The Pacific Economic Co-operation Council (PECC) has called for the creation a US$3 billion pooled international fund to provide emergency loans to crisis-hit small- and medium-sized Indonesian enterprises (SMEs).
Money would come through multilateral and bilateral lending institutions, according to draft proposals presented to the Asia-Pacific Economic Co-operation (Apec) forum's finance and central bank deputies - gathered in Washington over the weekend - and released to the PECC's regional office in Singapore yesterday.
'These enterprises are the bedrock of the Indonesian economy. If they go, it goes,' the PECC's financial markets development group co-chairman Adlai Stevenson said.
The former head of Asian projects for the World Bank, Russell Cheatham - who helped the PECC draft its proposal - said: 'There simply is not time enough for high interest rates to stabilise the economy.' The PECC said the fund should be expanded to incorporate small troubled firms in other countries in the region, but thought it best to start off in Indonesia where the need was deemed to be the most urgent and greatest.
PECC representatives warned of broadening unrest in Indonesia within the next three to six months if no relief was forthcoming for small businesses.
The $3 billion pool would be referred to as the Working Capital Loan Fund for SMEs.
The PECC emphasised the group's proposal would not undermine IMF prescriptions to restore the Indonesian economy to health. Rather, it said it would complement them.