RUPIAH UNDER THE SHADOW OF GLOBAL POLITICAL ECONOMY (RUPIAH DALAM BAYANG-BAYANG EKONOMI POLITIK GLOBAL)

Abstract

This research explains the phenomenon of Indonesian political economy regarding the weakening of rupiah against dollar which results negative impact into Indonesian societal turmoil. The people of Indonesian believe that they are at disadvantage when rupiah is weakening against dollar and they tend to blame the governance of President Jokowi (Joko Widodo) for failing to prevent and overcome the currency from weakening. It obviously damages the credibility of President Joko Widodo as the current leader of Indonesia. A portion of Indonesians also compares this dollar strengthening issue to precedent cases that occurred during the previous office term of President Susilo Bambang Yudhoyono (SBY). This comparison seems misrepresented because the rupiah currency weakening against dollar that recently happened in this September 2018 was caused by the “trade war” between the United States and China. Meanwhile, the rupiah weakening currency that occurred during the era of President Susilo Bambang Yudhoyono was caused by the subprime mortgage crisis in the United States in 2008. Rupiah has been the indirect “victim” of the current global political economy. The value of developing states’ currency depends on the value of the developed states’ currency. This phenomenon can be explained by using the World System Theory of Wallerstein, in which the policy interests of developed states may affect developing states.         

Keywords: Rupiah, China, United States.