NBER Project on Exchange Rate Crises in Emerging Market CountriesSeptember 15, 2000
Royal Sonesta Hotel, Cambridge, MA
Project Directors: Martin Feldstein and Jeffrey Frankel
Thursday September 14:
7:00 PM Reception and Dinner
Speaker: RUDI DORNBUSCH, MIT and NBER
Friday September 15:
8:45 AM Continental Breakfast
9:00 AM Official Welcome
9:15 AM LIBERALIZATION AND GROWTH BEFORE 1997
Chair: JEFFREY FRANKEL, Harvard University and NBER
Panelists: IWAN AZIS, Cornell University
JOSEPH STERN, Harvard University
SWATI GHOSH, World Bank
RINO EFFENDI, Danareksa
What were the origins of the Indonesian economic crisis? How good was Indonesia's macroeconomic policy before 1997?
Did Indonesia undertake international financial liberalization too soon (i.e., ahead of trade liberalization, domestic financial liberalization, strengthening regulations, etc.)?
Was banking supervision clearly a problem before the crisis?
10:45 AM Break
11:00 AM SESSION 2: MACROECONOMIC POLICY IN FALL 1997
Chair: SIMON JOHNSON, MIT
Panelists: J. SOEDRADJAD DJIWANDONO, formerly Bank Indonesia
DAVID LIPTON, Moore Capital Strategy Group
JOSHUA FELMAN, IMF
STEVE RADELET, US Treasury
Was the initial macroeconomic policy response appropriate?
Was the Indonesian rupiah initially overvalued? After the Thai crisis of July 1997, Indonesia widened its currency bands but still suffered a severe depreciation. Why? What does this say about the new conventional wisdom that narrow bands are unsustainable?
What was the role of the IMF? Did it in any sense cause or exacerbate the crisis? Was the IMF program poorly designed?
12:30 PM Lunch
Speaker: HARUHIKO KURODA, Vice Minister of
Finance for International Affairs, Japan
1:45 PM SESSION 3: BANKING (AND BROADER ISSUES OF INSTITUTIONS)
Chair: STEVE RADELET, US Treasury
Panelists: BAMBANG SUBIANTO, formerly Indonesian Ministry of Finance
LLOYD KENWARD, formerly World Bank
YUNG CHUL PARK, University of Korea
ERNEST STERN, JP Morgan
Was it appropriate and helpful to close banks in fall 1997? Did the IMF get this right? What were the alternatives?
When did corporate governance problems really become evident?
Was there anything that could have been done to mitigate their effects?
To what extent can the severity of the Indonesian crisis be ascribed to institutional weaknesses of any kind?
3:15 PM Break
3:30 PM SESSION 4: ATTEMPTS TO RECOVER
Chair: MARTIN FELDSTEIN, Harvard University and NBER
Panelists: ANWAR NASUTION, Bank Indonesia
DENNIS FLANNERY, Lehman Brothers
ANOOP SINGH, IMF
ANDREW BERG, US Treasury
Why has economic recovery been slower in Indonesia than in other Asian countries? To what extent have problems since 1998 been due primarily to the difficult political succession?
Could economic policy in 1998-2000 have been better designed and implemented? What are the main macroeconomic policies and institutional reforms now required?
Has the economic crisis destabilized Indonesia in a long-lasting way (e.g., through leading to ethnic conflict and separatism), or forced needed reforms?
5:00 PM Adjourn
SWATI GHOSH, World Bank
MARI PANGESTU, CSIS, Jakarta
LLOYD KENWARD, World Bank
National Bureau of Economic Research (September 15, 2000)
THE WORLD BANK
GEOFFREY BASCAND, JOHN MCDERMOTT, and MAHMOOD PRADHAN, APD
ANNE-MARIE GULDE, MAE
MANFRED KOCH, FAD
PREPARED BY THE ECONOMIC ANALYSIS UNIT -
HARVARD INSTITUTE FOR INTERNATIONAL DEVELOPMENT
J.SOEDRADJAD DJWANDONO, University of Indonesia and Harvard University
IWAN AZIS, Cornell University
Chapter 6 "Exchange Rate, Capital Flows and Reform Sequencing in Indonesia:
Policy Trend and CGE Model Application"
ANWAR NASUTION, Bank Indonesia