Getting Stronger: Indonesia's Recovery from Dutch Legacy of Severe Debt

Furthermore, in the New Order era, all debts were spent on development. By the time the financial crisis hit Asian countries, Indonesia's current account deficit increased, putting pressure on the rupiah exchange rate.

“So when there was an adjustment in the exchange rate, the entire balance sheet of companies, banks, country, all experienced pressures because, within a day, the rupiah exchange rate changed suddenly, volatility increased, assets did not increase, companies with rupiah cash flow and foreign-denominated debt collapsed,” she said.

Sri Mulyani said currently Indonesia’s economic condition is getting stronger. The government also carried out financial reforms to tackle the Covid-19 pandemic.

Also read: Indonesia Expects Covid-19 Vaccine From Gavi Covax Facility By 2021

Amid the Covid-19 conditions this year, she said, the government has also prepared a budget for handling the Covid-19 for next year.

The former World Bank managing director said that the government has allocated a budget for vaccines and social protection which will be continued next year.

“It is still unclear when the Covid-19 will end, but we want to get a vaccine, so we provide a budget for health,” she said.

“The government will continue to provide social assistance for the people who are severely affected by the Covid-19, the impact of restrictions on partial lockdown,” she said, adding that many struggling small and medium enterprises also need help.

(Writer: Mutia Fauzia | Editor: Erlangga Djumena)

Source: https://money.kompas.com/read/2020/10/12/131654826/cerita-sri-mulyani-soal-warisan-belanda-ekonomi-yang-rusak-hingga-utang?page=all#page3.