Alatas stresses the need to reform monetary system
Alatas stresses the need to reform monetary system
JAKARTA (JP): Minister of Foreign Affairs Ali Alatas yesterday
underlined the need to restructure the international monetary
system which has had an increasingly detrimental effect on
developing countries.
"The restructuring of the international monetary system is
felt to be increasingly urgent because the absence of a solid
system will continue to create havoc, especially in the trade and
development field," Alatas said.
The minister was speaking at the inauguration of Soemadi
Brotodiningrat as the foreign ministry's new director-general for
foreign economic relations. He replaces Wisber Loeis who is now
ambassador to Japan.
Soemadi was formerly Indonesia's permanent representative at
the United Nations office in Geneva.
According to Alatas, the current international monetary system
needs to be corrected due to the adverse effects it creates on
developing countries.
"The growing burden of foreign debt and the fluctuation of
foreign currencies along with the decline in the flow of aid and
investments have caused a reversal of financial flow from the
developing countries to the developed ones," he explained.
Alatas' statement reflects the growing worry among officials
here over the alarming rise of the Japanese yen against the
dollar (yendaka).
The Japanese government is the largest provider of loans to
Indonesia. Over 40 percent of the country's foreign loans are in
yen.
Indonesia has been hard hit by the rising trend of the yen
which adds an additional $300 million to the debt for every one
percent increase.
President Soeharto a day earlier also expressed concern over
the matter and urged multilateral donors to consider the long-
term effects of the yendaka.
Alatas noted yesterday that by using its credibility in
managing the resources of its development funds, Indonesia must
"ensure that international financial and monetary problems are
tackled cohesively and comprehensively," he said without
elaborating on a possible solution.
Despite being one of the world's biggest debtors, Indonesia in
the past 28-years has never been forced to reschedule its foreign
debt payments.
In fact Indonesia as chair of the 111-nation Non-Aligned
Movement has championed the cause of other debt burdened
countries by highlighting the need for lender countries to
address the problem.
To further close the economic gap between developed and
developing countries Alatas also pointed out the need for a
constructive North-South dialog.
"I believe that continuous efforts to increase the dialog
between the developed and developing countries will result in a
constructive framework to many of the world's problems we face,"
he said.
Apart from urging a restructuring of the international
monetary system, Alatas also stressed the significant role now
occupied by Soemadi.
"The process of globalization and the accentuation of world
economic issues will place the Director-General of Foreign
Economic Relations in an increasingly important position," he
said.
Among former director-general Wisber Loeis' legacies was the
successful chairmanship of the senior official meetings of the
Asia Pacific Economic Cooperation forum last year.
Loeis' responsibilities will be taken over by the new
director-general, Alatas later told journalists.(mds)