IMF slow in aiding ASEAN to deal with currency crisis
IMF slow in aiding ASEAN to deal with currency crisis
JAKARTA (JP): President Soeharto criticized the International
Monetary Fund (IMF) yesterday for its slow action in assisting
Association of Southeast Asian Nations (ASEAN) members deal with
the region's recent currency turmoil.
The President expected the world body to deregulate its
complicated procedures to accelerate its mission to help needy
countries.
"IMF is expected not to be late in offering help when a
country is dying, but is expected to come on time," Muchtar
Mandala quoted Soeharto as saying.
Muchtar, president of Bank Duta, met with Soeharto yesterday
to report on the progress of the forthcoming Asia Pacific
Economic Cooperation (APEC) Business Advisory Council (ABAC)
meeting in Santiago, Chile.
Muchtar was accompanied by other members including businessmen
Bustanil Arifin and A.R. Ramly and economist Dorodjatun Kuntjoro-
Jakti as advisor.
The President also complained about the attitude of
industrialized countries in anticipating financial upheavals.
"Industrialized countries must actively participate in
ensuring currency stability because the cooperation will be
useless if the crisis is prolonged," Soeharto said, adding APEC
might face a setback if the crisis continued.
Speculative attacks have shaken most Southeast Asian
currencies following the devaluation of the Thai baht on July 2.
The crisis also hit the normally robust Singapore.
To contain speculative attacks, Bank Indonesia widened the now
defunct intervention band from 8 percent to 12 percent. But the
rupiah continued to weaken, forcing the central bank to intervene
in the market.
After spending about US$1.5 billion, and with the rupiah
continuing to weaken, Bank Indonesia decided on Aug. 14 to float
the currency.
The rupiah has declined by over 20 percent since then.
Thailand was forced to seek emergency aid from the IMF after
the baht drastically dropped against the U.S. dollar.
The international community approved last month a $16 billion
loan package for Thailand, including $4 billion from Japan and $4
million from the IMF, to help ease a cash crunch triggered by the
decision to float the baht.
IMF also offered the Philippines $1 billion in loans,
following the country's decision to devalue its peso.
It hailed Indonesia's decision in August to allow its currency
to float, saying the move would allow the country's economy to
continue its recent impressive performance.
"When ASEAN countries are willing to give their joint
commitment in solving a crisis, why can't developed countries
also contribute?" Soeharto asked.
Soeharto asked for Japan's contribution last week to his
proposal to establish a special fund forming a common safety
network to help countries in the region maintain monetary
stability.
Meanwhile, Soeharto ruled out rumors he might be absent from
the APEC summit in Vancouver, Canada, because East Timorese
activists plan to hold massive demonstrations.
"I am regarded as a murderer by them," he told businesspeople.
(prb)