March 28, 2009 / 10:53 AM / in 10 years

Indonesia urges developed nations to fix crisis

MEDAN, Indonesia (Reuters) - Indonesian President Susilo Bambang Yudhoyono urged on Saturday developed nations to clean up their banks and to make “full-blown efforts” to stabilize the financial markets.

“Indonesia hopes developed countries will clean up their banking system,” Yudhoyono, who is due to attend next week’s G20 meeting in Britain, told a news conference in the North Sumatran city of Medan.

Indonesia’s central bank warned on Friday that Southeast Asia’s biggest economy could see growth slow to 3-4 percent this year, from 6 percent in 2008 as exports slide.

Reflecting weak global demand for key commodities such as palm oil and rubber, and for goods such as cars, auto parts and electronics, Indonesia’s exports plunged in January at their fastest pace in more than two decades.

Other emerging economies such as Brazil have also pressed the urgent need for developed economies to take the lead in helping fix the global crisis.

Since the G20 accounted for about 80 percent of the global economy, Yudhoyono said it was “extremely crucial that the next summit yields concrete results that could help end the global recession.”

The president said Indonesia had set up a 73.3 trillion rupiah ($6.39 billion) stimulus package to help support its economy, but that would only go so far.

“Unfortunately, it won’t help overcome the global economic downturn,” said Yudhoyono, who is seeking a second term in office this year and held the news conference after attending a campaign rally for his Democrat Party.

“I would like to see developed countries make full-blown efforts to stabilize the financial market and make sure the real sector is up and running again.”

The president said he had held talks on Saturday with Thai Prime Minister Abhisit Vejjajiva, who will also attend the G20, to “synchronize the position of developing countries at the summit.”

Thailand is attending the G20 because it currently chairs the 10-member Association of Southeast Asian Nations.

“We are preparing our recommendations and proposals,” Yudhoyono said, adding he hoped the global economy would see a recovery next year.

Additional reporting by Karima Anjani in Jakarta; editing by Sue Thomas

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