Calculating the risks

Calculating the risks

It is still difficult at this point to say whether the
government will go ahead with the implementation of the currency
board system. So far, the government has allowed the public
debate on the system's merits to develop. This is positive since
an open debate can occur between supporters and opponents of the
system. At the same time, Steve Hanke, the system's architect,
continues to elucidate the concept's merits to various parties.

For the government, the policy options and the time available
to solve the current crisis are limited indeed, especially
considering the growing opposition among international
institutions against the establishment of such a currency board
system. The question in this regard is not whether we should bow
to such pressures, but if we are ready to shoulder the
consequences and risks involved in the event we do adopt the
board system.

If we are indeed ready, a clear explanation must be given to
the public of whatever scenario is planned to deal with those
risks. Clearly, the public has the right to know what options are
open before any new concept is implemented.

Only by such a clear explanation can the public be convinced
that the option chosen is indeed the best there is for us to
attain the higher goal we are striving for. The public's support
will be easier to ensure when people recognize the problems that
they are faced with. This is important, since whatever the
monetary policy that is adopted, the support of the public -- or
in a narrower scope, that of the market -- is decisive.

-- Republika, Jakarta