Indonesia urges more monitoring of private capital flows

Indonesia urges more monitoring of private capital flows

PARIS (AFP): Indonesia called here on Wednesday for more
information on private capital flows across the world and greater
efforts to understand the risks associated with such flows.

"There is a substantial and real need for better and more
current information on private capital flows," Coordinating
Minister of Economy, Finance and Industry Ginandjar Kartasasmita
told ministers from the industrial world.

But at the same time "we need to have a better understanding
of the risks associated with such flows," the Indonesian minister
said during a meeting between ministers of the 29-member
Organization for Economic Cooperation and Development (OECD) and
major non-member developing countries.

"Governments and central banks can only monitor their exposure
to foreign exchange risks if they have a true assessment of the
types of instruments used to access capital, and of their
associated risks."

The Indonesian minister also said that the international
community must do more to "prevent or cope with contagion,"
notably by setting up an "effective mechanism to supervise and
regulate international money markets so that they would become
more open and transparent."

Indonesia and six other non-OECD countries took part in the
talks with OECD ministers, the first such gathering ahead of an
OECD annual ministerial meeting.

The world's richest countries began two days of talks here
Wednesday expected to focus on a new round of global trade
liberalization negotiations due to begin in November.

But in recognition that events in the developing world have a
direct effect on industrial economies in an increasingly
globalized economy, the ministers of the 29-member Organization
for Economic Cooperation and Development were first meeting with
representatives of key non-member countries.

Ministers from Argentina, Brazil, China, India, Indonesia,
Russia, Slovaia and South Africa were attending Wednesday's
talks, the first time the annual OECD ministerial meeting has
included such a session.

But much of the ministers' attention was likely to be focussed
on Geneva, where the World Trade Organization was to meet later
Wednesday to try yet again to resolve the knotty problem of who
should head the organization.

The dispute over who should replace Renato Ruggiero, who
stepped down as director general on April 30, has cast a shadow
over prospects for a new round of global trade talks due to be
launched in Seattle, Washington in November.

The globalization of the world economy, and the effect of the
Asian, Russian and Brazilian crises on industrial countries, make
it increasingly clear that the OECD is no longer simply an
organization of industrial countries which chiefly have trade and
investment ties with each other.

The presence of China and Russia at Wednesday's talks is
particularly important as it gives OECD ministers a chance to
talk with two key economies which are not members of the WTO
before beginning its own discussions on the future direction of
world trade.

China is anxious to join ahead of a new round of WTO trade
liberalization talks due to be launched in November but has not
yet reached agreement with key members the United States and the
European Union on its conditions of entry.

OECD members differ on how extensive the new round of global
trade talks should be, and several are embroiled in tense
bilateral trade rows at the moment, notably the United States and
European Union with disagreements over bananas and hormone-
treated beef.