Riots, looting worsen Indonesia's economy
Riots, looting worsen Indonesia's economy
JAKARTA (JP): The widespread riots and lootings in the capital
over the past few days may further worsen the country's already
weak economy, a top economic government official has said.
Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartsasmita said yesterday that a further plunge in the
rupiah would certainly hurt the welfare of ordinary people
because it would make prices of basic commodities more expensive
since their production still required imported materials.
"The action outside the pro-reform movement has really harmed
us," he told reporters last evening at a media conference after
returning to Jakarta from a visit to Tokyo.
Following the shooting of four Trisakti University students at
a demonstration Tuesday, Jakarta and nearby towns were spooked by
riots and looting which resulted in the burning of many buildings
and brought business operations to a virtual standstill.
Ginandjar explained that the international community welcomed
the pro-reform student movement.
"The moral movement of the students has no negative impact on
the rupiah, but action outside this would further weaken the
economy and deal another blow to the rupiah."
He pointed out that when the government clinched an agreement
with the IMF over the economic reform programs, the currency
managed to stabilized at Rp 7,500 against the U.S. dollar.
However, when violent riots hit Medan, the capital city of North
Sumatra, the rupiah tumbled to Rp 9,000, while the riots in
Jakarta forced the currency down to about Rp 12,000 to the
dollar.
He said that because of the riots, investors from Taiwan and
Japan had postponed investment plans in the country.
He also explained that although the IMF had not made any
statement whether the unrest would cause a delay in the
disbursement of its loan to Indonesia, it was clear that the
government must wisely handle the incidents.
"I've expressed their concern to the minister of defense/armed
forces commander," he said.
He said that because the riots had badly hit the distribution
of basic needs in Jakarta, the government would provide a total
of 125,000 packages of basic commodities today.
The government would also continue with its program to provide
labor-intensive projects funded by Rp 1.5 trillion throughout the
country.
Minister of Defense/Armed Forces Commander Gen. Wiranto had
also assured him that the distribution of basic needs to the
capital would run smoothly, he said.
"I've also talked to the president director of Pertamina (the
state-owned oil company) to continue distributing fuel and
kerosene," he said.
He added that as of today, the government would start market
operations to stabilize the prices of basic commodities.
"I hope stores and markets which did not get burned can start
doing business again," he said. (rei)