Australia still confidence in Indonesia's economy

JAKARTA (JP): Australian remains confident of the economic fundamentals of Indonesia and other Southeast Asian countries despite the region's currency crises, the country's foreign minister Alexander Downer said yesterday.

"Australia's confidence in the fundamentals of the region and its extraordinary prospects for the next fifteen years are unchanged by recent events," Downer told an Australia-Thailand Business Council Conference in Perth.

Speculative attacks have shaken the currencies of Thailand, Indonesia, Malaysia and the Philippines following the devaluation of the Thai baht in July. The crisis also hit the normally robust Singapore.

Downer said he supported measures taken by the Indonesian and Malaysian government in response to the crises.

Indonesia's package measures on Sept. 3 lifted limits on foreign share holdings, imposed greater budget discipline and cut import tariffs on raw materials of export-oriented companies.

Downer said the package was well received by the market.

He said the fundamentals would remain and he was confident the prudent policy settings would prevail.

He said Australia could identify its long-term interests by looking at the region's economic fundamentals and where they were likely to head in the next decade.

"Importantly, several of these key fundamentals are unchanged, for example the commitment to open economies and continued deregulation and receptivity to inward foreign investment," he said.

Australia was also committed to the development of the regional economy, he said. This included its contribution of up to US$1 billion to last month's International Monetary Fund rescue package for Thailand, he said.

"Australia is not just a fair weather friend, it is committed to the neighborhood for the long haul," he said as reported by the Australian embassy here.

Downer also reassured that Australia would remain open and supportive to racial equality and elimination of all forms of racial discrimination, despite the recent controversies sparked by senator Pauline Hanson, who leads the One Nation party.

"The White Paper of Foreign and Trade Policy reaffirms the principle which informs the collective actions of over 95 percent of Australians," he said.

"No amount of inflammatory rhetoric by a maverick rejected by 95 percent of the population will change that," he said. (das)