In the case of Indonesia, the crisis is not just an economic issue. Even though the IMF reform package has been cut almost all monopolies and opening the Indonesian market for foreign investors significantly, the market sentiment is not going into the right direction. It is an eruption of accumulated hazards associated with an opportunistic, unclean government and rent-seeking behavior from the elite private sector. Markets are still waiting for the implementation of the IMF reform package. Meanwhile, the government of Indonesia, under political and security pressure, during the presidential election, tried to overcome the crisis as soon as possible even though, later policies sometimes are contradictory with the previous ones (Prijono Tjiptoherijanto).
Many investors start to move their business out of Indonesia. This cause GDP of Indonesia drop tremendously. The unemployment rate of Indonesia increase due to investors start shifting their business to another country. Indonesia raises interest rates but lowers them from late August, as it devalues the rupiah on 14 August (Eshan Karunatilleka).
Indonesia government made notable progress in the business registration reform following the issuance of the policy package in order to reduce the number of requirements for registration by defining the maximum processing times. Issuing a new investment law in 2007 to stipulate the principle of equal treatment between foreign and domestic investors. Following the enactment of the new investment law, a new negative list was issued which specified areas closed to investment or open with restrictions, increasing restrictions on foreign direct investment in several sectors. In 2008, the minimum capital requirements for registration were almost doubled. In 2009, the government reduced entry costs by cutting fees (e.g. Company deed legalization fees, publication fees, and registration fees) and streamlined the process by introducing online services and eliminating certain licenses.
Philippine
http://aric.adb.org/pdf/aem/mar01/Mar_ARR_special.pdf
http://www.unescap.org/pdd/calendar/strengthening_responses/papers/Report_dhaka_final.pdf
http://www.bis.org/publ/bppdf/bispap54s.pdf
http://www.competition-regulation.org.uk/conferences/mcr05/carino.pdf
In the midst of the first moves towards trade liberalization and privatization, it drafted a constitution that continued the nationalistic philosophy of all previous basic laws, reserving to Filipinos vital areas of the economy and shielding them from the onslaught of the emerging globalization (Ledivina V. Cariño2).
The Philippines abandon its dollar-peg and imposes certain foreign exchange controls at July 1997. Overnight interest rates are raised in the Philippines to 32% at one point. The crisis has not resulted in any significant shift in the country’s policy toward FDI. In the Philippines, policy reforms of the early 1990s have made considerable leeway in improving the incentive structure for foreign investors. However, the poor state of domestic infrastructure, policy uncertainty, and lack of transparency in investment approval regimes are major stumbling blocks to greater global integration of domestic industry through FDI.
It expanded the peso repo facility, expanded a rediscount facility, reduced reserve requirements, and reduced policy rates. Monetary policy is too stable and strengthen public confidence in the financial market. It uses exchange rate policy to avoid volatility.
Adequate information disclosure practices and the implementation of banking reforms are now yielding fruit, particularly in terms of better risk management and consolidated supervision. These have contributed to the limited impact of the sub prime crisis on Philippine financial markets (Diwa C Guinigundo).
Vietnam
http://www.odi.org.uk/resources/docs/3902.pdf
http://mpra.ub.uni-muenchen.de/1921/1/MPRA_paper_1921.pdf
http://publi.cerdi.org/ed/1998/1998.16.pdf
http://www.eai.nus.edu.sg/BB447.pdf
Vietnam’s international trade has increased substantially and Vietnam has managed to attract a large inflow of inward foreign direct investment (FDI) during the last two decades (Le Dang Doanh 2002, Dollar 1996; Dollar and Kraay 2004). The policy of pegging the Vietnamese currency vis-à -vis the dollar was explained by the large dollarisation of the Vietnamese economy. Indeed, the risk of exchange rate instability, and namely the risk of a sharp depreciation of the national currency, is high under a floating exchange rate system in a dollarised economy, because of the permanent trade-offs made by economic agents between holding national and foreign currencies. In retrospect, this policy of pegging the dong to the dollar seems wise, since inflation was broadly controlled.
The government carried out a tight fiscal policy with different measures such as cutting down public expenditure to further reduce the budget deficit; reducing public investment, especially investments of state-owned groups and enterprises; and giving priority to investment in economic sectors. The government also took decisive and consistent measures on monetary tightening to effectively control inflation and stabilize the macro-economy. From October 21, 2008 to January 23, 2009, SBV cut its benchmark interest rate six times from 14% to 7% per annum. The refinancing rate and discount rates were reduced to 8% and 6% per annum respectively. The reserve requirement level was also lowered by 1 percentage point for VND and 2 percentage points for foreign currencies.
On December 11, 2008, the Vietnamese government released Resolution 30/2008/NQ-CP on urgent measures to deal with the economic recession, maintain economic growth and ensure social security. On social security policy, the Vietnamese government decided to launch an unemployment insurance scheme with effect from January 1, 2009. On February 24, 2009, the Vietnamese government decided to provide interest-free loans to enterprises for paying salaries, social insurances and unemployment subsidies for their workers (LE Thi Thuy Van).
