Some times ago I have posted some part of my thesis about New Economic Model which talks about MMT (Modern Monetary Theory), SWF (Sovereign Wealth Fund) and Printing Money based on Gold reserve, Natural Resources or Productive Projects and Consolidating Bottom of (economy) Pyramid.now I wanna give an example on how to implement this new economic model by creating sovereign digital currency to support SMEs. How does it work? what’s the simple way to explain the theory? and can we implement and do small practices or create a case study? This time we will talk about a scenario, a case study to support SMEs (Small-Medium Enterprises) as 97% of the national economy of Indonesia, SMEs contribute to the biggest portion of national employment if the SMEs are dying, the local economy will collapse, so this case study is merely intended to be an alternative solution to revive and support SMEs.Indonesia or any country that is rich with its natural resources should work and function differently when it comes to running the country’s economy and Indonesia can be money creator based on its national assets and its country reserve to issue bonds, securities without exploiting the resources, but this specific topic about country reserve we will talk about it in another chapter, back to SMEs and digital money, Indonesia has more than 17.000 islands, to implement new economic model may not be as easy as it sounds, so let’s pick one location to have as a trial place to test the idea.

In Indonesia, we still have a sovereign Sultanate/Kingdom within the Republic that’s now known as Special Province of Yogyakarta (Jogja) where the Sultan is also The Governor of the Special Province. I am nobody but I like reading and learning from different intelligent people, so just assume that this is my personal note or diary, so let’s have some imagination for the sake of the story to easily understand the case study for what I’m trying to say about the new economic model. If only I were the Sultan, the King of Jogja, I will propose and lobby the central government to approve my proposal to make Jogja as a Special Economic Zone, and as soon as it’s approved, I will create Jogja Metal Bank. For instance, we already have metal bank such as in Switzerland for hundreds of years, in Switzerland, they have little to no natural resources, however, Switzerland has collected gold and precious group metals (PGMs) deposited in its banks as the underlying to issue Swiss Franc. back to Jogja Metal Bank, as the Sultan, I will form a special team to audit the kingdom’s precious group metals and gold reserve within and outside of Indonesia as the kingdom’s asset since 500 years ago, because Jogja is older than Indonesia as sovereign state/kingdom, Jogja also had contributed to Indonesia’s independence financially especially in the early years of the Republic’s independence, and with that asset Jogja has, we will issue E-Mataram Dinar, digital money or cryptocurrency like Bitcoin but with underlying of Precious Group Metals or Gold deposited in the Jogja Metal Bank ! And under the sovereignty of Jogja, this Jogja Metal Bank will be functioning differently than conventional bank like Bank Indonesia (BI) which functions as the central bank, because central bank like BI (Bank Indonesia) is under IMF (International Monetary Fund) if you know what I am talking about.Okey So back to E-Mataram! this E-Mataram dinar has the exchange rate to rupiah (IDR), but if rupiah is inflating against USD, E-Mataram will not get affected like Rupiah because E-Mataram’s underlying is backed by Gold or PGMs, so everyday there’s exchange rate between E-Mataram and Rupiah, just like USD to Rupiah and Rupiah to Gold which can be exchanged.E-Mataram is issued based on the value of our PGMs and at the beginning to make it easy we will issue 1 E-Mataram is 1 Rupiah, and Jogja Metal Bank will be able to give credit or Financial support to the SMEs without interest for 5 years for SMEs entrepreneurs to scale up, for the SMEs that wanna get funded by Jogja Metal Bank, we will audit and calculate the company’s asset valuation first, we can give them funding up to 3x out of the company’s asset/valuation, or 300% out of their total asset’s valuation, they need to pay it back every month without interest for 5 years, interest for digital currency will create inflation, but without interest and with a flat rate between E-Mataram and Rupiah, we can prevent the inflation to happen, and if Rupiah is crashing down, devaluing against USD as dominating international currency to do international trade, it will not affect E-Mataram because E-Mataram’s value is backed by PGMs or Gold.so we can start this model from Jogja as the start and to test the system, if E-Mataram can work well, we can issue E-Rupiah and use the case study of Jogja Metal Bank with its E-Mataram as Jogja’s SWF. Indonesia with its SWF to issue E-Rupiah can do even more, the example above is just based on PGMs, we haven’t mentioned about other natural resources such as rare earth elements, and mining resources that Indonesia has which have not properly been audited, those natural resources can be used just in small percentage of it out of total valuation to be made as the underlying to issue E-Rupiah. For example, our nickels or minerals worth 200 billion USD after valuation, we can use 20% (more or less) out of it as the underlying to issue E-Rupiah or Print Money, and our existing digital infrastructure such as Go-Pay, OVO and other fintech platforms can be used to distribute E-Rupiah as the digital money that has underlying and doing the digital transactions using E-Rupiah with those apps.The difference between E-Rupiah or E-Mataram with Cryptocurrency like Bitcoin is that Bitcoin is purely digital money without underlying to back it up while E-Rupiah will be issued with our sovereign wealth fund backed by our PGMs and/or by other natural resources as its underlying, in this way we don’t need to own debt from any other countries to build our country if only we know how to utilize and maximize our own sovereign wealth and resources. E-Mataram and E-Rupiah will not be affected by the Rupiah value against USD, because Rupiah paper money is printed based on USD reserve as for now, so it really depends on USD value and USD as foreign exchange reserve while E-Rupiah and E-Mataram are issued based on Gold reserve, PGMs or other natural resources as the national asset.SMEs are the economic powerhouse of the country, SMEs create jobs and circulate the local economy. this is the emergency time to implement a new economic model strategy for the sake of national survival. The old monetary system doesn’t work anymore and it’s time to invent a new way ! Old system, Old Knowledge, and Old Mind don’t work anymore! capitalism based on the Keynesian economic model promoted by IMF and its stakeholders has failed us, our monetary system monopolized by and benefiting a certain group of people has failed us, it’s time to move on from Keynesian economic model to post Keynesian or New Economic Model.We are facing a global crisis, we have to find an alternative way to keep our nation survive from the war of 2 Hegemony countries of the 21st century.

To be continued…