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REFORM OF ECONOMIC LAWS AND ITS EFFECTS ON THE POST‐CRISIS INDONESIAN ECONOMY
Author(s) -
JUWANA Hikmahanto
Publication year - 2005
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/j.1746-1049.2005.tb00253.x
Subject(s) - conditionality , creditor , insolvency , bankruptcy , indonesian , business , financial crisis , law , economic reform , economic policy , economics , law and economics , political science , debt , finance , politics , macroeconomics , linguistics , philosophy
This study evaluates the effectiveness of the economic laws some of which were introduced in the IMF‐led post‐crisis reforms to address serious problems faced by the Indonesian economy. It is argued in the study that the economic law reform has not been as effective as expected since the implementation of a law has not conformed with legal policy. The objective of the legal policy of the Bankruptcy Act, which was enacted in accordance with IMF conditionality, was to liquidate insolvent domestic companies and to relieve foreign creditors. At the implementation stage, however, the ruling of the commercial courts was often handed down against creditors. The ineffective implementation was due to several factors; one of them was judges' defensive reaction to possible hostile takeover by foreign creditors.