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G-15 summit ends under shadow of India, Indonesia crises

Emerging countries push for control of currency speculation

May 13, 1998
Web posted at: 6:09 p.m. EDT (2209 GMT)

CAIRO, Egypt (CNN) -- Combating the Asian financial crisis and curbing currency speculation were supposed to be at the top of the agenda for the G-15 summit of emerging nations in Cairo.

But with both India and Indonesia as members, the final day of the summit Wednesday was overshadowed by news of India's nuclear tests and civil unrest in Indonesia.

In their final communique, the G-15 members, whose mission in Cairo was primarily economic, did not directly address those two political flashpoints. However, given the unrest back home, Indonesian President Suharto is planning to leave Cairo earlier than planned on Thursday morning, an Egyptian official said.

And India's vice president, Krishna Kant, was forced to defend his country's decision to proceed with the nuclear tests, a development that stunned many fellow G-15 members.

"India has not violated any international treaty or agreement signed by us up until now," he said.

Asian financial crisis dominates talks

In a joint news conference, representatives of the G-15 -- a group of emerging countries from Africa, Asia and Latin America -- stressed the disruptive impact of currency speculation and the social costs it could inflict on fragile economies.

Summit members

"It is possible to impoverish a country merely by reducing the value of their currency," Malaysian Prime Minister Mahathir Mohamad said. "What we have grown is still there, but the value of our wealth has diminished 50 percent."

The plight of Asian countries suffering from an ongoing economic crisis, including Indonesia, dominated talks among the G-15 leaders, who are anxious to prevent similar crises from erupting elsewhere.

The summit communique expressed confidence that Asian countries would eventually overcome their financial problems.

"We believe ... the prolonged and repeated pressures against their currencies and the social costs, including massive unemployment, necessitate immediate action to be taken to curb the destabilizing effects of currency speculation," the communique read.

While Mahathir said an actual mechanism for controlling currency speculation had not been established, he said there was "a great deal of interest" in regulating short-term currency flows.

Also, in advance of next week's World Trade Organization talks, the G-15 leaders sent a united message, calling for "liberal and open world markets" and resistance to protectionism by developing countries. However, they also called for more say by those emerging countries when world trade decisions are made.

"We are concerned the global economy has to be steered in our own interests," said Jamaican Prime Minister P.J. Patterson. "We do not allow others to maintain sole control of the steering wheel."

Reporter James Martone and Reuters contributed to this report.


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