Krisis Ekonomi Terparah Indonesia Karena Cetak Uang Kebanyakan - PART 02 | 1961-1965

Ngomongin Uang

23 Apr 202110:29

Summary

TLDRThis video, hosted by Luna on the 'Ngomongin Uang' channel, is a continuation of a previous episode on the 'Inspect History' channel, exploring Indonesia’s economic crisis from 1961 to 1965. It highlights how military spending on campaigns like Trikora and Dwikora, along with massive infrastructure projects, led to government deficits. The government's solution—printing more money—triggered hyperinflation, with inflation reaching 594% in 1965. The video covers the impact of this economic mismanagement on daily life, how the crisis worsened, and touches on the political shifts that followed.

Takeaways

💬 This video continues from part 1, which discusses Indonesia's post-independence conflicts, leading to economic challenges.
⚔️ Military spending became a major burden on the national budget, with operations like Trikora (West Irian) and Dwikora (Malaysia confrontation) draining government funds.
💰 Indonesia received significant military aid from the Soviet Union and the U.S., leading to the nation having one of the strongest militaries in the Southern Hemisphere at the time.
📉 Despite military strength, Indonesia’s economy declined in the 1960s, with exports like rubber dropping significantly due to falling prices and international tensions.
🚫 Economic embargoes, particularly against Malaysia, worsened Indonesia’s export crisis, making it difficult to find new markets for rubber and tin.
🏗️ Huge national projects, like the construction of TVRI, Monas, and Gelora Bung Karno, took priority over essential infrastructure in rural areas, adding to financial strain.
💸 To cover rising costs, Indonesia printed large amounts of money, causing rampant inflation. Between 1962-1966, the money supply increased 150-fold, leading to hyperinflation.
📈 Inflation peaked at 594% in 1965, making basic goods like rice and eggs unaffordable and leading to widespread scarcity.
🔨 Measures such as price controls and wage payments in rice failed to resolve the crisis. Even redenomination of currency (Rp1000 to Rp1 in 1965) couldn't stop the economic collapse.
📉 Inflation finally began to stabilize after the government stopped printing money, but this happened only after significant political changes, including the fall of Sukarno.

Q & A

What historical events does the video discuss that contributed to Indonesia's economic crisis in the 1960s?
-The video discusses multiple historical events, including military campaigns such as Operation Trikora for the liberation of West Papua from the Dutch and Operation Dwikora or the 'Crush Malaysia' campaign. These, along with internal rebellions like Permesta in Manado and DI/TII, significantly drained Indonesia’s national budget, leading to a severe economic crisis from 1961-1965.
How did Indonesia's military expenses impact its economy in the early 1960s?
-The government allocated a large portion of its budget to military spending, especially for campaigns like Trikora and Dwikora. Indonesia also purchased advanced weaponry from the Soviet Union, contributing to a massive budget deficit. This heavy military expenditure left little for social welfare and economic development, leading to economic instability.
What role did export commodities, such as rubber, play in Indonesia’s economic crisis during the 1960s?
-Rubber was Indonesia's main export commodity during this period. However, the international price of rubber dropped by 50% in the early 1960s, causing a significant reduction in export revenue. Other commodities like copra, tea, tobacco, and tin also declined, further straining the country's economy.
What was the impact of Indonesia's 'Crush Malaysia' campaign on its economy?
-The 'Crush Malaysia' campaign led to an economic embargo against Malaysia, which was one of Indonesia's primary markets for exporting rubber and tin. As a result, Indonesia struggled to find new buyers for these goods, further reducing export income and worsening the economic crisis.
Why did Indonesia's infrastructure outside Java remain underdeveloped during the 1960s?
-While the government invested heavily in high-profile projects like the TVRI station, Monas, and the Gelora Bung Karno stadium, basic infrastructure in other regions remained neglected. Many areas outside Java lacked paved roads, ports, and markets, preventing balanced economic development across the country.
What was the effect of large-scale money printing on Indonesia's economy during the 1960s?
-In an attempt to cover budget deficits, the government printed massive amounts of money, causing hyperinflation. The money supply increased 150-fold between 1962 and 1966, leading to a drastic drop in the value of the currency. This resulted in skyrocketing prices for basic goods and a near-collapse of the economy.
How did Indonesia’s inflation in 1965 compare to other significant periods of economic crisis, such as the 1998 financial crisis?
-In 1965, Indonesia's inflation rate reached an astonishing 594%, much higher than the 78% inflation rate during the 1998 financial crisis. The hyperinflation of the 1960s was the worst in the country’s history, causing widespread economic hardship.
How did the Indonesian government attempt to control the hyperinflation of the 1960s?
-The government tried several measures, including price controls, paying employees partially in goods like rice, freezing 90% of bank deposits, and redenominating the currency by knocking off three zeroes. However, these measures were ineffective because they did not address the root issue of the budget deficit.
What finally helped to stabilize Indonesia’s inflation crisis in the late 1960s?
-Inflation began to stabilize when the government stopped printing excessive amounts of money, which had been the main driver of hyperinflation. This move helped to restore some balance in the economy, though it took time for the effects to be fully felt.
How does the video suggest viewers can engage with the history of the 1960s economic crisis in Indonesia?
-The video encourages viewers to reflect on stories they might have heard from older family members who lived through the 1960s crisis. It also directs viewers to the YouTube channel 'Inspect History' for more in-depth content on this period, and to follow upcoming videos for further exploration of Indonesia’s economic history.

