S'pore says RI recovery long way off

S'pore says RI recovery long way off

SINGAPORE (AP): Singapore's deputy prime minister expects neighboring Indonesia to face a long, hard recovery from its worst economic crisis in decades, according to a magazine interview published in The Sunday Times newspaper.

Lee Hsien Loong said that "perhaps Indonesia will pick up in four or five years" depending on domestic and regional circumstances, such as whether governments will be able to make difficult reforms and how people react to these changes.

"But if the governments cannot do what is necessary, then we are in for some period of uncertainty" in Indonesia and throughout the region, said Lee, who also heads Singapore's de facto central bank.

The newspaper quoted from his interview with World Link magazine, the official publication of the World Economic Forum, in the upcoming July/August edition.

Indonesia has been hardest hit by Asia's financial and economic crisis.

Its currency has fallen 70 percent in value over the past year, while financial institutions and many businesses have become insolvent.

Aid workers have warned recently that tens of millions of people are becoming impoverished in the world's fourth most populous country.

In May, widespread social unrest sparked by price increases for basic commodities led to the resignation of Asia's longest ruling leader -- former President Soeharto -- and his replacement by B.J. Habibie.

Earlier this month, Habibie called on Indonesia's 200 million people to fast twice a week as rice supplies -- damaged by droughts over the past year -- continue to dwindle.

The International Monetary Fund is organizing a US$43 billion bailout package for the country, but has tied the aid to economic and financial reforms.