RI urges tighter control on global financial system
RI urges tighter control on global financial system
JAKARTA (JP): Indonesia has called for tighter control on
inflows of offshore funds to avert another financial crisis in
the future.
Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said on Wednesday that tighter monitoring
of the inflows of offshore funds is needed to curb currency
speculation, which often results in financial turmoil in a
country.
The Asian financial crisis, which broke out in the middle of
1997, should become a good lesson for other developing countries,
Ginandjar said in his speech at the Ninth Summit of the G-15 in
Montego Bay, Jamaica.
The supervision of the international and domestic financial
systems, as well as the inflows of offshore funds should
therefore be strengthened to prevent the recurrence of an Asian-
type crisis in other developing nations, he said.
"There is a strong need to establish greater transparency and
more information on private fund inflows," he said in his speech,
a copy of which was made available to The Jakarta Post.
Ginandjar said that other important measures would be to boost
effective procedures for private sector participation in
resolving and forestalling financial crises.
"This includes efforts to make creditors bear more fully the
consequences of their actions," he said.
Moreover, there should be measures to discourage excessive
reliance on short term financing while strengthening countries'
capabilities of withstanding sudden shifts in market sentiment,
he said.
"There is a need to promote orderly integration of
international financial markets including capital account
liberalization," he said.
Ginandjar said that recovery from the Asian financial crisis,
which had adversely affected the global situation, was still long
and winding and the prospects of the global economy in the next
few years seem uncertain because the Asian crisis has begun to
reveal its global character.
"But the Indonesian crisis has not only affected the economy
but has also magnified our social tension and created political
instability,' he said.
The G-5, holding its ninth summit in the Jamaican resort of
Montego Bay, was set to bolster cooperation among developing
nations and to provide input for other international groups like
the World Trade Organization (WTO) and the Group of Seven rich
industrialized states.
Members of the G-15 are Algeria, Argentina, Brazil, Chile,
Egypt, India, Indonesia, Jamaica, Kenya, Nigeria, Malaysia,
Mexico, Peru, Senegal, Sri Lanka, Venezuela and Zimbabwe. (aly)