Mar'ie warns East Asian of being complacent

JAKARTA (JP): Indonesian Minister of Finance Mar'ie Muhammad yesterday warned East Asian countries, which the World Bank has called the economic miracle, against being complacent and overconfident.

"We should learn from the mistakes of several great nations which declined after making great achievements," Mar'ie said in a lecture at the Universiti Kebangsaan in Kuala Lumpur.

Mar'ie stopped short of explicitly blaming the currency turbulence hitting East Asia since early last month on complacency and overconfidence.

But the mistakes, which Mar'ie said had been made by Egypt, the Roman empire and Greece in the before-Christ period and Argentine before World War I, had been cited by many analysts as being largely responsible for the currency upheaval in several East Asian countries.

"Another major mistake made by those once great nations was that their great success lured them to build prestigious projects, resulting in excess spending," he said.

Those nations, he said, had also failed to adjust to new realities and environments and consequently had not realized they had been left behind by other emerging nations.

"Moreover, their leaders had ignored the fulfillment of the basic needs of the people," Mar'ie said in his lecture titled "Development of what and for whom".

A copy of the speech was made available here yesterday.

He did not discuss in detail the currency crisis ravaging several East Asian countries, arguing the financial upheaval did not reflect the sound fundamentals of the countries being attacked by speculators.

But Mar'ie conceded "we must live with the reality that the characteristics of the financial market is now entering a volatile situation".

During his two-day visit to Malaysia starting on Sunday, Mar'ie also met with Prime Minister Mahathir Muhamad and Deputy Prime Minister/Minister of Finance Anwar Ibrahim.

He elaborated on the painful adjustments which have to made to remain competitive and survive in the accelerated globalization process.

"We are now living in a world which is full not only of uncertainty and spiritual insecurity but also enigma," Mar'ie said.

He said despite the fierce competition among nations today, development could not be made value-free if "we are serious about steadily improving the dignity and material and spiritual welfare of mankind".

Mar'ie said economic development thinkers had increasingly included ethics and morality into the development concept.

"Ethics and morality have now become so imperative in the development process that such prestigious higher learning institutions as America's Harvard University have included the moral consequences of economic growth in its curricula," he said.

He said economic development has to be market-friendly and market-driven, but this should not mean the government's role should be completely abandoned.

"We need the government as an objective referee which is impartial in enforcing the rules of the game in the market, in creating a level-playing field."

Mar'ie said the government is also needed to play a leading role in the development of human resources, physical infrastructure and soft infrastructure (laws) and in protecting the environment. (vin)