[Congressional Record Volume 144, Number 62 (Friday, May 15, 1998)]
[Senate]
[Pages S4942-S4943]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE INDONESIAN CRISIS

  Mr. FAIRCLOTH. Mr. President, I take the floor today to discuss the 
sorry state of affairs that we find in Indonesia. The latest reports 
are that nearly 400 people have died in the past week of rioting and 
looting.
  Despite the crumbling of this nation, there is a stony silence from 
the Clinton administration. We have heard nothing. The administration 
apparently has no policy in place to deal with the instability in 
Indonesia. Yet, in my opinion, administrative policies were largely 
responsible for many of today's problems in Indonesia. We created the 
problem, and we are not doing anything about it.

  First, during this administration, investments in Indonesia have 
soared. Lending to Indonesia during the last 4 years by U.S. banks was 
larger than to other major nations in Europe. It was too much money 
chasing too few worthwhile investments. So the money began to chase 
investments that were not worthwhile. The administration encouraged it 
and promoted it and had close ties to Indonesian conglomerates, the 
Lippo Group being a leading candidate.
  Of course, this gold rush could not sustain itself. Vast amounts of 
money and weak investments always come home to you. And the bottom 
dropped out in Indonesia.
  Rather than take responsibility for these problems and take a 
leadership role in handling the financial crisis in Asia, the answer of 
this administration has been to delegate the problems to the 
International Monetary Fund.
  The IMF has bungled, from day one, the handling of the Indonesian 
crisis. From the closing of the banks on, from the day it went in, it 
has created a greater crisis.
  We never should have turned over international economic and foreign 
policy to a group of 2,000 silk-suited bureaucrats that have little if 
any success to show for the billions and billions of American 
taxpayers' dollars that they have wasted throughout the world.
  The panic began when IMF imposed their austerity measures. They have 
driven the Indonesian currency down to record low levels. Is it any 
wonder that riots have begun to break out in the streets and that 400 
people have been killed when the currency is worth 300 percent less 
than it was a year ago?
  In fact, the riots began to take hold when the government raised the 
cost of fuel and electricity, as mandated by the IMF.
  Now, I repeat, the riots began to take hold when the government 
raised the cost of fuel and electricity as mandated by the IMF, the 
people we sent to bring calm and common sense to Indonesia. Another 
brilliant recommendation from the IMF, for a country finding itself 
plunged into poverty, was to raise the price of fuel and electricity.
  This is, again, another reason why the IMF is the last institution we 
need to provide funding to in order to solve the world's economic 
problems. Their record of solving world economic problems could not be 
worse. In fact, I would like for someone to point out a world economic 
problem that they solved. The numbers they have made worse are far 
greater than those they have helped.
  The only upturn in the Indonesian currency came when a currency board 
was suggested to stabilize monetary policy and there was a slight 
uptick in the value of the currency. But this idea was immediately 
smothered with pressure from the United States, this administration, 
and the IMF, that they could not have a currency board. Now we have a 
full-blown crisis in Indonesia. And the President is in Europe this 
week, and his aides are saying very little to nothing.
  I think it is incumbent on this country to take a leadership role and 
solve

[[Page S4943]]

this problem that we had a large hand in creating. It can only get 
worse. There can only be more bloodshed, and we have no idea what kind 
of leadership will arise from the streets of Jakarta. We have no idea. 
It is time for the administration to stop sitting on the sidelines and 
get engaged in either easing the economic problem or making plans for a 
transition from the Soeharto regime. The IMF has done enough damage. 
Now the United States has to take a leadership role in the financial 
and political affairs of this country.
  It cannot--and I repeat, it cannot--be left up to the IMF anymore. It 
has proven its inability to function.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. FAIRCLOTH. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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