RI, Thailand seen to recover by 2000

RI, Thailand seen to recover by 2000

KUALA LUMPUR (Reuters): International Monetary Fund managing director Michel Camdessus said yesterday that he believed Indonesia and Thailand would recover from an economic crisis by 2000.

"I am pretty certain that within two years, two and a half years, you will see high growth" in Indonesia and Thailand, Camdessus told a news conference in the Malaysian capital.

Both Indonesia and Thailand have received emergency financial aid under IMF-led reform packages but remain in the grips of a six-month old economic crisis.

On Thursday, Camdessus and President Soeharto agreed fresh economic reforms for Indonesia which ranged from the elimination of monopolies over major commodities to the cancellation of a big power project.

Camdessus said he felt Soeharto deserved international backing for adopting the new program. "I believe he deserves the support of the international community," he said.

U.S. President Bill Clinton called Soeharto on Thursday to express support, but financial markets reacted cautiously to Indonesia's program.

The IMF chief, on a tour of the region, said confidence in South Korea's economy had gradually "improved", and that it was crucial that South Korea's IMF-led adjustment program be implemented with social stability.

Camdessus said Thailand had not asked to renegotiate its IMF program or requested additional emergency assistance.

He expressed confidence that Bangkok would reassess its entire economic situation and adapt to changing circumstances if necessary.

"Thailand will re-analyze the whole situation and if necessary will adapt to changing circumstances," he said.

The IMF managing director said he considered China to be a stable part of the region.

Malaysia has taken important economic steps, especially in the area of fiscal policy, and did not need an IMF rescue package, he said.

"Malaysia does not need a Fund program," he said.

But he said Malaysia would have to strengthen its monetary policies, and the IMF would help the nation in its financial reform and discuss economic strategy with Malaysia in March, he said.