-Economy faces blow-out, warn experts -Cambodian officials delay final polls tally -EAST ASIA FILE -ASEAN energy ministers eye future despite turmoil -Indonesia Predicts 3-Year Recovery ---------------------------------------- AUG 2 1998 Economy faces blow-out, warn experts SYDNEY -- Indonesia faces severely worsening economic problems in the next six months that could include more than 100-per-cent annual inflation, 25-per-cent unemployment and as much as a 30-per-cent contraction in economic output, according to new United States and Asian assessments. The US government assessment predicts serious problems such as starvation and severe malnutrition could appear within the next two months. An Asian expert said the new estimates represented an economic "blow-out". Said a senior US official: "The Indonesians are in a world of hurt." The figures are significant and dangerous increases over recent estimates by international financial institutions which had forecast 10-per-cent and 15-per-cent contractions in economic output. Despite recent improvement in the value of the rupiah, the potential start of meaningful recovery is at least a year to 18 months away because it awaits political reform, a senior Asian envoy said. "Until you get a political dispensation that is broadly acceptable, including elections and a new constitution, you can't restore the kind of international investor confidence that is pivotal to economic recovery," he explained. Full recovery may be five years or more away, Asian economists now predict. "No nation has been hit harder by the financial crisis than Indonesia, traditionally a source of stability and growth within the region," US Secretary of State Madeleine Albright said in a speech here on Thursday. Indonesia's decline already contrasts starkly with its recent history of fairly constant economic growth, which ran at an average of 7 per cent annually for 25 years before last year, according to Australian figures. Per-capita income rose from US$75 (S$126) in 1966 to almost US$1,200 in 1996. In contrast, per-capita income this year is expected to drop to US$610, Asian economists predict. Last year, the number of people living in poverty declined from 60 per cent in 1967 to 11 per cent. At least 100 million people -- about half of the population -- already live below the poverty line, Mrs Albright said on Thursday in an interview with the Australian Broadcasting Corporation. Said the Asian envoy: "The real story is that at the same time the Indonesians have these awful economic problems and no real way of addressing them quickly, they also are in the process of trying to engineer political reform. "To do those at the same time is bloody difficult any place in the world," he said. Los Angeles Times ----------------------- AUG 2 1998 Cambodian officials delay final polls tally PHNOM PENH -- Cambodian election officials yesterday delayed announcing the provisional results of last weekend's polls, saying the final tally may take up to three more days. A spokesman for the National Election Commission said the final count for the 23 provinces had been done but that hitches in transporting the ballots to the capital for checks had caused delays. Cambodian leader Hun Sen yesterday expressed confidence that a coalition government could be forged with his opposition rivals. AFP, Reuters ------------------------------ AUG 2 1998 EAST ASIA FILE S.KOREA CAN RECOVER 'IN 2 YEARS' SOUTH Korea's Minister of Finance and Economy said yesterdaythat the country's economic crisis could be overcome within two years. "I am convinced we can overcome the current crisis within two years and jump into a more mature economy if the government and others which are leading reforms share the pain," Mr Lee Kyu Sung told a group of top business leaders. Reuters HK ALERTS CHARITIES TO NIGERIAN FRAUD A NIGERIAN money-laundering syndicate is targeting Hongkong charities in a scam which has so far led to 23 arrests and at least HK$18 million (S$3.7 million) in fraud. The Hongkong Council of Social Services has alerted its 200 members about letters they may receive from the "Nigerian National Petroleum Corporation" inviting them to help it send money overseas and mentioning a very large cash incentive for their help. AFP RUSSIA RELEASES JAPAN FISHING BOATS RUSSIA yesterday released three Japanese fishing boats it had seized near the disputed Kurile Islands but has continued to keep in detention their captains for further questioning, Japan's Maritime Safety Agency said. The three boats, escorted by two Maritime Safety Agency patrol boats, returned to Nemuro port in Hokkaido, Japan's northern main island, with a total of 15 crew members on board. AFP CYANIDE CURRY VICTIMS STILL SICK MOST of the 67 people who were taken ill after eating cyanide-laced