Indonesia’s management of the crisis:
In the 1997 financial crisis,
Indonesia's short term loans to foreign reserves was at 175 percent
but in this crisis, it is much stronger and standing at 34.5 percent.
Analysts argue that the state can safely finance its short-term
The central bank is also downplaying
the possibility of a crisis, raising its benchmark interest rate by
25 basis points for six straight months, to 9.5 percent, signaling to
market players that the economy is not going under.
A consistent rise in the BI rate would
indicate the central bank was in firm control and guard the economy.
BI would monitor the volatility of the rupiah against the dollar,
based on global trends.
In case of emergencies, some groups
have urged the Indonesian government to create a social safety net
and provide incentives for exporters and raising the deposit
insurance limit from Rp 100 million ($10,325.25) to Rp 250 million.
Malaysia’s management of the crisis:
Tan Sri Second Finance Minister Nor
Mohamed Yakcop pointed out that Malaysia did not experience a banking
crisis because it was in a different environment from the U.S. and
Europe due to the country's strong banking system with low
non-performing loans and a high risk weighted capital ratio.
Malaysia has also diversified its
economy with exports contributing less than 20 percent of the growth
while domestic consumption and investment have become a major engine
of growth and it was producing more good to China (increased to 9%)
and India. Malaysia is banking on China and India sustaining their
However, just to be safe, Nor Mohamed
said Malaysia needed a social safety net was taking care of those who
may be vulnerable and that Malaysians need to remain calm and
confident about their country’s future.
According to Nor Mohamed, Malaysia may
find opportunities in the crisis, particularly in Islamic banking as
funds from the Middle East are losing money in the U.S. and Europe
and encouraged to come to Malaysia which is one of the strongest
Islamic banking centres in the world. Middle East investors could
also invest in infrastructural development projects in Malaysia
instead of buying assets in the U.S. and Europe which have already
lost much in terms of value.
Philippines’ management of the
Bangko Sentral ng Pilipinas (BSP)
Governor Amando Tetangco Jr.noted that moves by the developed
countries’ central banks have stimulated the BSP in similarly
slashing interest rates whenever needed in the future. BSP Deputy
Governor Diwa Guinigundo says the Filipino central bank will hold
steady for now. There are fears that the peso might weaken further if
they cut rates too soon.
The central bank kept its key interest
rate, the overnight borrowing rate, on hold at 6.0 percent during a
crucial monetary policy setting, ending a cycle of monetary
tightening that had jacked up the rates by a total of 100 basis
Filipinos are urged to continue to
trust in their country’s own resilience and economic fundamentals.
Singapore’s management of the crisis:
Mr Lim Swee Say, who is the Secretary
General of the National Trades Union Congress (NTUC), has urged
companies in Singapore to find ways to cut costs and upgrade their
operations, to retrain workers while the government would step in
with non-wage support, such as Growth Dividends and Workfare Income
Supplement. At the core of Singapore’s strategy is managing wage
increase to help make Singapore's economy competitive.
Mr Lim promised that the Singapore
government, labour movement, the tripartite partners will continue to
keep in close touch with the ground, (and) when necessary, will
support workers, in particular, the lower-wage workers and lower
income households through non wage measures.
Bernama, “Malaysia To Continue
Registering Growth, Says Nor Mohamed” dated 9 October 2008 in
Bernama website [downloaded on 12 Oct 2008], available at
Channelnewsasia, “Labour chief says
retrenchments likely if global downturn continues” dated 9 October
2008 in Channelnewsasia website [downloaded on 13 Oct 2008],
Dumlao, Doris, “BSP views greater
monetary flexibility” dated 9 October 2008 in Philippine Daily
Inquirer website [downloaded on 13 Oct 2008], available at
Suharmoko, Aditya, “Indonesia far
from crisis, say analysts” dated 9 Oct 2008 in the Jakarta Post
website [downloaded on 9 Oct 2008], available at