The ill-fated currency board proposal for Indonesia

Ross McLeod ()

No 17, Studies in Applied Economics from The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

Abstract: In February 1998, President Soeharto’s chief economic advisor, Professor Steve Hanke, proposed a currency board as the means to extract Indonesia from the Asian Financial Crisis. President Soeharto embraced Hanke’s proposal and announced that he intended to implement it. The international, and eventually domestic, opposition was so vociferous that the currency board plan was aborted. Professor Ross McLeod’s diagnosis of the state of Indonesia’s economy concludes that most analysts failed to understand Indonesia’s economic fundamentals; that the opposition to the currency board was ill-informed; that Soeharto’s embrace of the currency board was sensible; and that the opposition to the currency board was motivated to a considerable extent by the desire to use the financial crisis to force a regime change in Indonesia.

Pages: 31 pages
Date: 2014-04
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Citations: View citations in EconPapers (1)

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Working Paper: The ill-fated currency board proposal for Indonesia (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jhisae:0017

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