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To: Sonny McWilliams who wrote (44689)	1/9/1998 6:34:00 PM
From: Tunica Albuginea	Read Replies (2) \| Respond to of 186894

Sonny,latest news from Indonesis.Note section were it is noted that Suharto's family hodings in Indonesia are the major stumbling block.If this bozo keeps putting his family ahead of the country I bet you they will take him out in a coup just like they did his predecessor Sukarto 20 years ago. ( More to follow ) TA 1/9/98 Clinton Envoy To Pressure Indonesia On Reforms Linked To Bailout WASHINGTON -(Dow Jones)- Indonesia's beleaguered currency rebounded Friday following reports that President Clinton is joining the International Monetary Fund's senior management in a stepped-up effort to encourage Indonesia to deepen and accelerate its economic reforms. Clinton, after a series of consultations with aides and top economic advisers, contacted Indonesian President Suharto to directly elaborate on U.S. concerns regarding the longtime leader's commitment to the economic reforms called for under the IMF's $43 billion rescue package. In addition, Clinton is dispatching Deputy Treasury Secretary Lawrence Summers to Jakarta as part of an effort by a high-level contingent of IMF officials to accelerate the reforms that many analysts say appear to be in danger of collapse and to underscore Washington's willingness to take an active role in helping Indonesia as long as the nation meets its IMF commitments. The IMF has warned that Jakarta is in danger of losing further IMF loans if desired austerity measures aren't imposed. The worries over Indonesia's willingness to undertake reforms accelerated this week when Suharto unveiled a fiscal 1999 budget that called for a 32% increase in spending. Critics also said the blueprint is based on wildly optimistic economic assumptions. News of Clinton's renewed focus on Indonesia sent the rupiah soaring 30% Friday following its 26% plunge Thursday. The currency closed at 7,900 against the dollar, up sharply from Thursday's close of 10,225. Shares on the Jakarta Stock Exchange index, meanwhile, closed down four points. Despite the currency's rebound, Standard & Poor's lowered its long-term foreign-currency rating for Indonesia to double-B from double-B-plus and its local currency rating to triple-B from triple-B-plus. S&P placed it on CreditWatch with negative implications. The rating agency said that despite Friday's recovery, "the substantial depreciation of the rupiah in recent weeks has intensified already severe pressures on the private sector to a degree that threatens widespread bankruptcies and a surge in unemployment." Meanwhile, Moody's downgraded several Indonesian debt ratings, cutting the foreign-currency country ceiling for bonds and notes to B2 from Ba1 and the foreign-currency bank deposit ceiling below investment grade to Caa1 from Ba3. The rating agency said that the downgrades resulted from rising concerns over the economic and financial consequences of continued turmoil and volatility in Indonesian financial markets. Because of the lowering of the debt and deposit ceilngs, Moody's also downgraded the ratings of all 12 rated Indonesia banks. Senior administration officials said Clinton, in a 20-minute telephone call to Suharto, "underscored the importance of Indonesia to the region and to the United States, and the president made it quite clear that the IMF program needs to be followed." Though Summers' mission to Jakarta technically will be separate from that of the IMF, the presence of the Treasury's top international official at the same time that ranking IMF officials are present is aimed at driving home the message to Indonesian leaders that rapid and forceful action on economic reforms is needed. The U.S. has pledged $3 billion in credit to Indonesia as part of a $43 billion financial-bailout package led by a three-year, $10.1 billion IMF standby credit that was approved in early November. Disbursement of the U.S. credit, along with pledges from other nations, still appears to be in question. But there are rumblings in Washington that Clinton would be willing to accelerate the outlays if the Indonesian leadership showed a stronger commitment to dismantling barriers to a more open and vibrant economy. Relations and friends of Suharto, who has controlled the world's fourth-most populous nation for 32 years, control many of Indonesia's most lucrative businesses. In one sign of possible encouragemnt to IMF officals, Suharto's son Bambang Trihatmodjo said Friday that he would delay the construction of the nation's first privately owned oil refinery until the nation's economic situation improves. Based on Friday's rupiah close, the project is valued at about $1.4 billion. Bambang called on other businesses to follow suit and delay giant projects. The senior U.S. administration official indicated that accelarted aid would be among the decisions that will follow Summers mission to Jakarta. As it stands now, the U.S. credit remains as a second line of defense. The U.S. is keenly interested in seeing Indonesia come to grips with its current problems, and any potential social unrest that might stem from the faltering economy. U.S. officials are worried about regional political instability and the potential for social unrest in Indonesia - a nation seen as a valued Asian ally to the U.S. - ahead of presidential elections in the spring. In addition, the declines in Indonesian markets are also serving to further unsettle other Asian financial markets and raise the specter that the contagion effect will cause the turmoil to spread through global financial markets. Clinton's contact with Suharto is particularly important given that the Indonesian president's family banking, industrial and import interests are said by the IMF and private analysts to be among the major stumbling blocks to effective economic reform. Details of the Clinton's conversation with Suharto weren't divulged, but its is expected that Summers will depart for the Indonesian capital by Saturday at the latest. IMF Deputy Managing Director Stanley Fischer is due in Jakarta Sunday, while IMF Managing Director Michel Camdessus will arrive around midweek. S&P, meanwhile, also cut the debt ratings of 18 Indonesian companies and lowered the long-term foreign currency ratings for two banks. S&P also lowered its claims-paying ability rating and issuer credit rating on government-owned general insurer P.T. Asuransi Jasa Indonesia (Jasindo). London's credit rating agency Fitch IBCA cut its long-term rating for Bank Dagang Nasional of Indonesia - a financial leader in Indonesia - to double-B-minus from double-B-plus.meanwhile, follows the agency's lowering of its long-term foreign currency rating for the Republic of Indonesia to double-B-minus from double-B-plus. .

