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)