Indonesia prices die

A few months before the 1997 crisis around the world including the World Bank and IMF praised East Asia's economic achievements, including Indonesia. It is even said that the economy of this country is fundamentally healthy and strong. "Indonesia's economic fundamentals, basically sound," said IMF Managing Director Michael Camdessus, October 1997.
Domestic officials, including the mass media, have also prided themselves on the nickname of "New Tigers of Asia", while not forgetting to stage economic development with some standard parameters such as growth rate figures, gross domestic product (GDP), inflation rate, etc. .
But it turns out, all the achievements are proud of such a meaningless when the exchange rate of Rupiah against US Dollar fell falling on the international currency exchange. Tubs of rice paddies that are proudly boasted farmers, then suddenly ravaged by a wave of flood disrupted. Coupled with the political turmoil in Indonesia that is increasingly severe to the monetary economic turmoil in Indonesia .. all policies that were initially proud of the whole society become meaningless and then became a new history which adds to the evidence that the political turmoil and regulation of the monetary economic turmoil is very influential and the two things can not be separated aeakan be one unified whole.

1. Understanding of Politics and Regulation
   According to Ibn Khaldun and Thomas Hobes in the book Abdulwahab-Al-Affendy (1998: 9-10) Politics is related to power within a country. Power arises in three ways:
2. Power because of the strong physical, or identical law of the jungle where the strong will control the weak in a colony.
3. Power because of rational thought, ie consideration of thinking like good or bad, prosperous or not, what profit and loss and so forth.
4. Power because of the effort to get a good life expectancy in the world and hereafter.
   So the culmination of the sense of power according to Ibn Khaldun and Thomas Hobes is the truth. The essential political notion is that every effort to achieve power should be used in upholding the truth.
   According to the book Abdul Muis (2000: p.6) Politics is all the efforts done smartly, smartly, cunningly in order to control the people and the state.
   Political endeavor will produce power, the leader in power will carry on all the regulations called the Regulation. The full definition of the regulation is:
   According to Prof. DR. Isang Gonarsyah (2001) PPs-IPB, regulation is "a conscious effort by individuals or groups of individuals to influence attitudes of other individuals or organizations. The nature of regulation seeks to limit the behavior of one person or group.
   According to Stigler regulation is the government's response to regulatory requests by groups of people or layers of society so that their interests are fulfilled although sometimes harming other groups.
5. Understanding of Monetary Economy
   Monetary economics is the economy that discusses the circulation of money, exchange rates, interest rates, stock price index, price policy, inflation rate and others. In this paper only will be discussed some of the above monetary indicators as follows:
   a. Understanding of the Exchange Rate of Rupiah against Foreign Currency (Foreign Exchange Rate)
   Trading conducted between two countries is not as easy as done in one country, because it must use two different currencies such as between Indonesia and the United States. American importers must buy rupiah to buy goods from Indonesia. Conversely, Indonesian Importers must buy US Dollars to settle payments for goods purchased in America. According to Sadono Sukirno (1976 p.292), the amount of currency required to obtain a unit of foreign currency is called the foreign exchange rate.
   The magnitude of the desire to obtain a currency in the study of this paper is not to save it but to be used to pay for the purchase of goods from abroad, then the nature of demand is closely related to the nature of demand on goods from abroad, if the prices are more expensive then the demand is reduced or vice versa, if the prices are cheaper then the demand will increase.
   Some important factors that have an influence on the exchange rate changes according to Sadono Sukirno (1976 p.296) are: 1. Changes in the taste of society. If the population of a country prefers goods from other countries then the value of foreign currency will increase.
6. Price changes of exported goods. The higher the price of the goods to be exported, the lower the value of the exporter currency.
7. Increase in general prices (inflation). The higher the inflation rate of the exporting country decreases the value of the country's currenhanamangshbsbsbcy.