It would be impossible for East Asia to completely insulate itself from the global financial crisis.
Jakarta has approached Australia, Japan, the World Bank and other official creditors to shore up credit to help Indonesia tide over a projected US$4.4 billion budget deficit in 2009.
The rupiah has fallen almost 25% in 2008 and its problem raising funds has Indonesian policymakers worried that Indonesia could be the next victim of the global financial crisis. There has also been a movement of investments from Indonesia to safer and less risky financial instruments such as the US Treasury bonds.
The Asian Development Bank had indicated that it could make US$1 billion available but the exact terms of the package is still being worked out. Indonesia wants more from Japan and World Bank sovereign loans and government to government loan arrangement from Canberra. Canberra had previously loaned Indonesia US$1 billion in the 1997 Asian Financial Crisis.
Meanwhile in China, hundreds of retrenched workers in Zhongtang town, Dongguan, Guangdong province of south China destroyed the offices of a toy factory and clashed with the police on 25 November 2008 Tues after laying off 380 workers were laid off by the Kaida Toy Factory owned by a Hong Kong firm.
The riots arose when 2000 workers gathered to protest the severance pay given to laid-off workers and, amongst them, 500 got heated up and rioted while 1500 others looked on. They were strong enough to overcome 1000 police, overturned their vehicles and smashed the windows and computer monitors in the factory.
All these indicate that East Asian countries cannot be complacent as the global financial crisis hits the real economies.
Soeriaatmadja, Wahyudi, “Jakarta seeks loans for 2008 budget deficit” dated 27 November 2008 in the Straits Times (Singapore: Singapore Press Holdings), 2008, p. A24.
Agence France Press, Associated Press, “Layoffs park riots in Guangdong” dated 27 November 2008 in the Straits Times (Singapore: Singapore Press Holdings), 2008, p. A2