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Indonesia 1966-70: Economic Management and the role of the IMF

Working papers

This Working Paper provides a case study of the role of the IMF in economic management. It differs from other current ODI studies in that it is an historical study concluding approximately at the period when the others commence. There are three reasons for its relevance. First, it provides an intrinsically interesting example of a successful anti-inflation programme and demonstrates that stabilisation can be achieved even when starting from a position of acute disequilibrium. Second, it illustrates the close interplay of economic and political factors in stabilisation attempts and re-emphasises that firm government commitment to a stabilisation programme is a pre-requisite for success. Third: since the role of the IMF in supporting, the stabilisation programme; in the negotiations on re-scheduling Indonesia’s foreign debt; and in securing foreign assistance; was significant, it allows analysis of the extent and nature of Fund support in this pre-oil crisis programme.

Mary Sutton