Building a storefront, forgetting the foundation
The government wants Indonesia to have a strong personality, emphasizing nation and character-building. Unfortunately, during this period, economic development was neglected. Indonesia also runs a politics of confrontation. As a result, the economy is in chaos, and hyperinflation occurs. Nonetheless, the lighthouse project built in this era has become the pride of Indonesia until now.
BI position
The central bank is under the control of a guided economy
Government spending on development projects is enormous, while revenue is minimal. As an instrument of revolution, BI is a cashier for the government and helps cover the budget deficit. During this guided economy period, the Minister of Finance can take actions that deviate from the BI Basic Law if deemed necessary, and all the authority of the Monetary Board changes hands to the Cabinet. The Governor of BI sits in the Cabinet as Minister of Central Bank Affairs.
PERIOD 3 (1966-1983)
The economy as the Direction of the State
"As was to be expected, the devaluation had a more direct effect on non-traditional export goods, particularly industrial and handicraft products. The export value of these goods soared as the world market prices for exported goods increased. This development resulted in a surplus in the balance of payments. Which is much larger than the previous period.” -Rachmat Saleh, Bank Indonesia Report for the 1979-1980 Bookkeeping Years
Country State
It is time for the economy to reign supreme
