It is now a decade since the 1997 economic crisis hit Indonesia. Sparked off in neighbouring Thailand, the crisis was so deep and widespread that it was not until 2004 that the Indonesian economy was able to achieve a fully fledged recovery.
Moreover, the economic reforms implemented under the IMF programme from October 1997 to 2003 made recovery efforts take longer than in other countries affected by the crisis. However, thanks to sound macroeconomic policies, financial sector restructuring and structural reforms, economic recovery eventually came to fruition.
The deterioration of the social, economic and political environment – a consequence of the crisis – has also gradually been reversed. The economic crisis induced fundamental changes in the Indonesian economy, in the financial and non-financial sectors alike. In 2003, the country was able to graduate from the IMF programme.
Supported by a strong foreign exchange reserves position, the Indonesian economy was able to bring forward the debt repayments owed to the IMF; and by October 2006, the country was able to repay the remaining debt of US$3.75 billion.