Japan asked to help ASEAN maintain monetary stability
Japan asked to help ASEAN maintain monetary stability
JAKARTA (JP): President Soeharto reiterated his call yesterday
to members of the Association of Southeast Asian Nations (ASEAN)
to establish a common safety network system in the form of a
special fund to cope with a currency turmoil.
The President said Japan's contribution to the proposed
special fund would help countries in this region to maintain
their monetary stability.
"The Presiden cited the scheme as one of examples on how Japan
could help monetary stability in this region," State Minister of
National Development Planning Ginandjar Kartasasmita told newsmen
after accompanying Soeharto to receive a Japanese senior
official.
Chairman of the Board of Overseas Economic Cooperation Fund
(OECF) Akira Nishigaki met with Soeharto to discuss the
development projects in the country which are financed by the
Japanese government.
The Japanese government, the largest donor of the creditors
under the World Bank-coordinated Consultative Group on Indonesia
(CGI), channels its development aid through OECF.
President Soeharto for the first time brought up the idea on a
safety network system for maintaining currency stability in the
region when he addressed the opening of the 18th ASEAN Inter-
Parliamentary Organization (AIPO) in Bali last week.
He said the recent monetary upheavals that hit this region had
made the countries in Southeast Asia more aware of the importance
of regional cooperation in maintaining monetary stability.
"Not a single country in the region has been immune to the
currency onslaught that has been affecting the region," he told
the legislators from the ASEAN countries.
Recent attacks on local currencies in Thailand, the
Philippines, Malaysia, Indonesia and even Singapore have sharply
damaged their economies.
Thailand for instance, was forced to seek emergency aid from
the International Monetary Fund after the baht drastically
dropped against the U.S. dollar.
The Philippines had also to devalue its peso, and Indonesia
has tightened its monetary policy to stem massive speculative
attacks on the rupiah after its floating on Aug. 14.
In his meeting with Nishigaki, Soeharto expressed his
gratitude to the Japanese government because it increased its
loan to Indonesia this year despite its economic slump.
"The President deeply appreciated the Japanese government's
understanding and cooperation but he added Indonesia would not be
dependent on Japan forever," Ginandjar noted.
Japan remains the largest single creditor to Indonesia. For
1997/1998 fiscal year, Japan has pledged 213.74 billion yen
(US$1.87 billion) in new soft loans through the CGI creditor
consortium, despite its plan to slash its Official Development
Assistance (ODA) worlwide by 10 percent.
CGI creditors pledged a total of $5.3 billion in fresh aid to
Indonesia for 1997/98.
"I am very happy to see myself how our fund is being used
efficiently and effectively in this country," Nishigaki told
reporters after the meeting. (prb)