Indonesia Should Learn From Turkey, Not Emulate It
It’s fine for Prabowo to copy success. But Turkey’s lesson is one to avoid, unless he wants truly high inflation.
The vibe isn’t good/.
Photographer: Yasuyoshi Chiba/AFP/Getty Images
The replacement of Indonesia’s high-profile finance minister is starting to look a bit like regime change. President Prabowo Subianto has made no secret of his belief that much needs to change for economic growth to have a prayer of reaching the rapid clip he desires. Great care should be taken on the road there.
The central bank, for one, has bought into Prabowo’s agenda — to the point where the shock may become the norm. Last week’s interest-rate cut was anticipated by just two of 38 economists polled by Bloomberg. Fiscal policy, too, may slip guard rails that have served the archipelago well: The parliament, where the president's allies enjoy a big majority, will review a law that sets strict limits on the budget deficit and debt. One golden rule of politics, around the world, is don’t have a review unless you know the result you want.