RI's stability key to recovery

RI's stability key to recovery

SINGAPORE (Dow Jones): Indonesia needs social stability, much more than economic reforms as currently being pushed by the International Monetary Fund, in order to overcome the ongoing financial crisis crippling the country, Cheng Hong Fong, Nomura Singapore Ltd.'s senior vice president for emerging Asia fixed income research, told Dow Jones Newswires yesterday in an interview.

Economic reforms cannot be carried out effectively when the social situation is not stable, said Fong, citing anti-government protests occurring in Jakarta, the country's capital and riots and looting in Medan, North Sumatra.

The country needs to reform its economy, Fong conceded, "but the question is the timing of the (economic) reforms being pushed by the IMF."

"When you've got rising unemployment in the country, it's more important to have social stability," she said.

"And this will make the political situation unstable which in turn will hurt foreign investors confidence," Fong explained.