Asian business executives against RI's CBS plan: Poll

Asian business executives against RI's CBS plan: Poll

HONG KONG (Agencies): Asian business executives have given the
thumbs down to a currency board system as a means of salvaging
the embattled Indonesian rupiah, according to poll findings
released yesterday.

The Far Eastern Economic Review and CNBC Asia Business News
poll found that 83 percent of executives surveyed did not believe
a currency board system would rescue the rupiah, they said in
news release.

Of those polled in Hong Kong, which has a currency board
system, 89 percent agreed with that position, the release said.

Asked whether the currency board system would be good for
their countries, 72 percent said it would not, while 89 percent
in Hong Kong took the opposing view.

On the International Monetary Fund's position that the
currency board would weaken the yen, 75 percent agreed with the
IMF, while 71 percent of Indonesians disagreed.

Indonesia's President Soeharto has said he is considering
pegging the rupiah to the dollar, a measure opposed by the IMF,
United States and other donors.

Asked whether, as Malaysian Prime Minister Mahathir Mohamad
has proposed, that intra-ASEAN trade be denominated in Singapore
dollars, 75 percent of executives polled in the region said "no,"
with the least enthusiasm coming from Australia with 88 percent,
while Thailand was the most enthusiastic with 50 percent.

The Association of Southeast Asian Nations groups Brunei,
Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand and Vietnam.

The Asian Executives Poll is a weekly fax poll conducted among
chairmen, managing directors and top corporate executives in 10
Asian countries.

The release did not give figures for the number of
respondents.

EU criticism

A special representative of the European Union said in Kuala
Lumpur yesterday that a currency board in Indonesia would be at
odds with the country's IMF program to rescue its economy.

"I would see the currency board as not compatible with the IMF
program at the moment and may not be at the medium term," Derek
Fatchett, who is also British Junior Foreign Office Minister,
told a news conference in the Malaysian capital.

Jim Cloos, chef de cabinet to European Commission president
Jacques Santer who was accompanying Fatchett, said the Group of
Seven industrialized nations were firmly of the view that the
conditions in Indonesia were not right for a currency board.

Fatchett, who was on a four-nation tour of Southeast Asia as a
personal emissary of British Prime Minister Tony Blair and
special representative of the EU presidency, said Indonesian
President Soeharto had indicated that he would not introduce a
currency board without the IMF's consent.

Fatchett said the EU was keen to see stability return to Asian
markets.

During his regional tour, he said he will explore the
establishment of a trust fund to support financial service
reforms in Asia and study the social impact of recent financial
turmoil. He has visited Thailand and will go to Jakarta and
Singapore from Kuala Lumpur.

Britain warns

A special envoy of British Prime Minister Tony Blair said in
Kuala Lumpur on Wednesday that Indonesian plans to adopt a
currency board risked having an adverse impact on other countries
in Asia.

"The currency board is not compatible to the IMF programs at
the moment and may not be in the medium term," Minister of State
for Foreign and Commonwealth Affairs Derek Fatchett told a
briefing for foreign media.

Fatchett said a currency board "cannot be seen as a substitute
to the IMF program" which should be given priority in Indonesia.

"Our concern is the extent to which the IMF is not followed,"
he said. "To stand outside the program runs risks, not only for
Indonesia but our fear is that it will have an impact to others
in Asia."