Soeharto calms fears over monetary crisis

By Kornelius Purba

JAKARTA (JP): President Soeharto has told the nation not to lose hope and to trust the government in finding the best way out of the monetary crisis.

In a media briefing on his return air journey from Medina, Saudi Arabia, Soeharto said Indonesia was not alone in experiencing the economic turmoil, which had affected other developing nations and economically strong countries such as South Korea.

He conceded the government had yet to find the right antidote to the crisis, which presented a new phenomenon to be dealt with.

But he hoped people would remain calm and patient, and believe in the government's efforts to overcome the problems.

"Do not feel desperate (because) we have not been able to resolve the crisis -- (don't feel) as if there will be no way out for us and that we will face a disaster," Soeharto said.

Soeharto was accompanied during the briefing by Minister of Foreign Affairs Ali Alatas, Minister/State Secretary Moerdiono and Minister of Religious Affairs Tarmizi Taher.

The President arrived in Jakarta yesterday afternoon from a 12-day overseas trip. He had visited Namibia and South Africa before attending the Asia Pacific Economic Cooperation (APEC) leaders meeting in Vancouver, Canada.

He also visited Saudi Arabia with his extended family for a private religious visit.

"We (the government) will find the cause and we will also find the best ways to overcome the monetary fluctuation," Soeharto promised.

In a meeting with U.S. President Clinton and other APEC leaders Monday, Soeharto pointed to the necessity of setting up an emergency fund to be used by any member country during a financial crisis.

The 18 leaders endorsed an international rescue plan for countries hit by the economic crisis, but underlined that the International Monetary Fund (IMF) would continue to play a central role in global schemes.

"That was the reason why the leaders focused their attention during the summit on a joint action plan to resolve the monetary difficulties affecting APEC members," the President said.

He added the leaders had formally asked Clinton to chair the APEC finance ministers' meeting to discuss the monetary crisis and possible solutions.

"Clinton also asked Japanese Prime Minister Ryutaro Hashimoto to handle the situation together with the IMF and World Bank," he said.

On Monday, Clinton urged Japan, itself a victim of severe financial problems, to lead the region out of its economic downturn.

Indonesia received a US$23 billion rescue package from the IMF last month after the rupiah's depreciation by at least 35 percent against the US dollar since July.

Singapore

Meanwhile, Moerdiono firmly denied that Soeharto had instructed monetary authorities here to disburse a $5 billion standby loan from Singapore.

"It is impossible that the money will be used from the agreement reached by the President and (Singapore) Prime Minister Goh Chok Tong," Moerdiono said in Medina Friday evening while accompanying Soeharto on a visit to the tomb of Prophet Muhammad.

Singapore pledged the bilateral loan last month to supplement the IMF-led aid for Indonesia's economic stabilization program.

Aburizal Bakrie, chairman of the Indonesian Chamber and Commerce and Industry (Kadin), quoted the President as saying last week that he had instructed that funds be lent to export- oriented national companies, including middle and big scale- enterprises, through state banks.

"They could borrow the money from the standby loan with a 17 percent interest rate per year," Aburizal said after accompanying Soeharto on a visit to an Indonesian trade exhibition in Cape Town, South Africa.

On Thursday, Goh termed untrue the report that Singapore's assistance would be used to bail out insolvent private companies.

Goh said he had received an assurance on the loan from Soeharto himself during a private discussion Monday in Vancouver.

"The loan...is a facility which they can draw upon if they need it for balance of payment purposes," Goh said.