Soeharto warns of plot to ruin economy

Soeharto warns of plot to ruin economy

SUBANG, West Java (JP): President Soeharto warned the nation
yesterday against groups plotting to destroy the country's
economy by engineering a dramatic fall in the rupiah against the
US dollar.

Without identifying the groups, the President said there were
strong indications that the rupiah might be forced down to 20,000
against the greenback by the plotters. He did not elaborate.

"It means there is an intentional plot to destroy our economic
foundations. We must find a way to face the challenge," Soeharto
said in an off-the cuff-speech when inaugurating the Texmaco
Group's Perkasa Heavy Engineering Estate.

The President said the government and people should be united
in their fight against the campaign to ruin the hard-earned
national unity.

"This is an ordeal for all of us, (a challenge) not to be
careless, as many people have said that we will not be able to
ride out this storm," he noted.

Despite the economy's strong fundamentals, the President
acknowledged, the country's financial resilience was not yet
strong enough to overcome the turmoil.

Indonesia is facing its worst economic crisis in the last 30
years. Inflation in January hit a 25-year monthly high of 6.88
percent.

The President warned that many companies would collapse in the
current economic conditions and that this would be followed by
massive lay-offs.

"We are facing a test from God. From our 30 years of
development, our economic fundamentals are strong enough,"
Soeharto remarked.

Skyrocketing prices and severe shortages of basic needs like
cooking oil and noodles can easily remind people of the similar
situation 30 years ago, observers said.

"We must find a way to confront the challenges to return the
rupiah to its natural exchange rate," Soeharto said.

The President disclosed Monday that he would soon announce
strong measures to ease the rupiah's volatility.

The statement sparked speculation that the government might
peg the rupiah at a fixed level against the greenback.

"I believe that we will find the best way to overcome all
these problems," the President said. (prb)