RI presidential election 'influences' crisis<\/p>\n
SINGAPORE (Reuters): Singapore's former prime minister Lee
\nKuan Yew has said the worst of Asia's financial troubles will not
\nbe over until after Indonesian presidential elections next month,
\nthe local Sunday Times newspaper reported.<\/p>\n
"If there are no upsets in the election, the situation will
\nstabilize and improve. If there are, the currencies and stock
\nmarkets in the region will be affected by a bout of panic and
\nnervousness," it quoted Lee as saying in a speech at a dinner on
\nSaturday evening.<\/p>\n
Lee, who led Singapore for 31 years until 1990, said the
\nIndonesian rupiah currency would weaken again if the market was
\nuncomfortable with the country's next vice-president.<\/p>\n
Indonesia's aging President Soeharto has said he would accept
\nthe nomination of the ruling Golkar party to run for a seventh
\nfive-year term in office.<\/p>\n
The country's 1,000-member People's Consultative Congress
\n(MPR) meets on March 1 and is expected to elect Soeharto for a
\nseventh five-year term on March 9.<\/p>\n
But there is intense speculation over who will be Soeharto's
\nrunning mate and potential successor. The 76-year-old President
\nhas given no formal indication of who he might favor.<\/p>\n
Rumors that research and technology minister B.J. Habibie
\nmight be a preferred candidate for the post caused a sharp fall
\nin the value of the rupiah last month. Habibie has been
\nassociated with a number of big spending projects.<\/p>\n
Lee was quoted as saying market unhappiness with the
\nIndonesian vice-president would lead to higher inflation, more
\ncompanies going bankrupt and greater unemployment.<\/p>\n
"The resulting social problems will be widespread," he said.<\/p>\n
"It is vital to Indonesia that the rupiah is stabilized and
\nthe stock market begins to recover. Otherwise, the fallout would
\nbe bad for Indonesia and may again spread panic over the region,"
\nhe said.<\/p>\n
Lee blamed the Southeast Asian financial crisis on politics.<\/p>\n
Investor confidence evaporated when ballooning current account
\ndeficits in countries like Thailand, Indonesia and South Korea,
\nwhich had borrowed heavily in U.S. dollars, became apparent.<\/p>\n
He said their overspending was made possible because of weak
\nbanking systems, and was exacerbated by corruption and cronyism.<\/p>\n
But the root of the problem was political because governments
\nwere preoccupied by political difficulties and had not heeded
\nwarning signals from the market.<\/p>\n
"The Thais had six governments in five years and none had the
\ntime to attend to the gaping current account deficits. The
\nMalaysian Prime Minister (Mahathir Mohamad) condemned foreign
\nspeculators.<\/p>\n
"And President Soeharto thought that he could ride out this
\ncrisis as he had ridden so many others in the past 30 years."<\/p>\n
But Lee had praise for current Thai Prime Minister Chuan
\nLeekpai and South Korean President-elect Kim Dae-Jung who he said
\nhad been "saying and doing all the right things".<\/p>\n
"It is a crisis of confidence, and confidence has not yet been
\nrestored," he said. "Where the market is not convinced that the
\nleader is doing what is necessary, they have withheld their vote
\nof confidence and the currency is vulnerable."<\/p>\n
Arms buying -- Page 4<\/p>\n
Protectionism -- Page 10<\/p>\n
Asian stocks -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/ri-presidential-election-influences-crisis-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }