The financial disaster that erupted in east Asia 10 years ago had a devastating impact on Indonesia as the economic contraction was the worst among all the affected countries. Indonesia experienced the entire range of economic crises, from an exchange rate collapse to a liquidity crunch and banking sector breakdown, leading ultimately to bankruptcy in the corporate sector. This paper reviews the social and economic costs of policy errors including the bitter experience with the International Monetary Fund, which, in fact, escalated the crisis. The efforts to bring an end to the imf programme were thwarted by the actions pushed by the new era economic group that deepened the dependence on international debt.
