'Indonesia must develop its own economic strategy'

'Indonesia must develop its own economic strategy'

Fitri Wulandari, The Jakarta Post, Jakarta

Thailand's former minister of commerce Narongchai Akrasanee
suggested that in order for Indonesia to accelerate its economic
recovery process, it must not rely too much on "ready-made
policy" from multinational lenders such as the International
Monetary Fund and the World Bank.

A ready-made policy could not be applied in every country as
they did not all share similar economic conditions and
backgrounds, he argued.

"The formula of liberalization, deregulation and privatization
as endlessly advocated by the World Bank and IMF cannot be taken
as a cure-all strategy," Narongchai said in his keynote speech at
a seminar on Indonesia's Strategy for Economic Development hosted
by The Jakarta Post here on Monday.

"They belong to the global economic model ... but when you
look at a country, the situation is different. Each country is
different in the area of trade, financing and technology," the
chairman of Seranee Holdings Co., Ltd said.

Narongchai said that Indonesia must develop its own strategy
on economic development by focusing on foreign trade,
international financing and technology.

"It (the strategy) depends on how good you are in trade,
finance and technology. Although it takes consideration of this
global model, the strategy should be designed to fit your
situation in these areas," he added.

Thailand is among the Asian countries that have managed to
emerge out of that 1997 financial crisis that hit the region.

Meanwhile, Indonesia is still muddling through and debating on
whether or not to part ways with the IMF after 6 years. Thailand
has already graduated from IMF tutelage.

Thailand sought a US$17.2 billion rescue program from the IMF
in August 1997 during the Chavalit government. Of the $17.2
billion IMF package, Thailand actually drew down only $12 billion
to help prop up the baht.

After undergoing painful reform and taking unpopular measures,
Thailand recovered from the crisis in 1999.

Since then Thailand has made progress in its financial and
structural reforms. So far, It has repaid $7 billion to the IMF.
There remains $4.8 billion in outstanding loans. The last
repayment to the IMF is due by May 2005.

Last year, Thailand's economy grew by a surprisingly good 5
percent on the back of robust domestic consumption.

Early this year, the Thailand government announced it planned
to repay all its remaining debts to the IMF by the first half of
2003.

Thailand, Narongchai said, had started its own strategy called
"the Dual-Track Economic Policy" or "Local/Regional Link - Global
Reach".

Under this strategy, Thailand is giving more attention than
before to the domestic market, which has been the primary mover
of its economy.

"Domestic capacity enhancement is the key issue," he said.

At the same time, the country is targeting ASEAN, East Asia
and other Asia countries as its foreign markets.

However, this is being done without abandoning its links with
traditional trading partners in the West.

While continuing to promote export, Thailand is paying more
attention to the domestic market than ever before.

As for foreign trade, Narongchai said, the country is
developing industries that can compete internationally, such as
in the areas of food processing, tourism and the automotive
industry.

In international finance, Thailand is beginning to access
international money and capital markets for the purpose of owning
its own businesses.

"We must make sure that reliance on foreign financing is for
the purpose of eventually owning businesses," he remarked.

Narongchai said that although Thailand has access to
international financing, so far it could not own its own
businesses as such financing went hand-in-hand with foreign
control.

"Thus, we cannot afford a fully open capital account despite
what the IMF tells us," Narongchai stressed.