Holbrooke pesimistic on RI reforms

Holbrooke pesimistic on RI reforms

HONG KONG (AFP): Former U.S. State Department troubleshooter
Richard Holbrooke said yesterday there was little chance of
seeing economic reforms in Indonesia.

Holbrooke, now vice-chairman of Credit Suisse First Boston
bank, also criticized those who condemned U.S. action over
Indonesia and those who hid behind Asian values to avoid meeting
international standards.

Holbrooke brokered the 1995 Daytona accords on Bosnia as a
special envoy of President Bill Clinton, before moving to the
private sector last year.

Speaking in an interview about the Asian financial crisis, he
said Indonesia was "perhaps the most complicated situation I have
seen in the last five years in government."

The International Monetary Fund has organized a US$43 billion
bailout for Indonesia, but has withheld funds because changes
have not been made by the Indonesian authorities as agreed. Talks
are now being held in Jakarta.

Holbrooke said there was "no chance" President Soeharto will
institute necessary reforms.

"I think the chance of Soeharto having real reforms are quite
questionable but we must hope that he will start these reforms to
reduce the suffering and dislocation and unemployment that are
going to occur in the region."

Holbrooke said more international focus should be put on "the
corruption at the center" in Indonesia.

"Look at the Indonesian banks. There are 220 banks in
Indonesia. Over 100 of them are clearly insolvent and to save
those banks is impossible because to attempt to save the banks
would be to throw good money after bad. Those banks have to be
liquidated."

Holbrooke declared: "I think basically you have got a real
chance of recovery in South Korea and real chance of catastrophe
in Indonesia."

The former presidential envoy defended the U.S. response to
the Asian crisis.

He said criticism of the United States for not getting
involved in solving the crisis had been valid.

"Now we are being accused of economic and cultural imperialism
again, so we are blamed both ways: First we are too slow and we
do too little, then we are to fast and we do too much.

"That's the price of leadership and if I had to choose I would
prefer to be criticized for too much leadership than for too
little."

Holbrooke said many nations had taken shelter behind "Asian
values" to avoid accepting international standards.

"I really think that people who are talking about sovereignty
and 'Asian values' are really setting up a smoke screen in order
to prevent scrutiny of their balance sheet."

He said the Asian economies now in the global economic
mainstream -- Korea, Taiwan, China and Japan "can't go to the
capital markets to borrow money and then say 'we won't show you
our books, we play by different rules.'

"If they want to remain isolated like North Korea and remain
backward and totalitarian and despotic, then that's another
route.

"But if you want to be a part of the international community,
you have to play by international rules -- and the words Asian
values and sovereignty are really being used by people to obscure
the truth."