Outlines

00:00

📜 Post-Independence Struggles and Economic Challenges

Luna introduces the video as a continuation of a historical series discussing Indonesia’s post-independence period. After gaining sovereignty, the country faced internal conflicts, like regional uprisings (Permesta, RMS, DI/TII), and external challenges, such as reclaiming West Irian from the Dutch. The heavy focus on military spending during the Trikora and Dwikora operations severely strained the national budget. Indonesia even received significant military aid from the Soviet Union and the U.S., making its military one of the strongest in the southern hemisphere. However, while military power grew, the economy worsened as exports like rubber, Indonesia's main commodity, suffered. The confrontation with Malaysia (Konfrontasi) and large infrastructure projects in Java also drained the budget, leading to a nationwide economic crisis.

05:04

💰 The Central Bank's Fall and Hyperinflation

The government resorted to mass printing of money to cover military and infrastructure spending, causing a massive inflation crisis. The Central Bank lost its independence in 1957, leading to uncontrollable money circulation from 1962-1966, with the money supply increasing 150 times. Inflation reached an astonishing 594% by 1965, devastating the population. Despite everyone having more money, prices for basic goods like rice and meat skyrocketed, making daily life unbearable. Hyperinflation led to widespread shortages, with people rushing to spend their rapidly devaluing money. Even government measures such as price controls, freezing bank accounts, and redenominating currency failed to resolve the situation, marking this period as Indonesia's worst economic crisis.

10:06

📉 Efforts to Tame the Economic Crisis

Various government attempts to stabilize the economy failed to address the core problem of a massive budget deficit. These efforts included drastic measures like stopping money printing, controlling inflation, and fixing basic commodity prices. The video hints at the upcoming political changes that followed this period, notably the fall of Sukarno and the rise of Suharto’s New Order. The narrative is left unfinished, with viewers encouraged to watch the next part on Inspect History’s channel for more insights into how the crisis was managed and how Indonesia eventually regained economic stability.

📺 Stay Tuned for More Financial Stories!

Luna wraps up the video by inviting viewers to subscribe to the Ngomongin Uang channel for more engaging stories about finance, investment, and business. She teases future content and encourages viewers to engage by sharing their family stories about how they coped during the economic crisis of the 1960s. The video promotes a continuous conversation about money and economics, reflecting the channel’s theme.

Mindmap

Keywords

💡Krisis Ekonomi 1960-an

The economic crisis in Indonesia during the 1960s was one of the worst in the country's history. It resulted from a combination of military spending, poor economic management, and a reliance on printing money to cover budget deficits. Hyperinflation, unemployment, and severe shortages of basic goods were direct consequences of this crisis, as described in the video.

💡Pemberontakan Daerah

Regional rebellions, such as Permesta in Manado and the RMS in Maluku, were significant threats to national stability in post-independence Indonesia. These uprisings consumed a large portion of the government budget, diverting funds from economic development, and contributed to the growing national financial strain.

💡Operasi Trikora

Operasi Trikora was a military operation launched by Indonesia to take control of West Irian from the Dutch. The operation significantly increased military expenditures, contributing to the national budget deficit. It reflects Indonesia's priority on national sovereignty over economic stability at the time.

