Article Abstract:
The Indonesian government's deregulation reforms face an acid test in the case of the petrochemical industry. While its nascent petrochemical industry, which Pres. Suharto views as a strategic sector, may need trade protection to be able to fully develop, this must be balanced against the imperative to open the domestic economy to international competition. The World Bank, a major creditor of the country, has also warned against the imposition of stiff tariffs on imported petrochemicals.
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Article Abstract:
Construction on the proposed $2.5 bil PT Trans-Pacific Petrochemical Indotama (TPPI) will cease on March 1998, save for dredging port facilities. The delayed project has joined the long roster of projects that were hurt by the Asian financial crisis. Mihir Taparia, TPPI's executive vice president and CEO, expressed faith that work, which started in 1996, can proceed within a year since he anticipates export-credit agencies to look kindly on the project.
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Article Abstract:
The Indonesian government's decision to remove the trading band that held the Rupiah within 12% of the US Dollar will weaken firms earning in local currencies and make foreign currencies flow out of the country. The decision is aimed towards liberalizing financial markets and the devaluation of various currencies in the Southeast Asian region is seen to continue as the demand for foreign currencies rise.
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