Fourteen years ago during the
Asian financial crisis, Indonesia endured a currency collapse, a severe
2-year recession, and an embarrassing IMF bailout.
Western
bureaucrats wagged their fingers incessantly at Indonesia, lecturing the
country about the dangers of excess and fiscal irresponsibility.
How
sweet the irony is. In a stunning
rags-to-riches story, Indonesia contributed US$1 billion to the IMF last
week in order to
help bail out bankrupt Western nations.
As
I’ve written before, unlike Japan,
the US, and Europe — which all seem to think the answer to an economic
bust brought on by a debt-binge is to borrow and spend even more money–
Indonesia took its medicine when its economy collapsed back in 1998.
The
government cut spending. The economy was de-regulated and thrown open to
more foreign investment.
The
banking system was restructured, and after a difficult and admittedly very
painful two years, the foundation was laid for new economic expansion,
which continues to this day.
To
be sure, the 1998 collapse of the Indonesian economy cost the incumbent
political elite here their cushy positions. President Suharto’s
three-decade long iron-grip came to an ignominious end. There were riots
in the streets, and he was literally turfed out of office.
But
so what? That’s EXACTLY what was
needed. Part of the renewal process should always be to ship out the dead
wood.
Wandering
the streets of Menteng this week, Jakarta’s most up-market residential
suburb, it’s as though the Suharto era never existed. The street where he
used to live is just another non-descript, quiet, residential street in
this leafy inner-city suburb.
Ironically,
US President Barack Obama spent some of his childhood in this same suburb
of Jakarta.
Unfortunately,
as he pulls out all stops to cling to power for a second term, the
kind of tough decisions that could help the US emerge from its
economic malaise have no chance of being made.
Lest
anyone accuse me of being “anti-Obama” or, shock-horror, FOR
the Republicans, let me state emphatically that the PROBLEM is not
one side of the aisle or the other. In fact, whoever coined the terms
“Demopublicans” and “Repulicrats,” is right on the money in my book.
It’s
the ENTIRE system that’s the problem. And that goes for nearly every Western,
“free market,” democracy out there.
I
use the term “free market” reluctantly, because these economies are anything
but. There has not been a true free market economy anywhere in the Western
world for many decades.
The
most important price of all — that of MONEY — is completely rigged by a small
band of dark-suited men who sit around an impressive boardroom table and
DECREE what interest rates should be. It is a farce.
Moreover,
politicians from opposing sides of the political spectrum may disagree in
public and harangue each other in the press.
But,
at the end of the day, they’re generally all members of the same club– a cabal
of privileged, self-righteous individuals who think they know how to spend
your money better than you do.
This
system has a vice grip on society, and nothing short of a revolution– such as
what Indonesia experienced in 1998– will force any change.
That
leaves most people with a rather interesting choice—stay at home in a declining, bankrupt,
insolvent nation and hope that a social and political revolution comes quickly…
…
or head to greener pastures, to a place that’s stable, thriving, and has
already swallowed its medicine.
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