Soeharto seeks debt reductions
JAKARTA (JP): President Soeharto called on urged multilateral creditors yesterday to slash the debt obligations of the world's poorest countries and to play a greater role in stabilizing financial markets.
Speaking at the World Economic Forum on East Asia in Singapore, Soeharto said bilateral and commercial creditors have assisted these countries with bilateral and commercial debt reductions.
"However, multilateral financial institutions have never been willing even to discuss the possibility of debt reduction," Soeharto said.
He added that the Non-Aligned Movement, currently chaired by Indonesia, believes that, while each debtor should "put its own house in order," the international community should create the necessary external environment through, among others things, the reduction of bilateral, commercial and multilateral debts.
The movement is trying to convince multilateral lending institutions that the obligations of the poorest countries to the institutions are just the same as their obligations to bilateral and commercial creditors, he said.
"I am happy that the World Bank is for the first time willing to discuss a facility to help the world's poorest countries with multilateral debt reduction," Soeharto said.
He called upon the World Bank and the International Monetary Fund to play a larger role in encouraging more stable exchange rates and movements of capital that will not be destructive of world financial markets.
Soeharto, who hosted last year's annual summit meeting of the 18-member Asia-Pacific Economic Cooperation (APEC) forum, gave assurances that Asia's regional groupings are not aimed at creating exclusionary trade or economic blocs.
"It is of utmost importance for this audience to realize that our goal in building regional arrangements is not to create any kind of exclusionary trade or economic bloc," Soeharto told the meeting.
Soeharto strongly endorsed the World Trade Organization (WTO), saying: "We fully support the role of the WTO and will contribute to its continuing efforts to build a global system of free trade."
He urged regional trade groupings to remain open to non- members and contribute to a global trading system. Some of Asia's most important economic partners are outside groups such as the APEC forum or the ASEAN Free Trade Area, he added.
ASEAN (the Association of Southeast Asian Nations) groups Indonesia, Singapore, Brunei, Thailand, Malaysia, the Philippines and Vietnam, while APEC groups Australia, Canada, Chile, China, Hong Kong, Japan, Mexico, New Zealand, Papua New Guinea, South Korea, Taiwan, the United States and all ASEAN members except Vietnam.
Soeharto expressed concern about trade disputes among APEC members, saying that unresolved conflicts could harm the systems that have been so carefully built to promote freer world trade and investment.
"To avoid it, APEC is trying to find approaches to resolve the disputes so as to complement official provisions of the WTO," Soeharto said.
Later yesterday, in opening of the Singapore-Indonesia joint exhibition in Singapore, Soeharto said that ASEAN's strategic position would ensure that it received the greatest benefits from the achievement of free trade and investment in the region.
Meeting
During his nine-hour stay in Singapore, Soeharto met with Singaporean Prime Minister Goh Chok Tong and Senior Minister Lee Kuan Yeuw and made an honorary visit to President Ong Cheng Teong.
During a one-hour meeting at Singapore's presidential palace, Soeharto and Goh agreed to forge closer bilateral ties through the improvement of economic activities.
"The agreements (between the two leaders) are to continue the tourism development on Bintan island in Riau and in Manado in North Sulawesi, the development of the Yogyakarta-Surakarta toll road in Central Java and other economic activities," Minister/State Secretary Moerdiono told journalists after the meeting.
Soeharto, who was accompanied by First Lady Mrs. Tien Soeharto, also witnessed the signing, by transportation and defense ministers, of a memorandum of understanding on civil and military aviation cooperation between Indonesia and Singapore.
Under the memorandum of understanding, Indonesia will allow Singaporean air force planes to fly south up to 50 kilometers into Indonesia's air space. The memorandum also assigns Singapore's Changi airport to manage air traffic around the Hang Nadim airport on Batam island, Riau.
"With the integration of the two airports, Indonesia and Singapore agreed to abide by the principal of 'first come first served'," Indonesian Minister of Transportation Haryanto Dhanutirto said. (rid)
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