| COMMUNITY |
| Message Boards Chat Feedback |
| SITE SOURCES |
| Contents Help! Search CNN Networks |
| SPECIALS |
| Quick News Almanac Video Vault News Quiz |
 |
Indonesia's economic unrest grows
Jakarta residents stock up on rice and canned goods Suharto pledges reform as consumer confidence falls
January 9, 1998
Web posted at: 1:13 p.m. EST (1813 GMT)JAKARTA, Indonesia (CNN) -- President Suharto promised on Friday he would implement tough economic reforms to fix Indonesia's currency crisis which has led to panic-buying and currency fluctuation in the Asian country.
During a 25-minute telephone call with U.S. President Bill Clinton, Suharto agreed with Clinton's assessment that change was needed and pledged to implement reforms in line with a $43 billion rescue plan proposed last year by the International Monetary Fund.
The promise helped the national currency, the rupiah, rebound on Friday before weakening in European trade. On Thursday the rupiah had plunged 26 percent in value to a record low.
Its initial rise on Friday also followed news that the United States and the IMF would send top officials to Indonesia to help the world's fourth most populous country with the economic rescue plan.
Indonesia's currency has lost nearly 70 percent of its value since financial turmoil began sweeping across Southeast Asia in July.
Suharto in control but under fire
Meantime, more calls emerged for the 76-year-old Suharto to step down, something unthinkable a week ago.
Residents of Jakarta, Indonesia's capital city, flocked to supermarkets for a second day, snapping up vital food stocks to beat feared price rises amid the turmoil.
In some cases, prices of consumer products already have doubled.
Indonesian State Secretariat Minister Murdiono said Suharto had ordered the quick distribution of food supplies to avoid more panic. He also denied rumors that Suharto was gravely ill or had fled the country ahead of a planned coup.
Still, the lack of public confidence only promises to get worse.
Companies are burdened with ballooning debts, increasing the likelihood of bankruptcies, increased unemployment and the threat of social unrest, analysts say.
The public feels a growing sense that the Suharto government has failed to provide "direction and information, " says economic analyst Mari Pangestu.
Diplomats and political analysts have said a food shortage, especially during Islam's fasting month of Ramadan, could trigger the social unrest Suharto's iron rule of more than three decades has essentially contained.
The military, which plays a leading role in the multi-ethnic country, vowed to crush any disturbances, and said it would delay the purchase of 12 Russian fighter planes to help conserve funds.
It also warned journalists not to spread rumors of unrest and political instability.
Citizens protest Indonesia's economic downturn 1.9MB/22 sec./320x240
1.2MB/22 sec./160x120
QuickTime movie"We are in a crisis, but the situation is still under control," armed forces spokesman Brig. Gen. A. Wahab Mokodongan said.
About 20 students held a brief demonstration Friday, calling on Suharto to quit, but Jakarta was calm through the day.
There was no sign of an increased troop presence in the city of more than 10 million people and no reports of unrest elsewhere in the country.
Jakarta Bureau Chief Maria Ressa contributed to this report.
CNNfn special section:
Related stories:
- CNNfn: Indonesia on the brink - January 9, 1998
- CNNfn: Asia jitters, earnings woes - January 8, 1998
- Indonesia closes 16 banks, appeals for calm - November 1, 1997
- Economic woes cloud Indonesia independence day - August 17, 1997
Related sites:
Note: Pages will open in a new browser window
- Indonesia Times Online - English language daily.
- AsianNet - Indonesia Home Page
- Indonesia Internet Information Center - starting point for information about Indonesia
- DKI Jakarta - official Web site of the capital city of the Republic of Indonesia
- International Monetary Fund - promotes exchange stability and orderly exchange arrangements among 179 member countries
- The World Bank
- ASEAN - the official website of the Association of South East Asian Nations
External sites are not endorsed by CNN Interactive.
|
Sound off on our message boards & chat |
|
© 1998 Cable News Network, Inc.
A Time Warner Company
All Rights Reserved.