curry in Wakayama, western Japan, a week ago, are still undergoing treatment. The authorities are still investigating the case in which four people died. AFP THREE CLONED CALVES DIE THREE of the world's first five cloned calves have died at a Japanese research centre and scientists have yet to determine the causes. A calf born last Wednesday died yesterday at the Ishikawa Prefectural Livestock Research Centre. Two other cloned calves also died soon after birth on Friday. AFP HK LEGISLATOR GUILTY OF FORGERY A HONGKONG legislator was remanded in custody yesterday after he was found guilty of conspiring to forge share-transfer documents. The jury found Chim Pui Chung, 50, guilty after two days of deliberations at the end of a marathon case. An application for bail was rejected. Sentencing is to take place tomorrow. AFP ------------------- ASEAN energy ministers eye future despite turmoil 06:47 a.m. Aug 01, 1998 Eastern SINGAPORE, Aug 1 (Reuters) - Energy ministers of the Association of Southeast Asian Nations (ASEAN), planning a regionwide gas and electricity grid, will work to keep strategic long-term energy projects moving despite a year of economic turmoil, the group said in a statement on Saturday. ``ASEAN should not lose sight of long term strategic goals and while tackling immediate problems, must continue to pursue economic cooperation at the working level and keep strategic projects moving,'' the statement said. It was issued following a brief annual meeting of ASEAN energy ministers in Singapore on Saturday. ASEAN groups Brunei, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. The statement said the group would resolve to increase cooperation in energy and said there were growing opportunities to cooperate on gas and electricity projects. ASEAN's most often mooted plan is a regionwide gas grid and electricity grid, first proposed in 1988. A study by the ASEAN-European Commission Energy Management Training and Research Centre last year showed the gas grid would cost $150 billion to develop over a 20-year period. The study did not include the cost of linking the grid to Vietnam, Myanmar and Laos. A fully integrated gas and electricity grid is probably still many years away, analysts say, but projects are emerging that will start to link the region together. The latest project was signed last month, when Singapore and Indonesia agreed a $4.0 billion gas sales deal. Under the 22-year deal, Singapore's Sembawang Gas plans to import 325 million standard cubic feet per day (scfd) of natural gas from Indonesia's West Natuna gas field from 2001. Singapore already receives gas from Malaysia, but the Natuna deal is Singapore's first import agreement for piped natural gas from Indonesia. In April, Malaysia and Thailand state oil firms agreed to buy 390 million scfd from Block A-18 of the Thai-Malaysia joint development area. Malaysia and Thailand plan a 190-kilometre pipeline across their shared peninsula to carry two million barrels per day (bpd) of crude oil. The pipeline will offer an alternative land route for oil and is aimed at easing tanker traffic in the busy Straits of Malacca. Analysts say that the projects are emerging more from commercial pressures than as a result of a blueprint laid down by ASEAN. But the ASEAN energy statement said that the energy ministers agreed on the need for closer policy coordination in energy because of the growing number of cross border supply projects in gas and electricity that were emerging. They said 10 projects had been identified. -- Singapore newsroom (+65-870-3836) fax (776-8112) -------------------- Indonesia Predicts 3-Year Recovery JAKARTA, Indonesia (AP) -- New President B.J. Habibie said he needs three years to restore the economic growth levels Indonesia had achieved before being hit by the worst economic crisis in three decades. Habibie likened Indonesia's economy to an airplane that has been flying at a low altitude. He said the plane will begin to climb by September next year toward the height it had reached before the currency crisis that began in July. ``In order to reach that position, I need three years until September 2002,'' Habibie was quoted as saying Sunday by the daily Kompas. Habibie took power after his predecessor Suharto quit May 21 amid widespread student-led protests against his 32-year authoritarian rule. Habibie denied allegations that he was still controlled by Suharto, citing new policies to increase transparency and help small scale industries. ``I'm not a puppet,'' he said, adding that Suharto's regime had made security its first priority. Critics have accused Habibie of just continuing policies set in place by Suharto who had picked Habibie to lead the country's technology industries in 1970.
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