Sakakibara urges RI to revive role in region's economy

Sakakibara urges RI to revive role in region's economy

Wahyoe Boediwardhana
The Jakarta Post
Nusa Dua, Bali

Former Japanese top financial diplomat Eisuke Sakakibara said on
Sunday that with the late 1990s financial crisis already passed
away, the country should put its best efforts to regain its
former economic stature.

"Indonesian financial crisis is over. Now it is a time (for
Indonesia) to play its important role in the South East Asia
region, (a role) it played prior to the crisis," he said in a
speech delivered at a three-day investment conference here.

Sakakibara, known as "Mr. Yen" for his influence over currency
markets when he was vice finance minister during the late 1990s,
said that promoting technologically-advanced industry was one of
the main engines that could propel Indonesia back into its
position as one of Asia's influential economic actor.

He also urged Indonesia to boost economic and trade
cooperation with China, which is becoming Asia's new economic
giant.

"We should not be afraid (of China). We should, instead,
maintain and develop our technology capability and at the same
time incessantly looking for things which we could learn from
China (experiences and achievements)," he said.

Sakakibara also urged Indonesia to play an active role in
establishing a trade network that would link the countries in
Asia region. The proposed network, he stressed, should not be
obstructed by any trade barriers.

The international conference was opened by President Megawati
Soekarnoputri on Sunday.

Indonesia was badly hit by the financial crisis that started
in the middle of 1997, which sent the rupiah to all time lows,
boosted inflation, crippled the banking sector, and caused the
economy to contract by more than 13 percent in 1998. Although
macroeconomic stability has returned and banks have started to
recover, the country's economy has only grown by between 3-4
percent during the past couple of years.

Prior to the crisis, the economy could grow by between 6-7
percent when Indonesia was dubbed as one of the darlings of
emerging markets. The current relatively low growth (driven by
consumer spending) was mainly due to weak investment and export
performance due to a number of lingering problems both at home
and overseas.

Separately, the chairman of ASEAN Business Advisory Council
Rudy Pesik said that Indonesian entrepreneurs had always been
afraid to engage in a head-on competition with businesses from
China mainly because of the latter's abundant resource of cheap
labors and superior level of technology.

"Instead of being paralyzed by the fear, we should try to find
out what does China lack of. It is simply impossible for any
nation to produce everything and anything it needs. We should
concentrate on those products that China needs but does not
produce," he said.

While lending his support to Sakakibara's statement, Frans
Seda, a senior economic adviser of President Megawati, reminded
that to be able to regain it's former economic stature, the
country's macro-economic stability should go hand in hand with
the promotion of micro-economic stability.

"This (micro-economic stability) can be achieved by making it
easier for investors to invest in this country. Increased
investment will decrease unemployment and poverty rates," he
said.

Currently, there were many dormant domestic investors, while
the foreign investors were still mostly in a wait and see
attitude.

"Actually, it is our own government that is unprepared for
this. The government should keep improving the domestic
investment stability," he said.