Fix the rupiah<\/p>\n
There has been so much talk about the effects of the crisis
\nthat it seems to me everyone is forgetting the reason. The most
\nimportant comment made by Steve Hanke, as he tried his best to
\nhelp, was "It's the rupiah, stupid." The solution is simple and
\nit involves exchange controls, tax amnesty and strict legal
\npenalties for transgressors:<\/p>\n
a. President Habibie and coordinating ministers Ginandjar
\nKartasasmita and Hartarto announce -- at 7 p.m. on a Saturday
\nnight -- that the rupiah exchange rate is fixed at Rp 3,600 to
\nUS$1.<\/p>\n
b. Separate presidential regulations are signed, effective
\nimmediately, which make it illegal for companies and individuals
\nto enter foreign currency transactions without approval. Penalty
\nis confiscation of the currency transaction and a mandatory
\nprison sentence of eight months in jail for transactions below
\n$10,000 and eight years in jail for transactions above $10,000.<\/p>\n
c. Bank Indonesia -- on application -- issues approvals to bona
\nfide importers, those with registered foreign debt, dividends to
\nforeign shareholders and others with an approved "need" for
\nforeign currency. A copy of each approval is sent to a new
\nindependent regulatory body which audits the applicants.<\/p>\n
d. Indonesian citizens are advised that it is illegal to hold
\nforeign currency accounts overseas. A one-month tax amnesty is
\ngranted for the repatriation of this money and its transfer into
\nonshore rupiah accounts. Similar jail sentences will apply.<\/p>\n
e. It is illegal (and now unnecessary) for Indonesian companies
\nand individuals (property owners, hotels, consultants etc.) to
\nmake onshore transactions in foreign currency.<\/p>\n
f. Special exemptions are allowed for tourists, overseas medical
\nand education, travel, etc. Non-Indonesian workers, employed with
\nthe proper authority in Indonesia, may receive a portion of their
\nremuneration offshore. This must be declared and is subject to
\nIndonesian tax. Salary payments onshore may not be repatriated.
\nAgain, company directors and individuals will go to jail if they
\nthink these rules don't apply to them<\/p>\n
g. Indonesia reintroduces the DICS rupiah system to kick-start
\nthe flow of new investment dollars.<\/p>\n
h. The prison system is to be opened to foreign investment and is
\nfinanced by fines and confiscated foreign currency.<\/p>\n
So now that the currency problem if fixed in one night, let's
\nget the nation back to work.<\/p>\n
JOHN SLACK<\/p>\n
Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/fix-the-rupiah-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }