Indonesia, which went cup in hand to the International Monetary Fund last time, has much more room to maneuver. The country's public debt has come down significantly, from more than 100 percent of the size of its economy eight years ago to about 36 percent now.
And in its earliest stages the credit crisis has brought a measure of relief to Southeast Asia.
Riau province May 21, 2008. Indonesia, the world's biggest palm oil producer,
is considering bringing in a mandatory policy for the use of palm-based biodiesel
in the domestic market this year, government officials said on Wednesday.
REUTERS/Stringer (INDONESIA)
The plunge in oil prices is good news for Indonesia, where subsidies make up a large part of the government budget.
The poor may also benefit. Along with fuel, the price of rice has fallen sharply.
"Inflation this year is 6 percent; next year it will be half that," said Supavud Saicheua, managing director of Phatra Securities in Bangkok. "The poor and working class in factories will definitely benefit."
Southeast Asian countries exported themselves out of the last crisis in 1998 with cheap products made even cheaper by their devalued currencies. This crisis, when measured by economic growth, is predicted to be far less severe.
ETFs/Stocks :
Indonesia Fund (THE) IF $4.19 -0.14 (-3.23%)Related Posts :Sources :
- The International Herald Tribune: This time, Southeast Asia is not at center of the crisis, November 12, 2008
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