Soeharto hits at speculators

Soeharto hits at speculators

JAKARTA (JP): President Soeharto yesterday blamed currency
speculators and El Nio weather phenomenon for the recent
economic losses suffered by the country and the region.

Speaking at the 103rd conference of the Organization of
Petroleum Exporting Countries (OPEC), Soeharto said that currency
traders could easily wipe out developing countries' wealth
nurtured over decades.

"Currency trading, which brings huge profits to the traders,
can apparently cause tremendous losses to nations," Soeharto
said.

"The hard work and sacrifices over several decades that have
been exerted for social and economic development are being wiped
out overnight," he added.

And most countries would be susceptible from such currency
attacks as most currencies had been transformed into a commodity,
not a mere medium of exchange.

"This is one of the indicators that the world has just entered
the globalization era. A turmoil experienced by one country will
unavoidably affect other countries as well," Soeharto said.

Soeharto's words apparently echoed the sentiments of Malaysian
Prime Minister Mahathir Mohammad, who earlier cursed currency
speculators for the suffering they allegedly brought on the
region's economies.

"Together with other friendly countries and international
financial institutions, we are taking the appropriate measures to
weather the storm," Soeharto said.

Indonesia has had to come to grips with a major crisis since
the quick devaluation of the rupiah against the U.S. dollar since
July. The rupiah has lost some 40 percent of its value since
then.

The International Monetary Fund has put together a US$23
billion assistance package for Indonesia to complement bilateral
commitments from several other countries.

Another major factor contributing to Indonesia's economic woes
was the worst drought to hit the country in 50 years caused by El
Nio weather phenomenon.

"This has been the main cause of the brush and forest fires in
several regions that resulted in social and economic damage, not
just in Indonesia, but in our neighboring countries as well,"
Soeharto said.

Smoke and haze from the Indonesian fires -- blamed on slash
and burn land clearing by locals and agro-business companies --
blanketed much of Southeast Asia earlier this year.

Speaking about oil, Soeharto said two-thirds of the world's
oil reserves were found in OPEC countries but the organization
controls only 40 percent of the world's demand for oil.

"The existence of OPEC is still vital to keeping oil prices
stable in the world market," Soeharto said at the conference.

The conference, which ended yesterday, agreed to set the new
OPEC ceiling for the first half of 1998 at 27.5 million barrels
per day, a 10 percent increase from the current ceiling of 25.03
million barrels.

Soeharto said the oil market had become increasingly
competitive and therefore oil-producing countries -- including
OPEC members -- could no longer expect a huge profit from a rise
in oil prices.

Soeharto also warned OPEC of other challenges, including
energy tax policies adopted by developed countries, the
development of non-oil energies and environmental issues.

"Even though OPEC is an organization of oil-producing
countries, it is unavoidable that due attention should be paid to
issues related to the environment," Soeharto told the meeting.

Before addressing the meeting, the President yesterday
inaugurated Hotel Dharmawangsa, where the one-week conference was
held.

Soeharto also officiated the establishment of the Bimasena
Club, a forum for the local and international mining and energy
community. (rid)

Editorial -- Page 4

Output -- Page 10