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Bank Indonesia and the Crisis

An Insider's View

J. Soedradjad Djiwandono

Publication Year: 2005

This important book is set to be a key document for those interested in Indonesia's recent economic and political history. There have been many unanswered questions about exactly how the regional currency crisis snowballed into a full-scale banking crisis in Indonesia, coupled with a total loss of credibility within a short time. This record by the official in the midst of the banking crisis, the ex governor of Bank Indonesia, gives a fuller and intriguing picture of the events, including the actions of President Soeharto, as well as a balanced account of the much criticised interventions by the International Monetary Fund. The author also analyses the lessons for monetary policy to avoid future such crisis. This is essential reading for economists and Indonesia watchers.

Published by: ISEAS–Yusof Ishak Institute


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Title Page, Copyright Page

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pp. iii-iv

Table of Contents

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pp. vii-vii

List of Tables

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pp. viii-viii

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pp. ix-x

Many individuals have been instrumental in providing me with generous support, advice and assistance that helped this long-drawn endeavour get started, proceed and finally completed. I would like to express my deep gratitude to all friends and colleagues who contributed one way or ...


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pp. xi-xii

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Prologue: The Crisis and Me

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pp. 1-12

During the Wahid era Indonesians started to get used to news about the dismissals of government officials, including cabinet ministers and generals, beginning with the dismissals of the then Minister for Trade and Industry Jusuf Kalla and the Minister of Public Enterprises ...

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1. Introduction

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pp. 13-21

The idea of writing an assessment and analysis of what had been developing in Indonesia’s economics and finance had been with me for some time. It started around the middle of my five-year term as Governor of Bank Indonesia, when the Bank commissioned a team to write a ...

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2. Origin of the Crisis and Early Responses

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pp. 22-75

During the first year of the Asian crisis, discussions among experts and writings in the media and professional journals had not been clear in showing the origins or development of the crisis. Only after more than a year of confusion did some kind of general ...

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3. Stabilization and Reform Programmes

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pp. 76-107

By formally receiving a stand-by loan from the IMF, the government’s efforts to address the crisis entered a new phase. The programme was very comprehensive, and supported by the Fund. The government policy became a macroeconomic adjustment programme to deal with balance ...

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4. Poor Programme Implementation

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pp. 108-141

The implementation of the IMF-supported programme started with the execution of the decision to close insolvent banks on 1 November 1997. In the jargon of IMF stand-by arrangements, this was a prior action, part of the conditionality. In fact it was a step that had to be ...

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5. Stronger Programme with Weak Commitment

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pp. 142-164

Confronted with deteriorating economic, financial and banking conditions towards the end of 1997 and beginning of 1998, the government undertook a variety of adjustment steps. But since the programme was part of the agreement with the Fund in a stand-by ...

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6. Bank Indonesia and the Crisis

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pp. 165-217

Several steps that were taken by the government and the central bank during the crisis have become the subject of public debate in Indonesia and unfortunately have not been resolved to the present. Some policies have even become controversial, due partly to the lack of clarity on the ...

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7. Lessons from the Crisis

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pp. 218-248

The Indonesian crisis has lingered on, becoming the worst in Asia. It may even be simply just the worst amongst crises countries that the world has experienced in the recent past. Even though this has been generally accepted as fact, it is still pertinent to ask why is this so. In ...

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8. Epilogue

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pp. 249-257

Since the beginning, I have been confronted with a dilemma in the writing of this book. One motive for writing this book has been the wish to share with the public my observations, assessments as well as analysis about a crisis that has had an impact on all aspects of life in ...

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pp. 258-261

Writing this book has taken far too long. Aside from my limited writing proficiency, this has also been due to a variety of reasons including deciding which issues to include, how detailed the discussions should be, the relevance of each issue, and the mentioning of names. In addition, ...


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pp. 262-275


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pp. 276-282


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pp. 291-291

About the Author

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pp. 304-304

E-ISBN-13: 9789812305985
Print-ISBN-13: 9789812303080

Page Count: 282
Publication Year: 2005

Edition: 1

OCLC Number: 647007648
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Subject Headings

  • Bank Indonesia.
  • Banks and banking, Central -- Indonesia.
  • Financial crises -- Indonesia.
  • Structural adjustment (Economic policy) -- Indonesia.
  • Economic stabilization -- Indonesia.
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