The Iran-Israel conflict could cause the 1998 crisis to repeat itself, this is the trigger

JAKARTA – The heating up of the Israeli conflict and Iran In the last few weeks, the country’s economy has the potential to be battered. This condition is vulnerable to shaking up Indonesia’s foreign trade and monetary policy.

The Chancellor of Paramadina University, Didik J Rachbini, said that the heating up of geopolitics in the Middle East cannot be underestimated. He compared the impact of the Israel-Iran war to being like water breaking through Dubai, causing the activities of the United Arab Emirates (UAE) to be completely paralyzed.

Indonesia could experience post-flood conditions in Dubai, even worse, namely a repeat of the monetary crisis in 1998, if the impact of the war between the two countries cannot be anticipated by the current government. Especially, government initiatives maintain foreign trade and monetary policies. These two aspects are very vulnerable to being affected by global conflict.

“Don’t take the impact of this war lightly on the government, you can’t just focus on politics, Gibran and MK affairs, and you can’t play around, this war will be like water breaking through Dubai, yes, it will be through foreign trade and monetary channels,” said Educate in a discussion forum, Monday (22/4/2024).

The Middle East is Indonesia’s strategic partner in the energy sector and several commodities, especially regarding crude oil and the supply of fertilizer raw materials. This region plays an important role in global oil trade and is currently starting to experience obstacles.

Didik views that Indonesia needs to strengthen its foreign trade with other Asian countries, when the oil market from the Middle East and North Africa to Europe is starting to become hampered.

Indonesia, he continued, still has economic poles that need to be maintained and cooperation enhanced. Thus, the negative impact of the Middle East war on Indonesia’s foreign trade can still be minimized.

“And Middle East trade holds commodities, namely oil, because that is the policy that must be prioritized. “First, even though the market in North Africa is hampered by the route to Europe, I think to America too, we still have other poles,” he explained.

“In Asia itself it won’t be disturbed, our partner Japan is a very large importer, our partner China will also not be disturbed. “Then India and others, the economic poles apart from Europe and the US, must be maintained as part of what we have to carry out in foreign trade,” he continued.