Lesson from Mexico<\/p>\n
Although Indonesia's economy is in better shape than Mexico's,
\nprudence is still needed in handling the economy. This is the
\nimportant message we get from Finance Minister Mar'ie Muhammad.
\nWe would like to add that we also have to learn from the Mexican
\ncrisis.<\/p>\n
Economic crisis befell that country in the 1980s. The price of
\noil, its major export commodity, dwindled. Mexico failed to
\nservice its foreign debt. Its economy entered a prolonged
\nrecession.<\/p>\n
Only through prudent economic reform, belt-tightening and
\nforeign loans did the country manage to overcome the crisis, in a
\nperiod of ten years.<\/p>\n
Praises were heaped on Mexico and more foreign loans flew in
\nafter it joined NAFTA with the United States and Canada. It
\nmanaged to tone down inflation from 150 percent to 15 percent.<\/p>\n
Exports increased but imports, mostly luxury items, proved to
\nbe bigger. In the last seven years exports rose only 25 percent
\ncompared to import's, 400 percent.<\/p>\n
There was no action taken when its peso was depreciated
\nseverely against the dollar. When President Emesto Zedillo Ponce
\nde Leon, finally took the devaluation measure last month, it was
\ntoo late already.<\/p>\n
This is apparently the message behind the minister's
\nstatement. He also said that a credibility crisis befalling the
\nfinance authority in the country is one of the trigger factors
\nbehind the crisis.<\/p>\n
-- Kompas, Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/lesson-from-mexico-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }