Thai Premier Urges U.S. Patience With Indonesia

If you add up the red carpet reception at the White House, President Clinton’s lavish praise and the $1.7-billion aid package, Thai Prime Minister Chuan Leekpai has ample reason to call his first official visit to the United States a rousing success.

But in an interview in Los Angeles Saturday on his last U.S. stop, the soft-spoken Thai leader expressed concern that he had not succeeded in one key area: drumming up “sympathy” for his troubled neighbors in Indonesia.

On Saturday, Indonesian President Suharto fueled fears that he was backpedaling on commitments to the International Monetary Fund when he filled key posts in his new cabinet with his eldest daughter and close friends.

However, Chuan urged Americans to judge the cabinet on what they do in the coming weeks.

“Personally, I believe the new Indonesian government will have a clearer set of policies,” said the Thai prime minister. “I do not attach that much importance to who is named in the cabinet. President Suharto might feel more confidence having people he can trust.”

Thailand, which agreed to a $17.2-billion IMF bailout after its markets crashed in July, has gotten high marks for implementing belt-tightening measures.

Chuan’s visit to Washington, where he garnered an agreement to allow Thailand to back out of a fighter-jet contract and received promises of more aid, should bolster his standing back home.

Chuan, who has begun lifting restrictions on foreign investment and pushing privatization of key sectors such as energy, also confirmed Saturday that a group of U.S. investors plan to invest $600 million in a steel mill in Thailand.

During meetings in New York and Washington, he urged U.S. bankers to follow the lead of Japanese banks, which have rolled over 80% of the short-term loans owed by Thai banks and companies. Private firms account for $70 billion of Thailand’s $90 billion in foreign loans.

The Thai leader returns to Bangkok this week to face a no-confidence motion in parliament pushed by the former government, which was ousted last November. But another pressing concern lies across the water, where Suharto has resisted measures pushed by the IMF.

Chuan, who met with Suharto in Jakarta two weeks ago, said he is confident the 76-year-old Indonesian leader recognizes there is “no alternative to the IMF that will be able to revive confidence except closing the country, which is unlikely if not impossible.”

But Chuan said the IMF should agree to modify its fiscal reform program to avoid igniting a tinderbox of social discontent.

Thai leaders are particularly worried that trouble in Indonesia might spark a repeat of the events of last summer, when the currency crisis that began in Bangkok quickly spread to neighboring countries.

“There may be a tendency for investors to look at the region as a whole rather than differentiating between countries,” Chuan said.

* INDONESIA’S CRISIS: How long can Suharto last? A12