To: Sonny McWilliams who wrote (44689)	1/9/1998 6:40:00 PM
From: Tunica Albuginea	Respond to of 186894

Sonny,NEWS ITEM :Indonesia's Suharto AND PM Mahathir seem to be stumbling blocks to reform.It appers mahathir's son tried to commit suicide because of mounting debt: TA ******************* BUSINESS 1/9/98 In Malaysia, A Reticent Mahathir Steers Away From Controversy By James Hookway Staff Reporter KUALA LUMPUR -(Dow Jones)- Malaysian Prime Minister Mahathir Mohamad has made an uncharacteristically reticent start to 1998, noticeably toning down his rhetoric as his country's currency continues to crumble. Analysts say the change could reflect a growing realization by Mahathir and his government that their current problems haven't just blown in from across the water like the smoke from Indonesian bush fires which shrouded Kuala Lumpur in thick haze last year. In a live interview on daytime television Friday, Mahathir conceded that Malaysia's current economic malaise will be a lot more difficult to reverse than the recession which hit the country in the mid-1980s. Although he still points the finger at "foreign parties" and continues to warn of "economic colonialization" if Malaysia is forced to seek International Monetary Fund aid, he steered clear of the colorful accusations which livened up the World Bank conference in Hong Kong last year. Back then, he referred to hedge fund manager George Soros as a "moron" for allegedly selling the ringgit down. His nemesis quickly responded, labeling Mahathir as a "menace to his country." But on Friday, Mahathir was content to advise housewives to make their own barbecue sauce instead of buying expensive imported brands. "He's moved down a few notches on the emotive scale," said Desmond Supple, head of Asian currencies at BZW Asia. "I just hope the mistakes of last year have set in and he realizes that a head of state can't say these things about the currency markets." Also on Friday, Mahathir dismissed market rumors that one of his sons had attempted suicide because of mounting debt problems. Speaking after leaving a meeting of the ruling political party, the United Malays National Organization, Mahathir scoffed at the rumors as groundless. "It's not true," he said. "Why do people believe such things?" Unsubstantiated rumors had been circulating in the stock market the past few days that one of the premier's two sons had attempted to end his life. It was the first time Mahathir had spoken about the market talk. He also dismissed concerns about the health of the banking sector. He said he had spoken with central bank governor Ahmad Mohd Don and had been told there weren't any problems with the sector. The Malaysian ringgit was relatively stable Friday after a week in which it lost 17% of its value. It stood at 4.4360 to the dollar late Friday, up from 4.6800 late Thursday. Since the Asian currency crisis erupted in Thailand six months ago, the ringgit has lost 45% of its value. Signs of a change in attitude have been visible for some time. In December, Mahathir's deputy, Finance Minister Anwar Ibrahim, unveiled a program to prepare Malaysia for a hard landing. Cutting 1998 growth forecasts to 4%-5% instead of the customary 8%, Anwar also announced a sweeping 18% cut in government spending and curbed bank lending to unproductive projects. SocGen-Crosby Securities Ltd. welcomed the new package as a virtual IMF program. "The early December statement by Anwar that growth forecasts for 1998 have been slashed from a robust 7% to between 4% and 5% is of seminal importance as it represents a fundamental policy shift," the securities house said in its latest quarterly report. "Official thinking is now to accept the reality of a slowdown and to try and minimize the problems rather than the previous policy of artificially promoting growth at the expense of economic stability," it said. Mahathir bolstered the austerity drive at a meeting of Asian leaders in Kuala Lumpur in December. Warning that it could take Southeast Asian countries up to 30 years to recover from the economic quake, he expounded on the need to "amputate the gangrenous legs of the economy." Diplomatic sources have suggested Mahathir was being pressured to moderate his attacks by his partners in the Association of Southeast Asian Nations - many of which have seen their own currencies hit in the market reaction to some of Mahathir's statements. A carefully woven fabric of political and commercial influences, Malaysia's highly-leveraged economy is facing severe strains in the fallout of the regional currency crisis. With inefficient but well-connected businesses in danger of going to the wall, the country's economic planners face a credibility test - bail them out and leave the current political system intact, or let them go under and redefine the complex alliances which shape Malaysian politics. In downgrading Malaysia's long-term foreign currency debt in December, Standard & Poor's left little doubt about the importance of the issue. "Inadequate disclosure standards and linkages between the political and business elites impedes timely recognition of problems in the financial and corporate sectors, and the implementation of market-based solutions to resolve them," S&P said.