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November 23, 2008

Indonesia: Oil-rich states should help ease global crisis
Oil-rich states and companies that reaped unprecedented gains when prices skyrocketed have a moral duty to ease the world's economic crisis, Reuters quoted Indonesian President Susilo Bambang Yudhoyono as saying.

Speaking ahead of an Asia-Pacific summit in Lima, the leader of the world's fourth most populous nation warned on Friday that the crisis stemming from financial turmoil would send more people into poverty as nations plunged into recession.

"At the height of the recent oil crisis, we witnessed what was said to be the greatest transfer of wealth from one set of nations to another in history, involving some 2.3 trillion dollars annually, enjoyed by petro-states and oil companies," Yudhoyono said.

"With this great wealth should also come a moral duty," he said.

Yudhoyono said while he did not agree with nationalisation, he believed that "the strong have to help the weak, and that great fortunes should also be utilized for the greater good in the spirit of compassion and human solidarity."

Oil this week tumbled under 50 dollars for the first time since early 2005 as plunging equities and weak US economic data sparked fresh concern that a global recession would slash demand.

Oil prices have plunged two-thirds since striking record highs above 147 dollars in July when fears of supply disruptions had helped to send them rocketing.

Yudhoyono noted that while oil prices declined, stock values plunged, impacting investments that had driven economic growth.

He said the worsening poverty levels could snowball into a security crisis.

"A poor community is an angry community. Three billion people worldwide, living on two dollars a day or less, are three billion resentful people.

"Seven hundred million people suffering from chronic malnutrition are seven hundred million disenchanted citizens," he said. "To tackle poverty is to prevent political instability and safeguard our collective future."

Yudhoyono cited World Bank estimates that a one percent decline in developing country growth rates would trap an additional 20 million people in poverty.

This is on top of the increase in 100 million of poor people as a result of increased food and fuel prices in the first half of this year.

More than 15 percent of Indonesia's population of 243 million are mired in poverty although the level has been brought to the lowest in 10 years.

Yudhoyono said that people needed to see real benefits from free markets.

"It is hard for the ordinary hard-working families to see running texts flashing on their TV screens reporting companies making 70 percent profits whilst, from their home, their incomes fall, their mortgage suffers, their children's education and health are at risk and their hope begins to fade."

Yudhoyono's remarks come despite the staunch support for free trade at the summit by leaders of many of the 21 economies in the Asia-Pacific Economic Cooperation forum.

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