It’s not the same, this is the difference between the 1998 and 2018 economic crises
The difference between the 1998 and 2018 economic crises. Some time ago, the rupiah exchange rate was faced with a performance of IDR 15,000 per USD. Many are starting to worry about these conditions, especially investors. This condition caused the JCI to slip 4.50 percent to Rp5,630. Some investors even had nostalgic remembrance of the times of the fall of the JCI in 1998 and linking existing political stories. In fact, in fact the situation is now far different from the situation in 1998 where there was also political chaos at that time.
Reporting from the Around Forex page, comparing 1998 to 2018 is less appropriate, because in 2018 Indonesian politics tend to remain at a controlled level (unlike in 1998). Indonesia’s economic conditions in 1998 vs. 2018 also have many differences.
Here are the differences:
Another different thing is the Trade Balance. In 1998, Indonesia had a positive trade balance of USD 21.6 billion (exports greater than imports), so the current dollar increase actually had a positive impact on the state treasury. Now in 2018, our trade balance is negative USD 3.1 billion (more imports than exports). This is what contributes to the anxiety of local entrepreneurs.
However, the government does not remain silent in overcoming the problem.Various efforts have been made to increase exports, especially in these five areas:
1. Require domestic biodiesel biofuel components by 20% (B20) to reduce oil imports.
2. Postpone the target and operational schedule of the 15,200 Megawatt power plant project.
3. President Joko Widodo ordered the State-Owned Enterprises (BUMN) to increase domestic components (TKDN) in imported products such as cellphones and gadgets. Usually in electrical projects, domestic component level composition (TKDN) or can be up to 50% more in some projects, but on average there are 20% to 40%.
4. Enactment of tax incentives for companies that export at least 30% of their products. As with taking medicine, the healing process is certainly not instant. The effort that is being carried out now will be harvested the next day, as well as the government effort that we must appreciate.
5. The government is moving quickly to make policies that can benefit the country by increasing exports, so that Indonesia does not fall as Venezuela and other countries are affected by severe economic effects at this time.
Hopefully the results can be seen in the next quarter, especially improvements in the coming year.