Lee warns of 'political problems'
in Indonesia
Straits Times. Jan 27, 1998
SENIOR Minister Lee Kuan Yew has warned that there could be considerable
political problems in Indonesia if the right steps are not taken and the
economy deteriorates, but he does not expect a dramatic political revolution
because of the country's financial crisis.
In a live telephone interview last night with the British Broadcasting Corporation's news programme East Asia Today, about the impact of the region's financial crisis, he said: "I don't think you're going to get a significant or dramatic political change in Indonesia.
"But unless Indonesia changes the way in which it does banking and finance and business generally and satisfies the IMF as to the way in which it is going to put it right, then it cannot get out of its present difficulties, which have sprung from a loss of confidence.
"That does not mean there is going to be a political revolution. It could mean, however, that if the right steps are not taken and the economy continues to deteriorate, then there could be political problems of a very considerable nature," he said.
Asked if there was a possibility of an ethnic backlash against the Chinese in Indonesia if the economic problems were not dealt with quickly, he said: "Only in Indonesia. There's no such problem in Thailand, Malaysia, Singapore or the Philippines."
But he said any potential problem in Indonesia would not involve the overseas Chinese but rather the Indonesians of Chinese descent.
"They are not Muslims and therefore they are a minority. They run the shops and business in Indonesia and they will get the blame for the price increases as a result of the fall in the value of the rupiah.
"Uncomprehending and mystified Indonesians believe that they are profiteering and have attacked the shops -- not a very good sign."
Asked if the concept of Asian values and a general lack of transparency were responsible partly for the region's financial problems, Mr Lee explained that having Asian values did not necessarily translate into having a general lack of transparency.
"In Singapore we've got Asian values and we are completely transparent and our markets have not been affected as much. But it's still been affected because it's been pulled down by the region.
"They are two different things -- one is the way you structure your social assets or values; the other is running an open, transparent and predictable financial system."