benedict Bingham, a Senior Representative of the IMF for Indonesia, stated that, besides the conference, Lagarde is also to meet Indonesian President Joko Widodo, Vice President Jusuf Kalla, and several high ranked government officials including Darmin Nasution (Chief Economic Minister), Bambang Brodjonegoro (Finance Minister), Agus Martowardojo (Governor of Bank Indonesia) as well as several parliament members and representatives of non-government institutions. The main topic that will be discussed is the safeguarding of Indonesia’s economic stability.
Over the past couple of weeks there emerged speculation in Southeast Asia's largest economy that Lagarde’s visit is related to the Indonesian government seeking a new loan from the IMF. However, such rumors are entirely unfounded according to IMF's Bingham.
In Indonesia such speculation easily surfaces as the country is still haunted by the traumatized memories of the Asian Financial Crisis in the late 1990s. This crisis evolved from a financial crisis into a political and social one that led to a significant change in the country’s political and economic structure. With the rupiah currently hovering near 17-year lows, some people are concerned that another crisis may break out. Particularly the arrival of an IMF representative in Indonesia can lead to heightened concern as the IMF played a big role in the Asian Financial Crisis. In October 1997, the IMF arrived in Indonesia - back then still under Suharto’s authoritarian New Order regime - with a USD $43 billion bailout package to restore confidence in the Indonesian rupiah. In return, the IMF demanded far-reaching financial reforms. However, it is now believed that the IMF’s actions during the crisis in fact exacerbated the crisis as the institution pushed for too much reform too soon, while it failed to curb Suharto's system of patronage (this system was damaging the country's economy and undermining the IMF accord). In 2006 Indonesia finally paid off all of its debt obligation to the IMF.