Well, i am not an economic expert. Therefore I’ll write from the perspective of a traveler who needs to exchange rupiah to other currencies and also as an entrepreneur. Many people said lately that the Rupiah is weakening due to the strong dollar. Other countries in the world face the same impact. It’s true, but there is more. The rupiah is not only weakening towards the Dollar. It’s actually weakening towards almost all currencies in the world. Look at the graph to understand how massive the rupiah is going down to for example the Euro or SGD. Look here to see other currencies.
Yes, other countries’ currencies are also weakening towards the dollar. But the mutual exchange rates between those currencies stay stable while the value of our rupiah is declining globally. The only exceptions are those countries that suffer a severe crisis like Turkey, Venezuela and India.
Why does the Rupiah get KO? It's actually pretty simple, our exports continue to decrease, and our imports are increasing. Entrepreneurs are confronted with very high prices for energy. This is due to mismanagement of PLN Perusahaan Listrik Negara (State Electricity Company). Especially production facilities are hit by the expensive electricity. Turnovers were already fallen because they fight a price war against the dump of Chinese products. Their profitability is further going down. Many make losses.
The agriculture sector is also struggling. Our farmer’s productions make a low price while we pay high prizes for import of agriculture products. . If we would buy the products of local farmers while holding the same price levels as we accept for import products then surely our farmers do much better. Their lives will improve; they get more money to spend. It will at the end help our rupiah as well.
Double taxes for energy-efficient hybrid cars, the old school rules are updated too late. As a result, there is still a lot of fuel imports needed. If we would have given incentives to use energy-efficient cars in a much earlier stage, surely our fuel imports were not as high as they are now. The average hybrid car saves 25% or more energy, based on data. These are just some reasons that contribute to the current situation. There are more of course.
It's happening this very moment. Rupiah is KO, and they try everything to stop the situation from getting worse. Restriction of luxury goods, mix the diesel fuel with palm oil/biodiesel. New measures will soon follow because the situation is panicking. A funny thing is, the Government asks the entrepreneurs to release the dollar. They say to us, don't hold it back. Of course we are unwilling because businesspeople have been in very difficult situations caused by the government.
Government say that we don’t love Indonesia if we keep the dollars. I believe it’s the other way around though. If there is love for Indonesia and you want a strong rupiah then you MUST support local businesspeople/entrepreneurs. It’s that simple. Whereas since last year economists have warned to be prepared well because an unpredictable and uncertain economic future. But instead of a good preparation the advice was refuted and the experts set by side as rebellious people.
Now it turns out that the disaster is really happening. Government might understand that the experts were very right. I really hope that our government learned a lesson. Take the warnings and advices of the experts seriously. They deserve to be considered when taking new decisions. Don’t consider warnings and advices as a plot or an expression of hatreds. The supporters have to be realistic as well and accept the current situation. We know that the rupiah has fallen and of course we need to come with a defense. For those not 'pro with the government, bring not just the bad. Bring out your critics fair and with justice. That makes the image of critics better and more positive. Criticism is not based on hatred but on love. Criticism is present because of caring for our country. It should never ever be out of hate.
Don't forget to spread love and good words.