IMF vs CBS

In exact science, 2+2=4 and no one will argue about its correctness. But we cannot say the same thing about economics. It is said economics is a dismal science and that it is actually common knowledge made difficult. Let us take, for example, the currency board system (CBS), which presented to Indonesia by a professor of Johns Hopkins University. His theory was successfully applied to, among others, Argentina and Estonia when those countries experienced a monetary crisis.

However, according to local newspapers, there are economists in Indonesia who emphasized that such a system is not applicable to Indonesia, or that major reforms in other sectors must be implemented. And, to date, the debate about this system is still raging without any end in sight, even though eight months have already elapsed, and it is time that the people's confidence be restored.

The IMF has threatened to postpone channeling the promised US$43 billion in aid if the CBS is implemented, despite the fact that Prof. Hanke is a respected American scholar. If among the prominent citizens of Uncle Sam's country such a fundamental difference of opinion exists, what of Indonesia's public, which is anxiously waiting whether the CBS is implemented?

The Bisnis Indonesia daily, March 6, published a report that European Union spokesman Derek Fatchett stated that his side does not approve of the CBS. He said that first and foremost, the 50- point letter of intent as suggested by IMF must first be implemented before the CBS. The more I read about the CBS, the more confused I become. And as the saying goes: So many men, so many minds.

A. DJUANA

Jakarta