Challenges and chances seen for RI economy
Challenges and chances seen for RI economy
WASHINGTON (Agencies): Indonesia has the potential to share in Asia's strong recovery from the financial crisis of 1997-99 but must still tackle problems of corruption and bad governance, U.S. Treasury Secretary Lawrence Summers said on Friday.
Summers, speaking to reporters ahead of a week-long trip to Indonesia and other Asian countries, said Indonesia was at "a particularly critical juncture."
"There's now been substantial repair from the depths of the Asian financial crisis but Indonesia has not yet fully shared in that recovery," Summers said.
"But we believe it has the potential to do so. With a relatively new government in place, this is a major moment of opportunity for Indonesia. But very large issues of corruption and of governance remain and will need to be managed going forward."
Indonesia was the second major Asian economy to turn to the IMF for help, winning a $42 billion international rescue deal including some $10 billion from the IMF in November 1997.
But the government took a zig-zag course on some crucial economic reforms and the country's recovery from the crisis-induced depression lags that of other nations in the region.
Summers also said he would stress the need for closer ties between industrialized and developing countries while visiting Indonesia and India this week.
His visit comes ahead of a Jan. 22 meeting in Tokyo of central bankers and finance ministers from the G7 countries.
Summers said the backlash against free trade seen at the World Trade Organization conference last month in Seattle, Washington, made this an appropriate time to visit these countries.
"After Seattle, after the Asian financial crisis, the defining international economic challenge of the next century is managing the integration between the industrial and developing countries," Summers said.
"India, as the largest democracy in the world, has always represented a major voice for the developing countries' perspectives," the treasury secretary continued.
According to some projections, India and Indonesia may emerge as the two of the three largest economies in the world, Summers said, underscoring the need for these countries to have an active voice in how to manage the increasingly integrated global economy.
Summers said he had no intention of negotiating specific trade deals with New Delhi on his trip.
Nor will he make any determination about sanctions that are still in place following India's nuclear tests in May 1998, he said.
"I hope to get a healthy assessment of the Indian economy, and the process of reform in India," said Summers, who will meet with social workers, business leaders and politicians during his three-day visit to Bombay, New Delhi, and Bangalore.
In Jakarta, where he will meet with Indonesian President Abdurrahman Wahid, Summers said he would urge the new government to tackle the issues of corruption it has inherited.
Summers also noted that has Indonesia has yet to share fully in the economic recovery that has emerged in the region.