RI's social unrest a 'major risk': WB official

RI's social unrest a 'major risk': WB official

MELBOURNE (Dow Jones): An official from the World Bank warned yesterday that political and social unrest in Indonesia and elsewhere in Asia poses a "major risk" for the region as it attempts to recover from a severe economic crisis.

Social unrest in Indonesia is "a big problem," and similar unrest is a possibility in the other crisis-hit countries, Thailand and South Korea, the World Bank's vice president of East Asia and the Pacific Region, Jean-Michel Severino, said.

"Even the programs that are being (put in place) in Korea and Thailand are very risky programs because the political situation, the social situation, might change because people are suffering very much from the shock of the crisis," Severino said.

Severino was addressing an economic conference at the University of Melbourne via a satellite-link from Washington DC.

"There are many who are being impoverished, and therefore the risks in these countries are very high and the governments, which are now in charge, face a very hard task and one shouldn't underestimate the difficulty of their problems," he said.

But Severino rejected criticism that the International Monetary Fund and World Bank recovery packages for the three countries have focused 'blindly' on the economic problems, ignoring the social consequences.

"We have been very active in all the crisis countries, on the World Bank side, to ensure that there were at least some social mechanisms inside the programs," Severino said.

In addition he said the World Bank is now in the process of developing new projects aimed at helping the poorest social groups in the affected countries.

"We're developing specific projects that also aim to help the poorest (and) in general these are big social funds," Severino said.

In June a US$300 million program to aid the poor in Thailand will be put to the World Bank board, Severino said, adding that a similar program for Indonesia valued at $800 million is likely to also come before the board in either June or July.