RI situation feared to erode Asian gains<\/p>\n
SINGAPORE (AFP): A further deterioration in Indonesia's
\neconomic situation due to a lack of clear government policies
\ncould erode progress made by other Asian governments, an
\nindependent risk consultancy said.<\/p>\n
\"Indonesia is the wildcard. The policy mix of its government
\nsince last November has been so poor that is difficult to see how
\nthe situation can be turned around short of a change in
\ngovernment,\" Political and Economic Risk Consultancy Ltd. (PERC)
\nsaid in a report received over the weekend.<\/p>\n
\"That is unlikely to happen without a further deterioration in
\nboth economic and social conditions. Such a deterioration could
\nbe corrosive on the rest of the region as well,\" PERC said.<\/p>\n
\"Certainly, it will put other governments to the test, just as
\nthe original meltdown in Thailand sent shockwaves through the
\nregion,\" the Hong Kong-based firm added.<\/p>\n
PERC noted that while most Asian countries had fared well, or
\nimproved their ratings, on a scale measuring governments'
\nresponses to the eight-month long crisis, there was no mechanism
\n\"to isolate an errant country like Indonesia so that the fallout
\nfrom its mistakes does not extend beyond its borders.\"<\/p>\n
\"It would seem that the deterioration in Indonesia is
\nprogressing so fast that it will be difficult to put such
\nprotection mechanisms in place in time even if other governments
\nin Asia wanted to,\" PERC said.<\/p>\n
Indonesia is now negotiating with the International Monetary
\nFund (IMF) on IMF-mandated reforms in an effort to revive its
\neconomy without aggravating social unrest.<\/p>\n
The review came amid a PERC survey of 11 Asian countries,
\nrated from zero to 10, with zero being the best grade possible,
\naccording to the wisdom of their government's policies in
\nhandling the crisis.<\/p>\n
Singapore emerged on top with a grade of 2.47 followed closely
\nby Hong Kong with 2.89. Indonesia rated an 8.<\/p>\n
\"The differences (between Singapore and Hong Kong) are too
\nsmall to be meaningful. Both governments have acted as one would
\nexpect and hope of major financial centers. There have been no
\nrude surprises or policy flip-flops,\" PERC said.<\/p>\n
However, Indonesia was a major risk to Singapore, it said,
\nnoting that \"should matters in Indonesia go seriously wrong,
\npassage through the sea lanes vital to Singapore's survival could
\nbecome hazardous,\" and that a \"surge in economic refugees could
\nalso pose serious political and economic problems.\"<\/p>\n
Any deterioration in the political and economic situation in
\nMalaysia, which rated six on the scale, could also affect
\nSingapore.<\/p>\n
Thailand rated 7.25 in the survey and South Korea 8.27. But
\nPERC said respondents to its survey \"had not yet recognized the
\nprogress\" Thailand's new government led by Thai Prime Minister
\nChuan Leekpai.<\/p>\n
Investors have welcomed moves to address the crisis by Chuan's
\nadministration, which survived last week's no confidence motion,
\nand was given resounding approval by the United States earlier
\nthis month for its policies.<\/p>\n
\"Our own assessment of conditions today is that a few
\ngovernments which were rated very poorly early on in the crisis
\nhave at least learned from their mistakes and are now taking
\nsteps to put sounder policies in place,\" PERC said.<\/p>\n
PERC gave kudos to the Philippines, Taiwan and China for
\nmanaging their economies, saying the Philippines had been
\nconsistently implementing policies only now being enacted by
\nSouth Korea and Thailand.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-situation-feared-to-erode-asian-gains-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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