Asia need to adjust oil policies: S&P
Asia need to adjust oil policies: S&P
Asian countries need to change their energy policies in response
to record high oil prices, a conference of leading business
executives was told here on Thursday.
International ratings agency Standard and Poor's said oil
prices were a key threat to sovereign credit ratings and Asian
countries that failed to adjust policies would see increased
exchange rate and fiscal risks.
"Some countries will be hit harder because of the dependence
on oil for some and also because of policies that encourage fuel
consumption above what they usually should," SP director of
sovereign and international public finance ratings Takahira Ogawa
told the Forbes Global CEO Conference in Sydney.
Ogawa said there were questions about whether fuel policies
were appropriate in Indonesia, the Philippines and to some extent
Japan.
SP associate director for sovereign ratings and finance
ratings, Agost Benard, said the fall in value of Indonesia's
rupiah might alter his firm's outlook on the country although its
underlying rating would not be affected.
"We are closely monitoring the situation -- what we would like
to see is the government address the underlying causes in a
collective and robust manner -- unfortunately we have not seen
that materialize," Benard said.
Indonesian President Susilo Bambang Yudhoyono said on
Wednesday the government would not raise fuel prices at least
until October, disappointing many who felt immediate action was
necessary.
SP said separately in a report that current Indonesian fuel
subsidies were unsustainable.
"There is keen awareness of the unsustainability of subsidies
at this level and that letting the (fiscal) deficit blow out
could exacerbate inflation, adding further pressure on interest
rates, the currency and hurting investor confidence," SP said.
It said fuel subsidies remained the Indonesian
administration's biggest near-term challenge, with pressure
building for additional, politically-difficult subsidy cuts. --
AFP