More to Life Than Inflation? Indonesia Is Just Asking
In an era when hawkish central-bank credentials are everything, a big emerging market contemplates other priorities.
University students protest rising prices.
Photographer: Ed Wray/Getty
These are inauspicious times to be challenging the primacy of fighting inflation. Yet that is precisely what Indonesia, an emerging market icon that constantly frets about the strength and durability of capital flows, is contemplating. It doesn’t have to end in tears — if managed well.
With consumer prices escalating around the world, it’s a brave nation that asks its central bank to do much more than contain the cost of living. Policy makers have been chastised for not acting sooner, and more forcefully, to rein in inflation. Ominous noises are rumbling in Britain, Australia, New Zealand and Canada about altering mandates to sharpen the focus on prices. Would it be a tragedy if a big developing country struck out in the opposite direction?