Solution to the Rupiah weakening lately against Dollar

The Government should be brave to make the decisions such as the decisions in order to strengthening the value of Rupiah against Dollar and as an example when the investors from the another country wants to invest their funds in Indonesia they must using the Rupiah instead of Dollar because when the investor using the Dollar in Indonesia they also got the benefit from their funds also in Dollar not in Rupiah and this kind of thing for example, indirectly if the investor using the Dollar instead of Rupiah when the New York has experiencing the increases price of fuel here in Indonesia is also happen the same thing.

Regards
Rama Hilmy

Asian Infrastructure Investment Bank (AIIB)

        We know that United States have a special relationship with United Kingdom. They have been close allied throughout 20th and 21th centuries including the Korean War, World War I and II, Invasion of Iraq and Afghanistan, and Cold War. Not only have a close history with United States, United Kingdom also have a close  political, economic, military, diplomatic, and cultural until now. The development of nuclear weapon has mutual agreement between United States and United Kingdom. Economic policy of United States was also affected United Kingdom even European Union. They are enormously tied together. However, nowadays, we could hear and see that United Kingdom join Asia Bank membership with France and Germany and also Australia considering it. As we know that Asia Bank was being lead by China which have a love-hate relationship with United States. Asian Infrastructure Investment Bank was being see as the rival of World Bank which leads by United States. This project have a great diplomatic blow for United States when China have a fast-growing economic and diplomatic influence. The AIIB is an element from Chinese to create new financial and economic institutions that will increase its international influence. Asian Infrastructure Investment Bank was being launched by President of China, Xi Jinping, last year. In order to stop or affected European countries to join  AIIB, Washington urges allies to think twice before joining a new China-led Asian development bank. Western power will be a better power if all western countries was joining forces together. United States insists that their decision for join a new bank was not a good decision.

The AIIB was focusing to spur investment in Asia in transportation, energy, communications, and other infrasturctures. It was the potential rival for dominated western like World Bank and Asian Development Bank. For now, AIIB already have 26 countries as founder members, mostly from Asia and Middle East countries. Japan, the US ally, is not expected to be a member of it because Japan also worried about China's growing influence. Furthermore, both of the institutions were being in the discussions for join together.

Regards

Mailin

References:

http://www.theguardian.com/world/2015/mar/17/asian-infrastructure-investment-bank-france-germany-and-italy-said-to-join

http://finance.yahoo.com/news/france-germany-italy-join-china-002209014.html

http://en.wikipedia.org/wiki/Special_Relationship

Free Trade or Fair Trade?

         Trade is one part of the process of economy which one person or entity sell their goods or service for another in exchange for goods,services or money. We can said that another synonym of trade is financial transaction. Usually people or entity sells their goods or services in a provided place, named market. Trading is the economic process  by which a product finds its end users. Here we would like to describe two international policy that affect all countries in the world. Free trade and fair trade were two terms that addressing the same subject but different perspective. Free trade and fair trade have a common ground. Both of the terms have the advantages and the disadvantages. 

First, free trade is an international policy that exemplified by European Union and North America Free Trade Agreement which the governments did not restrict export and import. Government give free taxes (including tarriff) or other trade barries (like quotas and subsidy) and also access to market without regulated. Free trade make countries concentrate with their manufacture or develop products and provide good services. The best result of free trade is when their own products can be enter others for such exports. According to Rama's opinion, free trade is a better option for international trading policy rather than fair trade. He has argument that trade has the best option to develop another country. He said that trade of goods without taxes or other trade barriers will give advantage for nations. 

Meanwhile, Delinda's opinion and I was different from Rama's opinion. Both of us believe that free trade was just give the powerful country with better economy will get the advantage of free trade. Free trade doesn't cover condition of the labor. That's why we think that free trade policy didn't give an equitable part of the system. We would like to describe what is fair trade. Fair trade is a social organization that focus on the wages, producers in developing countries and also the condition of the labor. It gives a greater equality in international trading with transparency, dialogue and respect. There will be no exploitation in developing countries from developed countries, Moreover, it was more fair rather than free trade. We should try a new policy that can help our world economy, even can make it better than before. Maybe fair trade was new for everyone but we can try t apply it first to makesure the efficiency. Free trade was not bad also, actually if both of the term were being mixed up, it will be better for our world

Regards,

Mailin, Delinda and Rama

References:

http://en.wikipedia.org/wiki/Fair_trade

http://en.wikipedia.org/wiki/Free_trade

http://economyincrisis.org/content/free-trade-fair-trade-whats-the-difference

China's Trade Surplus

As we all know at the latest news in February, China's trade surplus hit records. The development of China's export growth rapidly. China become the world's second-largest economy. Exports leap 48.3 percent year-on-year to $169.2 billion while imports fell 20.5 percent to $108.6 billion. The growth in exports last month was well ahead of the median estimate for a 14 percent jump in a Bloomberg survey of economists.

What factor led to the growth of China's export? 

The economy of China growth because of holiday factor especially The Lunar New Year. The Lunar New Year fell on January 31 in 2014, followed by a week-long national holiday, leading to a low comparison base for this February.

Regards,

Keiko Kezia

Reference:

http://www.bbc.com/news/business-31787698

Dollar vs Rupiah

Nowadays, as you can see, dollar currency was keep strenghtening. All countries in the world was getting the impact of the strenghtening of  the dollar exchange rates, including Indonesia. Rupiah as Indonesia currency get weaken and weaken everyday. When dollar get weaken, rupiah also get weaken. That's why Indonesia can't manage their economy well, even more dollar was getting strengthen. President of Indonesia, Joko Widodo warn all investors to stay calm because it is a different situation from monetary crisis in 1998. Dollar exchange rate was increasing because external factor. Not only Indonesia but other countries exchange rate also get weaker to America currency. 

According to Gunawan Benjamin, economy analyst, the improvement in the dollar exchange rate has already been seen in the beginning of 2015. United States improves their economy growth. The problem of unemployment also get better in United States. Indonesia government should have already anticipated this problem. Government should find solutions and make policy to overcome this in order to safe the guards in Indonesia economy and all investors.

Regards,

Mailin

Reference:

Faisal, Muhammad.2015.Rupiah Terus Menurun, Permintaan Dolar Meningkat. http://www.waspadamedan.com/. Diakses Mailin pukul 08.12