How will the Asian Development Bank help Indonesia recover from the financial crisis?
Indonesia’s economy has hit a major crossroads and it will likely be months before the country can get back on its feet, with no signs of the country’s banks being revived.
Indonesia’s financial markets were shut down as the world’s largest economy, reeling from the 2008 global financial crisis, tried to find a way out of its debt crisis.
The country’s central bank, the Jakarta Stock Exchange, has stopped trading since December 31, 2014, and has had no access to the internet since November last year.
In January this year, Indonesia’s central bankers suspended their plan to restart the Indonesian stock market, the Nikkei, citing a lack of liquidity.
Since then, the stock market has plummeted, with stocks on the New York Stock Exchange down more than 70% in 2017.
But the country will likely never get back to the pre-crisis levels of prosperity that were enjoyed by the 1990s and 2000s, which included a decade of strong economic growth.
Analysts say that without foreign assistance, Indonesia will probably be unable to recover from its economic challenges.
“There are very few countries that are in a situation like Indonesia,” said Norges Bank analyst Timo Kessel, who expects Indonesia’s economic growth to slow this year.
Indonesia’s government is looking at revising its economic development strategy.
And a government statement on Monday also said that Indonesia will consider reopening the countrys capital, Jakarta, which has been closed since December 20, 2015, after its governor was found to have been involved in a fraud case.
Although Indonesia is not a member of the World Trade Organisation, it is a member state of the Asian Infrastructure Investment Bank (AIIB).
Indias trade with Malaysia was estimated at $8 billion last year, according to the country government, and its currency, the baht, rose by 7% in January this years trade.
However, the economy is slowing down, with growth falling to just 2.9% in the first half of 2018, according the central bank.
According to Indonesia’s National Economic Council (NEC), Indonesia’s GDP was $1.6 trillion in 2016, and $1 trillion in 2020.
NEC says Indonesia’s export growth is slowing to 2.5% in 2020 from 7.6% in 2015.
Kessel said the economic situation is so bad that he is unsure whether Indonesia will be able to keep growing at current levels.
Even with the continued turmoil in Indonesia, the country is unlikely to see much change in its economic outlook, Kessel said.
With the IMF and World Bank continuing to give Indonesia aid, and the World Bank also providing financial assistance to Indonesia, Indonesia has not been able to fully recover from this crisis.
The economy will likely slow down, and Indonesia may not be able recover from all the damage, Krosniak said.
“We need more international support to make the transition to recovery,” he said.