Stay calm, Suharto tells nation

‘Don’t lose hope in resolving crisis’

PRESIDENT Suharto has called on Indonesians to remain calm and not lose hope in overcoming the country’s recent economic downturn.

He stressed that Indonesia was not alone in this crisis and that other developing countries with stronger economies, such as South Korea, were also experiencing economic turbulence.

“Do not feel desperate because we have not been able to resolve the crisis,” news reports yesterday quoted him as saying.

Speaking to reporters on Saturday on board a presidential flight taking him home from Saudi Arabia, he stressed that Indonesians should not “panic as if there will be no way out for us and that a catastrophe is looming over us”.

He said: “The government will find the cause and we will also find the best ways to overcome the monetary fluctuation.”

Mr Suharto was in Saudi Arabia to perform a haj pilgrimage on his way back from last week’s summit of the Asia-Pacific Economic Cooperation (Apec) forum in Vancouver.

His comments came amid a slowdown across the Indonesian economy, which has been hit by a currency crisis that has seen the rupiah slide by more than 30 per cent against the US dollar over the past few months.

The government has attempted to prop up the rupiah and restore confidence with tight liquidity and high interest rates.

It has also received a pledge of US$23 billion (S$35.88 billion) from the International Monetary Fund (IMF).

Jakarta also received a US$5-billion stand-by loan offer from Singapore under a separate bailout package sanctioned by the IMF to tide over Indonesia’s financial difficulties.

Singapore’s contribution is part of a second line of defence stitched together with other countries sharing regional interests, including Japan, the United States, Malaysia, Australia and Brunei.

One of the key conditions for the loans is that the funds from the IMF and supplementary financing from the contributing countries cannot be used to bail out insolvent companies.

Instead, Indonesia has to implement a series of structural economic adjustments to qualify for the IMF-backed facility.

Mr Suharto had assured Prime Minister Goh Chok Tong during their meeting at the Apec summit that Indonesia would not use the stand-by loan from Singapore to help cash-strapped Indonesian firms.

The assurance followed news reports here quoting Indonesia’s Chamber of Commerce and Industry chairman Aburizal Bakrie as saying that the Singapore contribution would be channelled to state banks to be lent to companies.

State Secretary Moerdiono reiterated on Saturday that Jakarta would not help big businesses in the crisis.

“The loan from Singapore will not be used by the Indonesian government beyond that agreed upon by President Suharto and Singapore Prime Minister Goh Chok Tong,” he said.

“The government will not give financial assistance to the business community.”

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