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.