Asia must clean up its economies, says Mar'ie Muhammad
Asia must clean up its economies, says Mar'ie Muhammad
NEW YORK (AFP): Indonesian Finance Minister Mar'ie Muhammad said here Friday that Asian countries must be more transparent in their financial dealings in order to rebuild confidence in their economies.
"Confidence-building becomes the core of the issue, and this is not merely an economic issue," he said in a speech to the Asia Society.
"To restore confidence should begin at home, although the support from the international community is very important." The key to recovery was "transparency in the markets," according to Mar'ie.
"Full disclosure allows investors to assess the risks appropriately at the macro and micro level, and will enhance confidence in the market."
South Korea has been accused of disguising the full extent of its financial crisis, which resulted in a US$55 billion-IMF bailout.
Mar'ie said he did not blame currency speculators for the recent weakness in the rupiah which sank to its lowest level overnight after reports of President Soeharto's health.
He said the present financial turmoil, including the crises in Thailand, Indonesia and Korea, were triggered and exacerbated by "fragility in the financial sector and huge private foreign borrowing."
Indonesian officials earlier said Soeharto had canceled a trip to an Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur early this week but that his health had improved. Doctors had advised him not to attend, they said.
The minister said that although the slowdown in economic growth in Asia will be "painful," there are lessons to be learned from the crisis.
Mar'ie said that although governments have a key role to play in market economies, their operations must become "more transparent and less distorting."
"The role of government is decreasing through the broadening and deepening of deregulation ... and further liberalization of the economy," he was quoted as saying Associated Press.
Speaking at the Asia Society, he said government should "arbitrate conflicts" among business interests.
"The role of the government is to achieve macroeconomic stability, deliver core public services, provide appropriate market regulation, and promote the rule of law," he told the audience.
Responding to questions after his speech, he said Soeharto is in good health, and claimed his government has the political will to institute "painful" reforms to stabilize the economy.