Beware complacency: Clinton

By Vernon Small

"I've just spent six months in a leaky boat," played over the public address system as more than 200 of the region's business leaders assembled to hear US President Bill Clinton address the breakfast summit yesterday.

The Split Enz song hit the right note - local flavour and a nautical theme to match the America's Cup yachting venue - and as an anthem for the 1997-98 Asian economic crisis it was not too wide of the mark.

The panic that threatened to swamp Asia-Pacific's economic tigers may be rapidly fading.

Mr Clinton had come to the waterfront to hammer home the dangers of complacency at a time when free trade sceptics within Apec are muted, but not silent.

On Saturday China's President Jiang Zemin told business leaders of the "double-edged sword" of globalisation, particularly in its impact on developing countries' economic security.

Malaysia continues to be concerned about the timing of the next round of free trade talks likely to start at the WTO meeting in Seattle in November. Apec is pressing for a conclusion in three years.

Mr Clinton said his main message was the need for more hard work, despite signs of improvement in the region. He said there was a sense people were saying: "'Well, things are fine now; we don't need to continue to do anything about the economic or the financial architecture.' I think that's a mistake."

The flow of cash into and out of countries at the time had left a legacy of debt, devaluation and severe dislocation, and had underscored the importance of Asian stability and success to the US. Emerging economies needed to restructure banking systems, make corporates more accountable, reduce reliance on short-term loans and encourage more direct investment.

He said Apec should put its weight behind free trade and reform of rules governing the world's financial markets while putting "a human face" on the global economy.

Mr Clinton also stressed the need for peace and stability, including strongly worded criticism of Indonesia's military for its role in East Timor.

Concerns are mounting at the economic fallout if pressure on Indonesia fails to see a UN force invited to protect what Mr Clinton called "those poor, innocent, suffering people."

After reiterating that the US was reviewing all its economic and commercial programmes, Mr Clinton said the present course of action was imperilling Indonesia's future as well as that of the East Timorese.