Chapter 402 Dialogue between Presidents

  The past year has been a year of joy and sorrow for the Indonesian government.

  After the Suharto regime began to conditionally open to the outside world, through the introduction of capital from developed countries such as the United States and Japan, the Indonesian economy has indeed achieved a leapfrog take-off for a period of time.

  But because of actively attracting a large amount of foreign capital, the foreign debt burden on the Indonesian government has grown rapidly in just a few years. To ease the pressure on bad debt, the Indonesian government is happy to see its currency devalued.

  So shortly after the collapse of the Thai baht, Suharto said in a speech that the current monetary tightening policy implemented by Indonesia would harm the interests of the poor and the middle class and increase the economic burden on Indonesia. The implication was to encourage the depreciation of the Indonesian rupiah.

Because according to the previous agreement on the introduction of foreign capital, the depreciation of the Indonesian rupiah means the shrinking of the US dollar debt. This is a situation that the Indonesian government is very happy to see. For this reason, they did not hesitate to lower interest rates, invest funds in the stock market to support the market and issue additional banknotes. .

   But unfortunately, once the Indonesian rupiah starts to depreciate, the impact on investor confidence is beyond the government's control. As a result, when the Indonesian rupiah fell to around 3,000 points, the Indonesian government changed its tone and strongly condemned speculators for currency speculation.

  The market is no longer under the control of the Indonesian government, despite Indonesia's important position in ASEAN. Soon, the stock market in Jakarta completely collapsed, and the market value of the stock market was wiped out. The price of many stocks was even lower than the par price, not even one-fifth.

  The stock market, destroyed by the collapse of confidence, has completely lost its financing function. Companies that rely on listing financing are finished, closing their doors one after another, or going bankrupt and liquidated. Large companies struggled to survive, and began to lay off employees and cut wages on a large scale. Small companies soon closed their doors before seeing the dawn.

  The unemployment rate has increased, the number of homeless people has increased, the middle class has been wiped out, and even some of the richest people on the rich list who rank among the top richest in Southeast Asia based on market value alone, many of them have gone bankrupt.

  Due to the extreme economic downturn, social conflicts have surged. People have taken to the streets, targeting the Suharto government, including Tommy. But Suharto is still in power because he has an army.

   But how long this kind of life can last, even Suharto, who has been hiding in the presidential residence, has no idea. Now his thinking is, it's a day if he can survive one more day, anyway, he doesn't have a good life for long.

  My deteriorating physical condition, coupled with the covetousness of local forces, and heavy economic pressure, have already overwhelmed this old man who is over sixty years old. Of course, these are the official statements later. In fact, although he is unable to solve the economic difficulties, he definitely does not lack the means to find a scapegoat.

   This situation of inaction was not completely broken by Suharto himself until a phone call from US President Clinton.

  The United States, which is far away in the Western Hemisphere, has always held a noncommittal attitude towards the currency crisis in East Asia, and even acquiesced to a certain extent. First of all, there is a factor of American capital. In fact, this Southeast Asian currency crisis and the subsequent financial crisis and economic crisis were all initiated by a think tank in Congress. Naturally, they will not take the initiative to intervene; the second reason is that these countries are too close to Japan. In addition to the geographical distance, they are more connected with Japan in terms of economic form, policy formulation, and import and export trade. close.

  94 bond crisis, Americans have already calculated this debt to the Japanese, so they did not hesitate to fight a protracted trade war with Japan. Although the United States claimed to have won in the end, due to the bond crisis pervading Europe and the United States, a large part of the international hot money turned to Southeast Asia, which had higher returns on investment and lower risks (at the time).

  This is unbearable! Absolutely can't bear it!

  When the Asian currency crisis was only the currency crisis in Southeast Asia, the US government began to pay high attention to this region. Some of this attention was realized through the IMF, and some of the senior officials of the US government directly came forward. As for the current Indonesia, President Clinton personally called Jakarta.

  As the northernmost end of the Asian defense chain, South Korea directly borders Red North Korea. Its location is not unimportant, but it is such a strategic buffer zone. When the president asked Washington for help, the US government politely refused. As for Indonesia, although it is the largest country in ASEAN, its geographical location and marginal political importance are undoubtedly much lower than that of South Korea, but why can it receive such high treatment?

  There is no other reason. Most of the production workshops invested by the United States in Southeast Asia are located here. Once the economic situation here continues to be unstable or continues to deteriorate, it may be affected along with the American economy.

So after receiving Condesu's request for help, President Clinton just discussed with his staff for half an hour, and regardless of the time difference of half the world, he called Suharto when Indonesian time was close to midnight. An old man who is over sixty years old.

   "Mr. President, hello! I am Bill Clinton, the President of the United States of America. I am very pleased to be able to speak with you."

   "Hello, Mr. President. Thank you very much for your call. Regarding the topic you mentioned, my team and I have not yet reached a unified opinion."

  Suharto's voice on the phone was a little tired. The phone rang in the early hours of the morning, which seemed a little cruel to him. Fortunately, after the person in charge of diplomacy connected, he first notified the President's Office. Before Suharto had a personal dialogue, his team had already discussed the topic and countermeasures.

  After the call from the U.S. side was connected, the U.S. side naturally informed the other party about the topic that the U.S. side wanted to discuss, that is, the IMF would suspend lending due to the Indonesian government’s policy of fixing the exchange rate, and the U.S. side came to help the two sides coordinate.

  Of course, these are superficial claims. In fact, both sides are well aware of what is going on. It is undoubtedly the United States that puts pressure on the Indonesian side to accept the conditions of the IMF. In exchange, the IMF will once again help Indonesia with financing.

   "If I remember correctly, in February, you once had a plan to fix the exchange rate, right? Although it has not been fully implemented, I have to say that your work is really impressive."

  In the Oval Office of the President in the White House, Clinton is propping his legs on his desk, talking absently into the hands-free phone. Behind the messy and complicated desks, several confidantes and aides were recording the content of the call nervously and orderly as if they were facing an enemy. The pens in their hands were writing rapidly, and every once in a while, there would be a A palm-sized piece of paper was delivered to Clinton.

"Last time, the time was immature. This time our experts thought the time had come, so we stopped hesitating." Suharto was a little stunned, but he was also a person who had experienced big storms. It is close to the top ten, so it is natural not to take the anecdote that Clinton said to heart, "The reason why we do this is also to stabilize the current economy. Although we have lowered interest rates and protected the market before, the effect is not good. Not obvious. Now it is implementing the supporting economic rescue measures required by the IMF, but the effect is not obvious in the short term. So we came up with this method, which is also a helpless move.”

"Really?" Clinton took the paper from the staff again, glanced at it casually, and showed a half-smile expression on his face, "If you continue to implement the loose monetary policy, I believe that no matter how much you consolidate the Indonesian rupiah, you will not be able to stop it. down, and because you're doing it now, you risk losing aid from the IMF."

"That's why we need your mediation!" Despite Suharto's advanced age, his reaction was not slow at all. He first pretended not to understand the subtext in Clinton's words, and then immediately hit the snake with a stick according to the literal meaning. "Indonesia is an ally of the United States, and none of its most important partners in Southeast Asia. Therefore, at this time, the United States needs to stand up and say a fair word for its friends."

   "..."

Clinton was at a loss for words immediately, and after five minutes of being stunned, he said again: "Yes, the United States and Indonesia are indeed allies, and we will naturally not sit idly by. Our original plan was to let the IMF intervene and let you give up the fixed exchange rate system. But now it seems that these are not enough to help Indonesia get out of the predicament, I personally suggest, including the Indonesian government, to accept the arrangement from the IMF.”

"Arrangement? What arrangement?" The other side of the phone was also stunned for five minutes. After fully listening to the opinions of his staff, Suharto continued, "According to what you mean, it will not even be the salary level of our civil servants." , you must accept the arrangement of the IMF, right?"

"That's right!" Clinton, who had already made up his mind, slapped his thigh and gave a thumbs up to several staff members who had been staring at him, "Indeed! Policies should also be included in the scope of supervision by the IMF. Even if necessary, the IMF will personally help Indonesia formulate fiscal policies. I think they have enough ability to get you out of the predicament in the short term!"

  Originally, the monetary policy was controlled by the IMF, but now the United States has opened its mouth to take away the fiscal policy. Is this our Indonesian government? Is Indonesia still an independent country?

  Suharto was born in the military. Although he has been in a high position for many years, the impulse in his bones is still the same as before. He suddenly slammed the table and refused directly on the phone. But the other party was obviously prepared, and only heard Clinton say on the phone in a shady way: "Mr. President, the friendship between the United States of America and Indonesia remains unchanged, but I can hardly guarantee that the US government and your personal friendship will be as good as possible." The friendship between nations is as strong."

  This sentence was like a slap in the face, and immediately calmed Suharto who was in a rage. The other party's words have been made very clear, whether he is in office or not, the situation of the United States intervening in Indonesia will not change. And if he intervenes in this situation, the United States does not mind considering a substitution.

   Having tasted the taste of power, no one thinks of taking the initiative to give in until it is absolutely necessary. This is a common problem of all dictators, and Suharto is no exception. When he heard that his biggest supporter even hinted that he might consider a replacement, how could he care about whether the country is independent or not, and whether the government has dignity and other issues?

After taking a deep breath, Suharto pretended to be relaxed and replied: "Mr. President, I can assure you that my personal feelings for the United States of America are as deep as the Mariana Trench. Regarding what you said I fully agree with everything, and my government will send a team to communicate with the IMF later, and I believe they will reach a consensus soon."

"Really?" Clinton, who was far away in Washington, also showed a smile on his face at the moment, "It seems that my coordination is still effective. I really thank God for giving me such a job, which makes me feel that I can still do something beneficial human affairs."

  The hypocrisy is so great that even though Suharto has practiced for decades, he can only be defeated at this time. After a few dry laughs in Jakarta, he hung up the phone with strong reluctance.

   "Damn, what is the Mariana Trench?" After confirming that the other party could not hear the conversation here, Clinton hung up the phone with a mutter, and roared at the staff who were looking at each other.

  (end of this chapter)