Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (7058)	2/1/1998 2:11:00 PM
From: lorne	Respond to of 116762

ASIAN WOES Monday, February 2, 1998 Fear of further upheaval dominates forum By GEOFF KITNEY, Herald Correspondent in Davos, Switzerland The threat of mounting political and social unrest in South-East Asian countries which may block vital economic reforms is alarming international political and business leaders. A six-day meeting here of the World Economic Forum which was to have focused on worldwide economic challenges has instead been dominated by the situation in Asia and concern that the worst, including violent upheaval, may be yet to come as governments try to implement draconian reforms. The strongest fears voiced are over Indonesia because of doubts that its government is politically capable of achieving the tough economic reforms being demanded of it by the International Monetary Fund. Australian Government ministers at the meeting have tried to reassure key international investors here that they are confident Indonesia, Thailand and South Korea can implement the reform packages and maintain political and social cohesion. However, the Foreign Minister, Mr Downer, has conceded that violent confrontation is likely in Indonesia and possible in Thailand and South Korea. "There will be protests," Mr Downer said. "There will be conflict. There is the potential for age-old tensions to resurface. "There is a particular risk that ethnic Chinese, especially in Indonesia, will be targeted." He said the Indonesian Government had to do everything it could to stop attacks on Chinese, who own 70 per cent of businesses and are being blamed for bad investment decisions, and to ensure community backing for the necessary reforms. those at the forum is an expected surge in unemployment in Indonesia, Thailand and South Korea. Predictions given here are that several million Indonesians will be put out of work soon - 800,000 have lost their jobs in the past several weeks - that Thai unemployment will rise by about 1.5 million and that unemployment in South Korea will rise by at least a million. This would coincide with big price increases for many goods, including basic food items. With no social safety net in these countries, many will be plunged into poverty and tensions are likely to be exacerbated by the presence of foreign workers and illegal immigrants. Senior Thai and South Korean officials have been here reassuring international investors of their governments' commitment to reform packages and to seek backing. However, Indonesia has had no representatives at the meeting here. The forum has heard that the consensus of investors in South-East Asia is that the crisis has had a limited impact on other economies and that if the IMF reform packages were implemented, the slowdown in the region would be relatively short. However, investors are worried that political failure in the key countries may mean the collapse of the reform process. "News of riots and violent protests in Indonesia worry us deeply," a senior business leader said. "We seriously doubt that the Indonesian political leadership is capable of handling this situation." There is concern that hostility to the reform processes will grow and that the anger will be directed at the countries seen as being responsible for them being so tough, particularly the United States. Mr Downer has met US political leaders here, including the Speaker of the US House of Representatives, Mr Newt Gingrich, urging them to back President Bill Clinton over the IMF packages and give him fast-track authority to speed up trade liberalisation. It is argued that this is crucial to ensuring that Asian countries do not resort to protectionist and nationalist policies. It would also help intensify pressure on Japan to open up its markets.