Funds to RI, Thailand boost SE Asia: Anwar

Funds to RI, Thailand boost SE Asia: Anwar

KUALA LUMPUR (AFP): Malaysia's one billion dollar financial aid each to Indonesia and Thailand would boost confidence and help Southeast Asian economies to recover, Deputy Premier Anwar Ibrahim said Friday.

"Positive economic growth in Thailand and Indonesia will give positive effect to economic development here because sometimes outsiders perceive the region as one entity," he was reported saying by Bernama news agency.

Anwar paid an unannounced visit to Jakarta on Monday, where he held talks with President Soeharto and extended a one billion dollar aid facility to help revive Indonesia's ailing economy.

Soeharto had Tuesday said Singapore had also offered Indonesia funds totaling US$10 billion to help overcome the economic crunch but Singapore officials said a day later the amount was still being worked out.

Anwar, who is also finance minister, dismissed talks that the amount was burdensome for Malaysia but described the funds as "a gesture which the nation could afford."

"I do not think this matter should be a cause for concern since it will not burden the country's economy because it is not possible for me to come out with such funds if we are not capable of doing so," he said.

Both countries had not utilized the Malaysian facility yet as they were still negotiating with the International Monetary Fund and other nations, he said.

"There is a possibility that the fund for Indonesia may not be utilized, but I think we should not take chances, if the facility is required we must be prepared to contribute," he added.

Anwar expressed confidence that the region's economies would recover within a short period, which was the basis of Malaysia pledging the fund facility.

Malaysian oppositions had questioned the government's prudence and judgment" in committing the sum to Indonesia in view of the country's own economic plight.

The ringgit has depreciated by more than 30 percent against the dollar while the local bourse has lost over one-third of its market capitalization since July.

Meanwhile, Malaysian Premier Mahathir Mohamad renewed a call to regulate currency trading and slammed the International Monetary Fund (IMF) for using the region's economic crisis to impose conditions on nations seeking aid.

Mahathir warned that "the world will not be saved if we do not have any rules (on currency trading)," referring to the recent meltdown in global stock markets.

"While they pressure us to rule according to law but in the trading arena, there is no rule of law, rule of regulation or anything, they do as they like, " he was quoted saying on national television.

The premier said he failed to understand why there were no rules on "so-called market forces" which cannot be controlled nor disciplined.

Mahathir also slammed the IMF for using the financial crisis in Southeast Asia as an opportunity to impose new conditions on market liberalization on countries asking for financial aid.