Help your mates<\/p>\n
Almost two years have elapsed since the present monetary
\ncrisis began in July 1997, and until now we still do not see any
\nlight at the end of the tunnel.<\/p>\n
We currently adopt the floating rate system, and every
\nexporter is allowed to keep his earnings for himself. Perhaps
\nthis is the reason why at present we are still in dire need of
\nU.S. dollars. As the demand for the dollar keeps increasing -- to
\npay our foreign debt among other things -- it will take some time
\nbefore the rupiah-dollar exchange rate returns to its pre-July
\n1997 level.<\/p>\n
About four decades ago, a government regulation obliged
\nexporters to hand over their export revenue to the government in
\nexchange for rupiah at the current exchange rate at the time.<\/p>\n
Later on, when exporters needed to import raw materials or
\ncapital goods for their products, they could apply for the
\nessential dollars to even out the letter of credit.<\/p>\n
So a controlled foreign exchange (forex) system prevailed at
\nthat time, which I believe might be the best way to overcome the
\npresent crisis.<\/p>\n
After all, all the present miseries are caused by the shortage
\nof dollars. Our neighbor, Malaysia, adopts the controlled forex
\nsystem, which seems to succeed magnificently, because the ringgit
\nremains stable at RM3.8 per dollar with only minor fluctuations.<\/p>\n
Of course, such a system also has its drawbacks, as it will
\nencourage unscrupulous persons to use their usual sly tricks to
\nstash away foreign capital abroad. For example, some of them do
\nthis by under- and over-invoicing.<\/p>\n
For the uninitiated, the following simple explanation might be
\nuseful: 1) A exports to B in country C; the price agreed upon for
\ncommodity X is $100; B opens the Letter of Credit (L\/C) at $80
\nand $20 is kept abroad in A's account. 2) A imports from B from
\ncountry C; the price for commodity X is $100. A opens the L\/C at
\n$120 to B and B invoices accordingly, the $20 is kept abroad.<\/p>\n
A black market in foreign currencies might also be created.
\nBut if all the exporters and importers had a sense of patriotism
\nand are all imbued with the spirit of gotong royong (community
\nmutual help) to overcome the present crisis. Moreover this could
\nbe regarded as a token of gratitude to Ibu Pertiwi (Mother
\nEarth), who made all the exports possible. Heaven helps those who
\nhelp themselves.<\/p>\n
A. DJUANA<\/p>\n
Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/help-your-mates-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }