Financial crisis: World round-up

BBC correspondents reflect on economic confidence levels and fear of crisis from countries around the globe.

Indonesia is something of a novel position. In the midst of a global financial crisis, the largest economy in South East Asia is actually doing quite well. For a start, it has 250 million domestic consumers and a lot of its growth is driven by them – not customers abroad.

Secondly, a good deal of its economy – agriculture and services, for example – is not linked to what is happening on Wall Street. And neither are its banks exposed to the crisis in the way those in the major economies are.

A trading screen in Indonesia
Memories of the crash in the late 1990s has left investors in Indonesia jittery
All this means Indonesia’s economy is pretty well-insulated from the meltdown in the US. But it is still eyeing the current financial crisis with a good deal of trepidation, and rightly so.

Ingrained nervousness amongst investors here means there does not have to be much wrong for people to start panicking.

Earlier this month there was panic at the stock exchange after some foreign investors began pulling their money back home, some 20% was wiped off share prices in just a few days of trading.

That panic was largely because Indonesia already knows what financial crisis feels like. Ten years ago, foreign money fled this country, and two other so-called “Asian Tigers”, as the exchange rate collapsed.

Recovering from that blow has taken many years and billions of dollars from the International Monetary Fund (IMF).

But after ten years of new safeguards and banking reforms, Indonesia is in a more solid position. Its economy is predicted to continue growing at around 6%, and it’s the world’s major economies that are now facing the brunt of the storm.

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