Capital control system

I would like to comment on the Jakarta Post article "Jakarta should not copy Malaysia's capital controls" (Sept. 29) by Mr. Eddy Soeparno -- AMEX's Corporate Finance Director, and would like to suggest that current or future government should quickly adopt Malaysia's style of capital control system for the following reasons.

1. We are a very rich nation having a large resource base and market.

2. We do not need short term U.S. dollar funds as our foreign debts have been rescheduled.

3. Emerging markets have experienced the same problem and liquidity movement (still undetected) leads to a sudden contagion effect.

4. Diversifying foreign currency financing in the future and reducing dependency on an overseas bail out.

Greater export volume and value, higher FDI and more relaxed regulation should be encouraged.

6. IMF fund constraints due to lack of donors' support and unclear policy which prolong and widen the crisis to other sectors which originated from financial sector.

7. Excess liquidity in Europe and USA leads to further search for higher yield in Southeast Asia.

By implementing such controls the government can resist the pressures from U.S. dollar holders, put another pressure on U.S. dollar creditors as well as kick out the U.S. dollar speculators.

I hope more contributions will come from experts to support these ideas.

IRWAN IBRAHIM

Jakarta