Why is the rupiah weakening?
Why is the rupiah weakening?
From Warta Kota
Both economic players and ordinary people are seized with worry about the weakening rupiah. There is fear that the exchange rate of the rupiah will continue to drop against the U.S. dollar so that the price of daily commodities will likewise uncontrollably soar, as before.
This phenomenon is attributable to many causes, such as security, politics and the law. The latest example is the temporary closure of the Arun gas plant (in Aceh) because of poor security in the area. As a result, the government will sustain big losses because this export commodity is directly related to the government's U.S. dollar income.
Politics is obviously a factor causing the rupiah to weaken because it has to do with a number of government policies, including those in the economic and monetary areas. In the legal area, which should actually serve as the basis for security and politics, for example, President Abdurrahman "Gus Dur" Wahid allowed the flag of the separatist Free Papua Organization (OPM) and secessionist Free Aceh Movement (GAM) to be hoisted.
This decision made the security forces confused when having to deal with growing demands for independence in these regions. On the one hand, the security forces are accused of not being responsive and quick enough, while on the other, they are accused of violating human rights when they deal with insurrection in accordance with their institutional procedures.
The absence of legal certainty in the present transitional era has put people in an awkward position. So, now that GAM has been officially called separatist and has to be dealt with in accordance with the standing procedure, in other regions secessionist aspirations will be dampened.
The three factors referred to above greatly affect economic and monetary stability and are specially linked to the fluctuation of the rupiah. In this case, government regulation No. 1/1982, which has benefited speculators, is also an important factor.
Our rupiah has also weakened because the community has lost its confidence in the government as new crucial problems have continued to crop up. If this is the case, how can we expect the outside world to have confidence in our country despite the fact that Gus Dur has traveled round the world, purportedly promoting the country?
H. ASJARI
Depok, West Java