Jakarta. Former Finance Minister Fuad Bawazier said the current depreciation of the rupiah should not be compared with the economic crisis that struck Indonesia in 1998, arguing that the country’s economic fundamentals remain significantly stronger today.
According to Fuad, one of the clearest differences between current conditions and the 1998 Asian financial crisis is the performance of the economy itself. While Indonesia suffered a deep economic contraction during the crisis, the economy is still expanding despite recent pressures on the rupiah and growing global uncertainty.
“The situation today is very different from 1998. Back then, GDP growth had already fallen to negative 13%,” Fuad said during a discussion in Jakarta on Thursday.
Indonesia’s economy, by contrast, continues to record positive growth.
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“Today, growth is still positive at around 5% or more. The important thing is that it remains positive,” he said.
Fuad, who served briefly from March 16 to May 21, 1998, during Soeharto’s final months in office, argued that sustained economic growth demonstrates the resilience of Indonesia’s economic foundations compared with the conditions that prevailed during the Asian financial crisis.
In 1998, the economy contracted sharply and remained in negative territory for an extended period, inflicting severe damage across nearly all sectors of the economy.
“Back then, economic growth was negative for about two years. That fact alone shows how different the situation is today,” he said.
Fuad, 76, said the public should avoid equating the current weakness of the rupiah with the 1998 crisis because Indonesia’s key macroeconomic indicators remain relatively stable.
The rupiah has come under pressure in recent months amid heightened global uncertainty, geopolitical tensions, and concerns over domestic fiscal policy, prompting comparisons with previous periods of financial instability.
However, Fuad stressed that current economic conditions remain fundamentally different from those experienced during the Asian financial crisis, when a collapsing currency was accompanied by a deep recession, widespread corporate failures, and severe financial-sector distress.
Nevertheless, he cautioned that policymakers should remain vigilant against external risks that could affect economic stability, including geopolitical tensions and volatility in global commodity markets.
“The most important thing is that the economy is still growing and remains in positive territory. That is what distinguishes the current situation from the 1998 crisis,” Fuad said.
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