IMF vs CBS

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