Among the East Asian crisis economies, Indonesia has been by far the worst affected. Its economic contraction has been about twice as large as the next most affected economy, Thailand. It is the only crisis economy to experience serious inflation. Its political turmoil and social tension have also obviously been much deeper than elsewhere. Finally, unlike Thailand, the "early warning" indicators of a looming crisis were less obvious. This paper seeks to explain why Indonesia's crisis has been so much worse than its neighbors.