💡Operasi Dwikora

This military campaign, also known as the 'Crush Malaysia' campaign, was aimed at opposing the formation of Malaysia. Like Operasi Trikora, it was costly for Indonesia, draining resources and exacerbating the country’s economic problems. This operation is highlighted as a key factor in Indonesia's 1960s economic downturn.

💡Inflasi

Inflation refers to the rapid increase in prices that occurred during the 1960s in Indonesia. The video explains that inflation peaked at 594% in 1965, driven by excessive money printing to finance military operations and large national projects. This hyperinflation made everyday goods unaffordable for most citizens.

💡Defisit Anggaran

The budget deficit is the gap between government spending and revenue. In the early 1960s, Indonesia's spending, particularly on military operations and large infrastructure projects, far exceeded its income, leading to a massive deficit. The inability to manage this deficit was a core issue leading to the economic crisis.

💡Pencetakan Uang

Indonesia’s government resorted to printing large amounts of money to finance its budget deficit. The uncontrolled issuance of currency between 1962 and 1966 caused inflation to soar and drastically reduced the value of the rupiah. This is a central theme in the video’s explanation of Indonesia’s economic collapse.

💡Proyek-Proyek Raksasa

Large-scale national projects such as the construction of the Gelora Bung Karno stadium, TVRI, and Monumen Nasional were prioritized by the government, even though basic infrastructure in many regions was severely lacking. These projects, while symbolically important, contributed to the economic strain, as highlighted in the video.

💡Kampanye Ganyang Malaysia

The Ganyang Malaysia campaign was a politically motivated effort by Indonesia to oppose Malaysia's formation, which led to military confrontations and an economic embargo against Malaysia. This strained Indonesia's trade relations and worsened its export economy, particularly affecting the rubber and tin industries.

💡Hiperinflasi

Hyperinflation is the extreme and rapid rise in prices, which Indonesia experienced in the mid-1960s. In the video, it’s explained that hyperinflation caused the cost of basic goods to skyrocket, rendering currency almost worthless and forcing people to spend money immediately before its value dropped further.

Highlights

The video is a continuation from the previous one aired on the Inspect History channel, which covered national conflicts post-independence and how these led to economic instability.

The instability after independence was exacerbated by multiple regional rebellions, like Permesta in Manado, RMS in Maluku, and DI/TII, as well as the war with the Netherlands over West Irian.

A significant portion of the government's budget was allocated to military spending, leaving little for public welfare and other critical sectors.

Two major military operations that drained the national budget were Operation Trikora (to free West Irian) and Operation Dwikora (against Malaysia), leading to a significant budget deficit in 1963-1965.

Indonesia received USD 2.5 billion in export credit from the Soviet Union for arms purchases, including bombers, submarines, and fighter jets, making its military the strongest in the Southern Hemisphere at that time.

Despite military advancements, Indonesia's economy suffered, with exports declining from USD 840 million to USD 680 million between 1960 and 1966 due to a 50% drop in rubber prices, its main export commodity.

The Ganyang Malaysia campaign worsened Indonesia's trade by leading to an economic embargo against Malaysia, which disrupted the export market for commodities like rubber and tin.

Many government funds were spent on large infrastructure projects in Java, such as the construction of TVRI, Monas, Gelora Bung Karno, and the hosting of the 1962 Asian Games, but other areas, especially outside Java, were neglected.

With the government running out of funds, Indonesia resorted to printing more money, starting in 1957 when the Central Bank lost its independence.

From 1962-1966, the money supply in circulation increased by 150 times, leading to hyperinflation and an economic crisis where inflation reached 594% by 1965.

This hyperinflation made daily necessities extremely expensive, with prices rising 260 times, and caused people to rush to spend their money quickly before it lost value.

The situation worsened as goods became scarce, leading to long lines for basic supplies and government rationing.

In a desperate move, the government attempted redenomination, changing Rp 1,000 to Rp 1 in 1965, but this did little to solve the economic crisis.

Boediono, an economist, noted that all measures taken by the government were ineffective because they failed to address the underlying issue: the budget deficit caused by improper fund allocation.

The inflation crisis only began to stabilize when the government stopped printing money, which eventually led to more stable prices and improved purchasing power.