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New leaders propel Indonesia, 20 years after 'wrong advice'

Bloomberg Published on Wed, Jul 05, 2017 / 1:41 PM GMT+8

Fuad Bawazier, right, with Ginanjar Kartasasmita

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(July 5): For Fuad Bawazier (photo left), the financial crisis that moved like a wrecking ball through the Indonesian economy two decades ago remains a source of deep regret.

As finance minister in the dying days of Suharto’s dictatorship, Bawazier said he tried to warn the president against accepting a bailout of more than US$40 billion ($55.3 billion) put together by the International Monetary Fund because of the strict austerity conditions linked to it. Suharto pushed ahead and Bawazier ended up having to implement the IMF’s plans, including budget cuts, high interest rates and bank closures that hurt an economy already in the throes of a currency collapse.

“The IMF gave the wrong advice, the completely wrong advice,’’ Bawazier, 67, said in an interview, recalling the turmoil of his short, three-month stint as finance minister.