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)

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