Suharto calls for regional safety net
How to deal with future monetary upheavals.
PRESIDENT Suharto, concerned about the region’s recent currency crisis, yesterday called for a “common safety network | system” among South-east Asian countries to deal with future monetary upheavals.
“The monetary upheavals that hit our region has made us aware of the importance of cooperation between and among nations. Not a single country is immune to such an onslaught today,” he told Asean legislators attending the 18th Asean Inter-Parliamentary Organisation (Aipo) meeting in Bali.
He did not elaborate on the proposed system but analysts said that he could be referring to the need to harmonise trade and economic laws among member countries and the possibility of setting up a common fund.
He made a similar call to establish a safety network system during the Apec leaders’ meeting in Seattle four years ago and in Indonesia’s independence day speech earlier this month. Developed and economically-strong countries in the Asia-Pacific, he said, had a role to play in setting it up.
Indonesia, along with Thailand, the Philippines and Malaysia, have in the last few weeks reeled under the assault of speculators who have forced central banks to abandon efforts to prop up their currencies.
In the last two months, Bangkok, Manila and Jakarta have allowed their currencies to float. The baht, peso and rupiah fell promptly to record lows with repercussions for the Singapore dollar and Malaysian ringgit, as well as stock markets region-wide.
In the next week, Asean parliamentarians are expected to brainstorm ways to fight currency speculators.
Mr Suharto stressed in his speech that the currency woes to hit the region was a valuable lesson about the importance of strengthening ties.
He warned that this was necessary to confront other problems which could arise in the region from domestic instabilities and “less than harmonious international relations”.
“In facing the era of an open economy and free trade, we must continue to try to develop a healthy competition without necessarily abandoning the established co-operative spirit,” he said. Aipo’s opening session yesterday saw the admittance of Laos as a member in a special ceremony. With its inclusion, Aipo now has seven members which include Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Singapore’s Speaker of Parliament Tan Soo Khoon, who is leading a delegation of 14 Singapore MPs to the meeting, said in his speech that the admission of Laos into Aipo represented another step in Laos’ integration into Asean.
He noted that there had been speculation that the admission of new members into Asean would put a considerable strain on Asean cohesion.
“This is understandable. We represent a rich diversity of cultures, with different religious, historical and political backgrounds,” he said.
He said that Aipo had “a critical role in nurturing and deepening our understanding of each other”, a view echoed by other Aipo delegation leaders.