Indonesia: bad politics meets a good economy

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August, 2013
Maria Monica Wihardja
Indonesia came out of the 2008–09 global financial crisis fairly unscathed; its banks only had to deleverage themselves from a small portion of debt. But now its strong position is in danger: government meddling could cause a good economy to go bad. The government should eschew populism and fix Indonesia’s structural issues, including burgeoning fiscal subsidies and inward-looking trade policies, which pose a big threat to the country’s financial and monetary stability.
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