G-7 tells Indonesia to use restraint over social unrest
G-7 tells Indonesia to use restraint over social unrest
LONDON (Dow Jones): The Group of Seven (G-7) industrialized
nations on Saturday signaled their mounting concern over civil
unrest in Indonesia, and the need for the government to stay on
the course of economic reforms.
"Indonesia is surely the country in Asia that we are most
worried about," said German Economics Minister Guenter Rexrodt.
U.S. Treasury Secretary Robert Rubin repeated a need for
restraint by Indonesian authorities dealing with the unrest,
while Secretary of State Madeleine Albright said that the
government should allow peaceful political demonstrations.
The G-7 finance and foreign ministers, who convened two days
of talks in preparation for a May 15-May 17 leaders' summit in
Birmingham, stopped short of issuing any formal declarations
about Indonesia.
But officials confirmed that Indonesia was a dominant topic of
discussion during ministerial discussions, and few immediate
solutions other than continued financial support was suggested.
"In particular, at this time of unrest the world will be
watching Indonesia and I believe more must be done," British
Chancellor of the Exchequer Gordon Brown said to tackle the
social problems that come in the wake of Asia's financial turmoil
more generally.
The G-7 ministers, possibly leaving more formal declarations
for the leaders next week, also did not issue any formal comments
on the Asian financial crisis, which has not yet been declared
dead primarily because of the political and economic
uncertainties hanging over Indonesia.
Finance ministers of the U.S., Japan, Germany, France, the
U.K., Italy and Canada noted that the continuing process of
globalization and the events in Asia "have revealed a number of
weaknesses and vulnerabilities in national and international
financial systems, as well as in the lending practices of private
sector investors".
The ministers saw a need for Indonesia to take steps to create
a more pluralistic society in the long run, and at least in the
short run a move to clear up some of the political succession
issues that continue to overshadow the country's economic reform
efforts.
Officials, however, generally steered clear of any specific
policy suggestions to Indonesia, and Rubin declared, "There is no
suggestion of sanctions".
Rubin underlined that if Indonesia moved forward with the IMF-
backed reforms then the economy would improve and social
pressures ease.
A critical balancing act will be required by all parties, G-7
officials said, given that the social unrest is being fueled by
the austerity measures backed by the IMF.
Rexrodt said the state of reforms in South Korea and Thailand
indicated that those two countries were well on their way to
conquering their troubles. "Indonesia is a special case,
however," Rexrodt said.
Dominique Strauss-Kahn, France's finance minister, said he
hopes the G-7 heads of state and government take a "firm
resolution on Indonesia" at next week's summit in Birmingham.
Hikaru Matsunaga, Japan's finance minister, urged continued
IMF and G-7 financial support to Indonesia. Japan is decidedly a
front-line nation, particularly since its tinder-like banking
sector has the largest financial exposure to Indonesia of any
single nation.
"The Indonesian government is strictly following policies
agreed with the IMF. Japan urges the G-7 that we shouldn't pull
off our assistance to Indonesia using the riots as an excuse," he
said.
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