UN should manage globalization: Soeharto

UN should manage globalization: Soeharto

KUALA LUMPUR (AFP): Indonesian President Soeharto called
yesterday for an urgent effort by developing countries to
stabilize financial markets and suggested that economic
globalization should be "managed" by the United Nations.

"The sharp fluctuations of international financial flows and
currency trading have crushed the economic and social
achievements of developing countries," Soeharto told a summit of
the Group of 15 (G-15) developing countries in the Malaysian
capital.

In his first major appearance since a massive bailout for
Indonesia was launched by the International Monetary Fund (IMF),
Soeharto said "the hard work, diligence and sacrifices over
several decades were wiped out overnight."

"Many of us in this hall have their own bitter experience with
the harsh impact of currency turmoil," the elder statesman said
in his strongest remarks so far on the financial turmoil which
has forced Indonesia to take bitter medicine to nurse its ailing
economy.

"This meeting has provided us with the opportunity to exchange
views on these issues. We should cooperate effectively in
stabilizing our money market. We must immediately find the most
efficient means to dampen the adverse impact of sharp currency
fluctuations on our development," he said.

Economic globalization "should therefore be managed so as to
soften its impact on vulnerable economies," Soeharto added.

"We firmly believe that the United Nations is the only
international organization that has the universal mandate and
democratic orientation to assume with credibility the task of
ensuring justice and equity in the economic relations between and
among nations."

"Hence, current endeavors to reform the United Nations should
be pursued without sacrificing or undermining the economic and
political rights and interests of the developing countries," he
added.

Malaysian Prime Minister Mahathir Mohamad opened a Group of 15
(G-15) summit yesterday with a sharp attack on currency and stock
speculators who he said had impoverished Southeast Asia in the
space of a few months.

Mahathir said in a speech prepared for delivery to the opening
ceremony of the three-day G-15 summit that new global rules were
needed to protect against "unethical and unfair" currency
trading.

The Malaysian leader said foreign investors had pushed up
regional share prices, only to pocket high profits, and urged
developing countries to invest in their own productive capacities
and not depend on "hot money inflows".

Mahathir's swipe at speculators followed a severe decline in
currency and stock prices through much of Southeast Asia, and was
expected to set the stage for a G-15 statement later this week
underlining concern over foreign exchange volatility.

As Soeharto attended the G1-5 summit, monetary authorities in
Japan and Singapore announced that they, along with Indonesia,
had intervened in the currency market to bolster the rupiah.

The IMF-led bailout plan for Indonesia announced over the
weekend involves US$23 billion in a "first line" of support for
Jakarta and another 14 billion dollars from donors including
Japan and Singapore as well as the United States.

Dealers in Singapore said the Bank of Japan and the Monetary
Authority of Singapore had collectively poured in $100 million to
support the rupiah.

Singapore Finance Minister Richard Hu and his Japanese
counterpart Hiroshi Mitsuzuka said in separate statements that
the joint intervention was aimed at correcting excessive
depreciation of the Indonesian currency.

"Singapore's participation in this joint intervention reflects
our confidence in the macroeconomic policies of the Indonesian
government," Hu said.

"Today's joint intervention is aimed at promoting a
strengthening of the rupiah to levels more consistent with the
fundamentals of the Indonesian economy," he added.

The currency, which has fallen some 50 percent against the US
dollar since the start of the year and 35 percent since July,
traded in late afternoon at 3,292.50 against the greenback,
slightly falling after strengthening midday to 3,280. Its Friday
close stood at 3,580.