Indonesia

NBER Project on Exchange Rate Crises in Emerging Market Countries

Indonesia

PRELIMINARY PROGRAM

September 15, 2000
Royal Sonesta Hotel, Cambridge, MA

Project Directors: Martin Feldstein and Jeffrey Frankel
Simon Johnson and Steve Radelet, Program Chairmen

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

BACKGROUND INFORMATION

SWATI GHOSH, World Bank

MARI PANGESTU, CSIS, Jakarta

Indonesia: Macro-Financial Linkages and Build up of Vulnerabilities (March 1999)

LLOYD KENWARD, World Bank

Accessing Vulnerability to Financial Crisis: Evidence from Indonesia (December 1999)

Comments for "The Indonesian Crisis of 1997 - 1998"

National Bureau of Economic Research (September 15, 2000)

THE WORLD BANK

Indonesia in Crisis: A Macroeconomic Update (July 16, 1998)

Indonesia Sustaining High Growth with Equity (May 1997)