Indonesia seen crucial to recovery in SE Asia
Indonesia seen crucial to recovery in SE Asia
CANBERRA (Reuters): Thailand's former commerce minister
Narongchai Akrasanee said yesterday that Indonesia was crucial to
economic recovery in Southeast Asia but added it would take at
least two years for the region to get back on its feet.
"When you're talking about the region, Indonesia is the major
country now," Narongchai told Reuters in an interview.
"I think Thailand and Malaysia can come out of it in two
years, but if Indonesia doesn't come out of it quickly then it
would affect the whole region. If things in Indonesia come under
control, then I think two years."
Indonesia is suffering its worst economic crisis in decades,
with the collapse of the rupiah and drought causing food prices
and unemployment to soar. The economic slump has sparked riots,
often targeting the ethnic Chinese who control most of the
commerce in Indonesia.
Narongchai, in Australia for a regional exporters' conference,
criticized the International Monetary Fund's strict package for
Indonesia, saying it could aggravate social unrest and lead to
further riots.
The "politically unsuitable" package should be changed to take
account of the country's social problems, he said.
"I am hoping the international community and major
industrialized countries can do something to help Indonesia (by)
revising the IMF package in such a way that the fiscal position
will be more accommodating to the local problem."
"The IMF is putting too much pressure on the Indonesian
government to cut the budget. The government actually needs the
money to take care of the people and I'm afraid the IMF will not
agree," he told Australian Broadcasting Corp radio earlier.
The IMF has provided a US$43 billion financial rescue package
for Indonesia, aimed at stabilizing its economy, but President
Soeharto's commitment to the reform conditions is in doubt.
Narongchai said instability in Indonesia would be detrimental
to the region's security, and agreed Australia's own review of
its regional security strategies was important.
The Indonesian crisis has prompted Australia to review its
strategic policies, which were based on an economically booming
Asia and a stable Indonesia acting as a buffer to the north.
"Indonesia is the most important country in Southeast Asia.
Because of peace and stability in Indonesia during the last 30
years, we have been able to build up this ASEAN (Association of
South East Asian Nations) community...and everybody has been able
to prosper," Narongchai said.
"The region cannot afford to have chaos in Indonesia --
definitely not."