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The Economic Crisis Of 1997

Decent Essays
The Indonesian economic crises that emerged out of the greater Asian Financial Crises of 1997 is often presented as an example of an International Monetary Fund (IMF) project that created problems for the receiving nation. As the video Globalization at a Crossroads stated in its final words, “It supported the case that economic globalization actually increased economic instability.” Indeed, there were immediate, and in some cases, irreversible consequences of the IMF’s intervention into Indonesia’s economy. Examples of negative consequences included riots, massive inflation and contraction in the economy (Shari, 1998). However, through the lens of the current Indonesian economy, almost 20 years later, IMF intervention may have eventually worked as intended, as the country has demonstrated economic stability and growth through several more contemporary economic crises.
In the beginning of the IMF’s intervention in Indonesia, it seemed as though the IMF could do nothing right. On multiple occasions, Suharto, Indonesia’s dictator, had upstaged and embarrassed the IMF and IMF officials. The embarrassment hit a high note on May 14th, 1998 when riots and fires ran the remaining IMF delegation out of the country, but not before they were shaken down by immigration officials in exchange for food and water (Shari, 1998).
As Michael Shari reported in Business Week in 1998, the IMF’s faith in Suharto as a trustworthy and capable leader was severely flawed. At first, “Suharto…won
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